Bangalore District Court
Issued Legal Notice On 23.01.2020. It ... vs Appeared Through His Learned Counsel ... on 15 March, 2023
1 CC.3810/2020( J)
KABC030145892020
Presented on : 26-02-2020
Registered on : 26-02-2020
Decided on : 15-03-2023
Duration : 3 years, 0 months, 18 days
IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY.
Dated this the 15th Day of March-2023
Present: Lokesh Dhanapal Havale. B.A.L.L.B.,
XV Addl.C.M.M., Bengaluru.
Judgment U/s.355 of the Cr.P.C. 1973.
1.Sl.No.of the case CC.No.3810/2020
2.Name of the Complainant: Sri. B.S Ravishankar
S/o late B.M Shankaraiah,
Aged about 61 years,
R/at No.399, 57th Cross,
3rd Block, Rajajinagar,
Bengaluru- 560 010.
3.Name of the accused: Sri. Prasad. M.B
No.16/73, 59th Cross,
Opposite to MEI Polytechnic,
Vatal Nagaraj Road,
4th block, Rajajinagar,
Bengaluru- 560 010.
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4.The offence complained of : U/s.138 of Negotiable Instruments
Act.
5.Plea of the accused: Pleaded not guilty.
6.Final Order: Acting U/s.255(2) Cr.P.C., accused
is Convicted.
7.Date of final Order 06.03.2023.
* * *
This complaint is filed U/Sec.200 of Cr.P.C. against the
accused for the offence punishable U/Sec.138 of the Negotiable
Instruments Act, 1881.
2. The facts of the complaint in brief are as under:
The accused is one of the director of M/s Saventure Company
Pvt Limited involved in the business activities of Interior
Decoration. The complainant was appointed as a Supervisor and he
has been working for past 2 years involving supervision of interior
works at various locations. He has salary of Rs.20,000/- per
month. The salary was paid through the company account by
cheque. The salary for the period of 5 months was not paid in
spite of repeated requests and reminders. The complainant
approached the High Grounds Police Station and he filed a
complaint against the accused on 05.09.2019 for non payment of
the salary. The SHO acting on the said complaint registered the
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said case as NCR 205/2019 and summoned the accused. On
enquiry by the SHO and after recording of statement of the
accused, he agreed that the amount payable towards the salary as
Rs.80,000/- to the complainant. He had issued two cheques from
his individual account i.e., one for Rs.15,000/- and another cheque
bearing No.296704 dated 28.12.2019 for Rs.65,000/- drawn on
State Bank of India, Rajajinagar branch, Bengaluru. On
presentation of the said cheque for encashment, it was
dishonoured for the reasons 'Funds Insufficient' on 30.12.2019. The
complainant issued legal notice on 23.01.2020. It was served on
the accused on 24.01.2020. The accused did not pay the amount
even after the expiry of 15 days. The accused thereby committed
an offence punishable U/s.138 of the N.I.Act.
3. After the institution of the complaint, the cognizance
was taken and it has been registered as PCR No.2566/2020. The
sworn statement of the complainant has been recorded and on the
basis of sworn statement and other materials on hand, the criminal
case has been registered against the accused and summons was
issued to accused. In response to the service of summons, the
accused appeared through his learned counsel and got enlarged
on bail. The prosecution papers were supplied to the accused and
the substance of the accusation was read over and explained to
the accused in the language known to him. He pleaded not guilty
and claimed to be tried.
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4. During trial the complainant examined himself as PW-1
and got marked Ex.P1 to P15. The statement of the accused U/s.
313 of Cr.P.C. was recorded. The accused examined himself as
DW.1 and no documents have been marked on his behalf.
5. Heard the arguments. On perusal of the entire
materials on record, the points that arise for my consideration are
as under;
1. Whether the complainant proves that the
accused issued cheque bearing No.296704
dated 28.12.2019 for Rs.65,000/- drawn on
State Bank of India, Rajajinagar branch,
Bengaluru towards the discharge of legally
enforceable debt/liability and on its
presentation for encashment, it was
dishonored with an endorsement "Funds
Insufficient" and even after the service of
legal notice, the accused has not paid the
amount within 15 days and thereby accused
committed an offence punishable U/Sec.138 of
N.I. Act, 1881?
2. Whether the accused rebuts the
presumption U/s.139 of the N.I.Act?
3. What order?
6. My answers on the above points for consideration are
as under:
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Point No.1 : Affirmative
Point No.2 : Negative
Point No.3 : As per final order for the following;
REASONS
7. Point No.1 and 2 :- The points are taken together for
the common discussion to avoid repetition of facts and evidence. It
is necessary to discus the provisions U/s. 118(a) and 139 of the
Act., 1881 at this stage.
"118. Presumptions as to negotiable
instruments. - Until the contrary is
proved, the following presumptions shall
be made:-
(a) of consideration - that every
negotiable instrument was made or drawn
for consideration, and that every such
instrument, when it has been accepted,
indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or
transferred for consideration;"
"139. Presumption in favour of
holder.- It shall be presumed, unless the
contrary is proved, that the holder of a
cheque received the cheque of the nature
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referred to in section 138 for the
discharge, in whole or in part, of any
debt or other liability."
8. On plain perusal of the provision U/s. 118(a) and 139
of the N.I.Act., it can be seen that initially the presumptions
constituted under these two provisions are in favour of the
complainant. However the presumptions are rebuttable and it is
open to an accused to raise a defence to rebut the statutory
presumptions. An accused can raise a defence, wherein the
existence of legally enforceable debt or liability can be contested.
9. It is also well established that an accused need not
examine himself for discharging the burden of proof placed upon
him under a statute. He may discharge his burden on the basis of
the materials already brought on record. An accused has
constitutional rights to remain silent. The standard of proof on
part of the accused and that of the prosecution in a Criminal Case
is different. The prosecution must prove the guilt of an accused
beyond all reasonable doubts, the standard of proof so as to prove
a defence on the part of an accused is preponderance of
probabilities.
10. Under the light of position of the law, I have perused
the complaint and the evidence placed on record. The complainant
in support of his claim made in the complaint has adduced
evidence by examining himself as PW-1 and he got marked Ex.P1
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to 12. PW-1 filed his evidence affidavit on oath and reiterated
the complaint averments. Ex.P1 is the cheque bearing No.296704
dated 28.12.2019 for Rs.65,000/- drawn on State Bank of India,
Rajajinagar branch, Bengaluru in favour of the complainant.
Ex.P1(a) is the signature of the accused. Ex.P2 is the NCR
acknowledgment bearing reference No.205/2019 dated 05.09.2019.
It discloses that the complainant has filed the complaint against
the accused in High Grounds police station stating that he was
working as supervisor in M/s Saventure Company Private Limited
from past two years. The accused has not paid salary for five
months. Ex.P3 is the endorsement issued by the High Grounds
Police Station on 25.09.2019 to the complainant stating that the
accused gave the statement before the police stating that he has
not threatened the complainant and he has given cheques for
Rs.80,000/- to be paid to the complainant and received Honda
Activa two wheeler bearing No.KA.05.K.E.3904 from the
complainant and therefore the complaint was closed. Ex.P4 is the
cheque deposit slip dated 30.12.2019. He has also produced
another cheque deposit slip dated 13.01.2020 but it was not
marked in the evidence by the complainant due to oversight.
Ex.P5 is the bank return memo dated 13.01.2020 with shara
"Funds Insufficient". Ex.P6 is the office copy of Legal Notice dated
23.01.2020 issued by the complainant to the accused demanding
repayment of the cheque amount. Ex.P7 is the postal receipt for
having sent the legal notice to the accused. Ex.P8 is the postal
acknowledgment for having served the notice to the accused on
24.01.2020.
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11. Ex.P9 and 10 are the visiting cards of the accused
which are marked during his cross examination by way of
confrontation and on his admission. On perusal of Ex.P9 and 10, it
is found that the name of the company run by the accused was
Savandhi Infra Trading Pvt Ltd. Ex.P11 to 15 are the photocopies
of the transactions of the phone-pay between the complainant and
the accused. They are marked during the cross examination of
PW.1 by way confrontation and on his admission. Ex.P11 shows
that the accused transferred Rs.20,000/- on 26.04.2019 as salary
for March and it is specifically stated in the transaction. Ex.P11 to
15 are of the period from February, 2019 to June, 2019. Ex.P11 to
15 also disclose that the accused used to transfer the amounts to
the accused for purchase of materials in respect of the projects of
the company and the purpose for which the amount was
transferred is clearly mentioned in the said documents.
12. On perusal of the documents, it is clear that the
cheque at Ex.P1 bearing No.296704 dated 28.12.2019 for
Rs.65,000/- drawn on State Bank of India, Rajajinagar branch,
Bengaluru issued in favour of the complainant was presented
within its validity. Ex.P5 is the bank endorsement with shara
"Funds Insufficient" dated:30.12.2019. Ex.P6 is the office copy of
Legal Notice dated 23.01.2020, which was served on the accused
on 24.01.2020 as per Ex.P.7. The accused has not disputed the
service of notice in the cross examination of PW.1 and defence
evidence. The complaint was filed on 25.02.2020, which is within
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limitation. The cheque and the signature in the cheque are not
disputed. Therefore, the documents on record clearly show that the
complainant has complied the ingredients of Section 138(a) to (c)
of the N.I.Act. Therefore the presumptions U/s.118 and 139 of the
N.I.Act arise in favour of the complainant. The presumptions are
rebuttable and the burden is on the accused to rebut the
presumptions. The accused can rebut the presumption by raising
probable defence and proving it relying on the evidence of the
complainant or by leading his direct evidence.
13. In the following judgments of the Hon'ble Supreme
Court the aspect of presumptions and burden of proof have been
settled.
(a) The Hon'ble Supreme Court in the case of M.S.
Narayana Menon Vs. State of Kerala - (2006) 6 Supreme
Court Cases 39, held as under:-
"30. Applying the said definitions of 'proved' or 'disproved'
to principle behind Section 118(a) of the Act, the Court shall
presume a negotiable instrument to be for consideration
unless and until after considering the matter before it, it
either believes that the consideration does not exist or
considers the non-existence of the consideration so probable
that a prudent man ought, under the circumstances of the
particular case, to act upon the supposition that the
consideration does not exist. For rebutting such presumption,
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what is needed is to raise a probable defence. Even for the
said purpose, the evidence adduced on behalf of the
complainant could be relied upon.
31. A Division Bench of this Court in Bharat Barrel &
Drum Manufacturing Company v. Amin Chand Payrelal
reported in (1999) 3 SCC 35 albeit in a civil case laid
down the law in the following terms:
"12. Upon consideration of various judgments as noted
hereinabove, the position of law which emerges is that
once execution of the promissory note is admitted, the
presumption under Section 118(a) would arise that it is
supported by a consideration. Such a presumption is
rebuttable. The defendant can prove the non-existence
of a consideration by raising a probable defence. If the
defendant is proved to have discharged the initial onus
of proof showing that the existence of consideration
was improbable or doubtful or the same was illegal,
the onus would shift to the plaintiff who will be
obliged to prove it as a matter of fact and upon its
failure to prove would disentitle him to the grant of
relief on the basis of the negotiable instrument. The
burden upon the defendant of proving the non-
existence of the consideration can be either direct or
by bringing on record the preponderance of
probabilities by reference to the circumstances upon
which he relies. In such an event, the plaintiff is
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entitled under law to rely upon all the evidence led in
the case including that of the plaintiff as well. In case,
where the defendant fails to discharge the initial onus
of proof by showing the non- existence of the
consideration, the plaintiff would invariably be held
entitled to the benefit of presumption arising under
Section 118(a) in his favour. The court may not insist
upon the defendant to disprove the existence of
consideration by leading direct evidence as the
existence of negative evidence is neither possible nor
contemplated and even if led, is to be seen with a
doubt."
This Court, therefore, clearly opined that it is not
necessary for the defendant to disprove the existence of
consideration by way of direct evidence.
32. The standard of proof evidently is preponderance of
probabilities. Inference of preponderance of probabilities can
be drawn not only from the materials on records but also by
reference to the circumstances upon which he relies.
33. Presumption drawn under a statute has only an
evidentiary value. Presumptions are raised in terms of the
Evidence Act. Presumption drawn in respect of one fact may
be an evidence even for the purpose of drawing presumption
under another."
12 CC.3810/2020( J)
(b) The Hon'ble Supreme Court in Kumar Exports Vs.
Sharma carpets reported in (2009) 2 SCC 513, held as
under;
"20. The accused in a trial under Section 138 of the Act has
two options. He can either show that consideration and debt
did not exist or that under the particular circumstances of
the case the non-existence of consideration and debt is so
probable that a prudent man ought to suppose that no
consideration and debt existed. To rebut the statutory
presumptions an accused is not expected to prove his
defence beyond reasonable doubt as is expected of the
complainant in a criminal trial. The accused may adduce
direct evidence to prove that the note in question was not
supported by consideration and that there was no debt or
liability to be discharged by him. However, the court need
not insist in every case that the accused should disprove the
non- existence of consideration and debt by leading direct
evidence because the existence of negative evidence is
neither possible nor contemplated. At the same time, it is
clear that bare denial of the passing of the consideration and
existence of debt, apparently would not serve the purpose of
the accused. Something which is probable has to be brought
on record for getting the burden of proof shifted to the
complainant. To disprove the presumptions, the accused
should bring on record such facts and circumstances, upon
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consideration of which, the court may either believe that the
consideration and debt did not exist or their non-existence
was so probable that a prudent man would under the
circumstances of the case, act upon the plea that they did
not exist. Apart from adducing direct evidence to prove that
the note in question was not supported by consideration or
that he had not incurred any debt or liability, the accused
may also rely upon circumstantial evidence and if the
circumstances so relied upon are compelling, the burden
may likewise shift again on to the complainant. The accused
may also rely upon presumptions of fact, for instance, those
mentioned in Section 114 of the Evidence Act to rebut the
presumptions arising under Sections 118 and 139 of the Act.
21. The accused has also an option to prove the non-
existence of consideration and debt or liability either by
letting in evidence or in some clear and exceptional cases,
from the case set out by the complainant, that is, the
averments in the complaint, the case set out in the statutory
notice and evidence adduced by the complainant during the
trial. Once such rebuttal evidence is adduced and accepted
by the court, having regard to all the circumstances of the
case and the preponderance of probabilities, the evidential
burden shifts back to the complainant and, thereafter, the
presumptions under Sections 118 and 139 of the Act will not
again come to the complainant's rescue.
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(c) The Hon'ble Supreme Court in Rangappa Vs. Mohan
reported in (2010)11 SCC 441 held as under:
26. In light of these extracts, we are in agreement
with the respondent-claimant that the presumption mandated
by Section 139 of the Act does indeed include the existence
of a legally enforceable debt or liability. To that extent, the
impugned observations in Krishna Janardhan Bhat (supra)
may not be correct. However, this does not in any way cast
doubt on the correctness of the decision in that case since it
was based on the specific facts and circumstances therein.
As noted in the citations, this is of course in the nature of a
rebuttable presumption and it is open to the accused to raise
a defence, wherein the existence of a legally enforceable
debt or liability can be contested. However, there can be no
doubt that there is an initial presumption, which favours the
complainant.
27. Section 139 of the Act is an example of a
reverse onus clause that has been included in furtherance of
the legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption under
Section 139 is a device to prevent undue delay in the course
of litigation. However, it must be remembered that the
offence made punishable by Section 138 can be better
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described as a regulatory offence since the bouncing of a
cheque is largely in the nature of a civil wrong whose
impact is usually confined to the private parties involved in
commercial transactions. In such a scenario, the test of
proportionality should guide the construction and
interpretation of reverse onus clauses and the
accused/defendant cannot be expected to discharge an
unduly high standard or proof.
28. In the absence of compelling justifications,
reverse onus clauses usually impose an evidentiary burden
and not a persuasive burden. Keeping this in view, it is a
settled position that when an accused has to rebut the
presumption under Section 139, the standard of proof for
doing so is that of `preponderance of probabilities'.
Therefore, if the accused is able to raise a probable defence
which creates doubts about the existence of a legally
enforceable debt or liability, the prosecution can fail. As
clarified in the citations, the accused can rely on the
materials submitted by the complainant in order to raise
such a defence and it is conceivable that in some cases the
accused may not need to adduce evidence of his/her own.
(d) The the Hon'ble Supreme Court in Basalingappa Vs.
Mudibasappa reported in (2019) 5 SCC 418 held as
under:-
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"25. We having noticed the ratio laid down by this Court in
the above cases on Sections 118 (a) and 139, we now
summarise the principles enumerated by this Court in
following manner:
25.1. Once the execution of cheque is admitted Section
139 of the Act mandates a presumption that the
cheque was for the discharge of any debt or other
liability.
25.2. The presumption under Section 139 is a
rebuttable presumption and the onus is on the accused
to raise the probable defence. The standard of proof
for rebutting the presumption is that of preponderance
of probabilities.
25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the accused
can also rely on the materials submitted by the
complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be
drawn not only from the materials brought on record
by the parties but also by reference to the
circumstances upon which they rely.
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25.4. That it is not necessary for the accused to come
in the witness box in support of his defence, Section
139 imposed an evidentiary burden and not a
persuasive burden.
25.5. It is not necessary for the accused to come in
the witness box to support his defence.
(e) The Hon'ble Supreme Court of India in the case of
A.P.S Forex Services Pvt Ltd Vs. Shakthi Internatonal
Fashion Linkers & Others reported in 2020 STPL 5773
SC, held at para No.7 as under:
7. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque and
that the cheque in question was issued for the second time,
after the earlier cheques were dishonoured and that even
according to the accused some amount was due and
payable, there is a presumption under Section 139 of the
N.I. Act that there exists a legally enforceable debt or
liability. Of course such presumption is rebuttable in nature.
However, to rebut the presumption the accused was required
to lead the evidence that full amount due and payable to
the complainant has been paid. In the present case, no such
evidence has been led by the accused. The story put forward
by the accused that the cheques were given by way of
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security is not believable in absence of further evidence to
rebut the presumption and more particularly the cheque in
question was issued for the second time, after the earlier
cheques were dishonoured. Therefore, both the courts below
have materially erred in not properly appreciating and
considering the presumption in favour of the complainant
that there exists legally enforceable debt or liability as per
Section 139 of the N.I. Act. It appears that both, the
Learned Trial Court as well as the High Court, have
committed error in shifting the burden upon the complainant
to prove the debt or liability, without appreciating the
presumption under Section 139 of N.I. Act. As observed
above, Section 139 of the Act is an example of reverse onus
clause and therefore once the issuance of the cheque has
been admitted and even the signature on the cheque has
been admitted, there is always a presumption in favour of
the complainant that there exists legally enforceable debt or
liability and thereafter it is for the accused to rebut such
presumption by leading evidence.
(f) The Hon'ble Supreme Court of India in the case of
Thriyambak S Hegade Vs. Sripad reported in 2021 STPL
10270 SC, held at para No.11 & 12 as under:
11. From the facts arising in this case and the
nature of the rival contentions, the record would disclose
that the signature on the documents at Exhibits P-6 and P-2
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is not disputed. Exhibit P-2 is the dishonoured cheque based
on which the complaint was filed. From the evidence
tendered before the JMFC, it is clear that the respondent
has not disputed the signature on the cheque. If that be the
position, as noted by the courts below a presumption would
arise under Section 139 in favour of the appellant who was
the holder of the cheque. Section 139 of the N.I. Act reads
as hereunder: "139. Presumption in favour of holder- It
shall be presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature
referred to in section 138 for the discharge, in whole or in
part, of any debt or other liability."
12. Insofar as the payment of the amount by the
appellant in the context of the cheque having been signed
by the respondent, the presumption for passing of the
consideration would arise as provided under Section 118(a)
of N.I. Act which reads as hereunder:- "118. Presumptions
as to negotiable instruments - Until the contrary is proved,
the following presumptions shall be made: -
(a) of consideration - that every negotiable instrument
was made or drawn for consideration, and that every such
instrument, when it has been accepted, indorsed, negotiated
or transferred, was accepted, indorsed, negotiated or
transferred for consideration."
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(g) The Hon'ble Supreme Court of India in the case of
M/s. Kalamani Tex v. P. Balasubramanian reported in
2021 STPL 1056 observed at para No.14 to 18 as under:-
14. Adverting to the case in hand, we find on a
plain reading of its Judgment that the trial Court completely
overlooked the provisions and failed to appreciate the
statutory presumption drawn under Section 118 and Section
139 of NIA. The Statute mandates that once the signature(s)
of an accused on the cheque/negotiable instrument are
established, then these 'reverse onus' clauses become
operative. In such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon him.
This point of law has been crystalized by this Court in
Rohitbhai Jivanlal Patel Vs. State of Gujarat, (2019) 18 SCC
106 in the following words:
"In the case at hand, even after purportedly drawing
the presumption under Section 139 of the NI Act, the trial
Court proceeded to question the want of evidence on the
part of the complainant as regards the source of funds for
advancing loan to the accused and want of examination of
relevant witnesses who allegedly extended him money for
advancing it to the accused. This approach of the Trial
Court had been at variance with the principles of
presumption in law. After such presumption, the onus
shifted to the accused and unless the accused had discharged
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the onus by bringing on record such facts and circumstances
as to show the preponderance of probabilities tilting in his
favour, any doubt on the complainant's case could not have
been raised for want of evidence regarding the source of
funds for advancing loan to the appellant-accused....."
15. Once the 2nd Appellant had admitted his
signatures on the cheque and the Deed, the trial Court
ought to have presumed that the cheque was issued as
consideration for a legally enforceable debt. The trial Court
fell in error when it called upon the Complainant-
Respondent to explain the circumstances under which the
appellants were liable to pay. Such approach of the Trial
Court was directly in the teeth of the established legal
position as discussed above, and amounts to a patent error
of law.
16. No doubt, and as correctly argued by senior
Counsel for the appellants, the presumptions raised under
Section 118 and Section 139 are rebuttable in nature. As
held in M.S.Narayana Menon Vs. State of Kerala, (2006) 6
SCC 39, which was relied upon in Basalingappa (supra), a
probable defence needs to be raised, which must meet the
standard of "preponderance of probability", and not mere
possibility. These principles were also affirmed in the case
of Kumar Exports (supra), wherein it was further held that a
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bare denial of passing of consideration would not aid the
case of accused.
17. Even if we take the arguments raised by the
appellants at face value that only a blank cheque and signed
blank stamp papers were given to the respondent, yet the
statutory presumption cannot be obliterated. It is useful to
cite Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, 36
where this court held that:
"Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards
some payment, would attract presumption under
Section 139 of the Negotiable Instruments Act, in
the absence of any cogent evidence to show that
the cheque was not issued in discharge of a
debt."
18. Considering the fact that there has been an
admitted business relationship between the parties, we are of
the opinion that the defence raised by the appellants does
not inspire confidence or meet the standard of
'preponderance of probability'. In the absence of any other
relevant material, it appears to us that the High Court did
not err in discarding the appellants' defence and upholding
the onus imposed upon them in terms of Section 118 and
Section 139 of the NIA.
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h) The Hon'ble Supreme Court of India in its latest case of
Jain P Jose v/s Santhosh reported in SLP Crl.5241/2016
dated 10.11.2022 observed by referring to its earlier
Judgments in Vasanth Kumar v/s Vijaya Kumari, Rangappa
v/s Mohan and Kalamani Tex and Another v/s P.
Balasubramanian that the complainant is entitled to the
benefit of presumption u/sec.139 of N.I Act that the cheque
was issued for discharge of legally enforceable debt or
liability.
14. Therefore on perusal of the Judgments, it is clear that
an accused need not examine himself for discharging the burden of
proof placed upon him under a statute. He may discharge his
burden on the basis of the materials already brought on record.
An accused has constitutional rights to remain silent. The standard
of proof on part of the accused and that of the prosecution in a
Criminal Case is different. The prosecution must prove the guilt of
an accused beyond all reasonable doubt and the standard of proof
so as to prove a defence on the part of an accused is
preponderance of probabilities. If the cheque and signature are
admitted, the presumption arises that the cheque was issued for
legally enforceable debt/liability. The presumption is rebuttable.
The accused has to raise a probable defence and prove it by
adducing evidence, which must meet the standard of
preponderance of probabilities. Unless the same has been done,
doubt can not be raised on the case of the complainant. The
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presumption raised in favour of the complainant u/sec.139 of N.I
Act operates until rebutted by the accused by proving probable
defence. As per the settled law that unless and until the accused
rebuts the presumption U/sec.139 of N.I Act, the onus does not
shift on the complainant to prove his case.
15. It is the defence of the accused that he knew the
complainant. The complainant used to do work in his company
around 5-6 years ago. He was working as site supervisor. He left
the job for 2-3 years. As per the policy of the company, the
company used to appoint the site supervisors on freelance basis for
the purpose of work in the projects of the company. The
employees appointed by the company are given the salary. There
was no salary for the workers appointed on contract basis or
freelance basis instead they were given money as per their work.
If the project is for a period of 5-6 months and the total amount
to be paid is Rs.10,000/- for the work done by the workers in the
project. They are given Rs.2,000/- to Rs.2,500/- per month. The
complainant approached the company for work once again and
asked him to assign the work in the project as there was no
vacancy in the company and as the complainant has already
worked in the company. He was assigned the work in 2-3 projects
of the company on freelance basis. He was given the responsibility
of supply of materials for the completion of project work. Due to
the negligence of the complainant, the company suffered loss in a
project. He used to issue bearer cheques to the complainant for
purchase of materials for the project work of the company. He
25 CC.3810/2020( J)
used to give cheques of the company or the cheques of his
personal account for the purchase of materials. The company has
given two wheeler to the complainant for the work of the
company. The complainant came to the company and the house in
respect of the money to be paid to him and gave troubles and
harassment. Thereafter the matter went to the police station and
he was called to the police station. The complainant claimed for
the complainant that the salary amount was due to him. He
explained everything to the police about the claim of the
complainant and thereafter the complaint was closed. The
complainant returned the two wheeler to him. The police have
obtained his statement in the police station at that time. The
notice was served on him and the complainant wrongly mentioned
in the notice that the salary amount was due. The complainant
misused the cheques given to him for the work of the company.
He did not bother about it as the amount was small and also for
the reason that it was mentioned in the notice that the
complainant is the employee of the company. Therefore he did not
issue the reply notice. The turn over of his company was about
One Crore before the Covid period and it was around
Rs.50,00,000/- to Rs.60,00,000/- post covid. He has no liability to
pay any amount to the complainant.
16. In view of the settled law, the burden is on the
accused to prove his defence by preponderance of probabilities and
rebut the presumption raised in favour of the complainant U/s139
of NI Act. It is admitted fact that the accused was running the
26 CC.3810/2020( J)
Private Limited Company. It is alleged in the complaint that the
accused is one of the directors of the M/s. Saventure Company
Private Limited. However it was the M/s. Savandhi Infra Trading
Private Limited as admitted by the accused and as per ExP.9 and
10. It is admitted fact that the complainant was working as
supervisor in the company of the accused. As per the defence
evidence, it is clear that the accused changed the company into
Limited Liability Partnership. Its name is M/s. Saventure Infratech
LLP. It is also the stand of the accused that though the name is
changed his brand name is Saventure. Therefore wrong mentioning
of the company/firm name of the accused is not fatal to the case
of the prosecution. It is also pertinent to note that the cheque
does not belong to the company or firm. It belongs to the personal
account of the accused and it is admitted fact that he is drawer of
the cheque and the signature belongs to him. It is also pertinent
to note that the accused admitted that he used to use his personal
cheques for the work of the company/firm.
17. It is disputed fact that the complainant is salaried
employee. The counsel for the accused argued that the
complainant is not the salaried employee of the accused
company/firm. He has not produced any documents to prove his
stand. The complainant failed to produce the bank statement and
therefore adverse inference has to be drawn. The counsel for the
complainant argued that the accused admitted everything in his
cross examination and therefore the complainant need not produce
the documents. Ex.P11 is sufficient to show that the complainant
27 CC.3810/2020( J)
is salaried employee and Ex.P11 to 15 and admissions of the
accused in defence evidence are sufficient to show that the
complainant was working in the company/firm of the accused. It is
alleged in the complaint that the salary of the complainant was
Rs.20,000/- and the accused used to pay salary through company
cheque. It is specific defence of the accused that as per the policy
of the company, the company used to appoint the site supervisors
on freelance basis for the purpose of work in the projects of the
company. The employees appointed by the company are given the
salary. There was no salary for the workers appointed on contract
basis or freelance basis instead they were given money as per their
work. If the project is for a period of 5-6 months and the total
amount to be paid is Rs.10,000/- for the work done by the
workers in the project. They are given Rs.2,000/- to Rs.2,500/- per
month. When the complainant approached him again and the
complainant was appointed on freelance/contract basis on 2-3
projects of the company. However no documents have been
produced for the same. Nothing was elicited in the cross
examination of PW.1 though he was extensively cross examined by
the counsel for the accused. It is admitted by the accused that he
used to pay salary through cheque or cash. The counsel for the
accused cross examined PW.1 in respect of his appointment, ID
card, deduction of PF, nature of work and salary. PW.1 clearly
stated that there was attendance register in the company to show
that he was working. The salary was made through cheques and
he can produce the bank statement. When it was suggested to him
that he never worked as supervisor in the company of the
28 CC.3810/2020( J)
accused, he denied it and stated that the accused has sister
concern company and he might have been given cheque from said
company. He also voluntarily stated that the accused had
transferred the amounts to his account for purchase of materials
for the work and he used the said amount for the said purpose
and he can produce those documents. No doubt that the
complainant has not produced the bank statement to prove the
same. However adverse inference can not be drawn as the
admitted facts need not be proved. The counsel for the
complainant cross examined DW.1 and it is clear from the cross
examination of DW.1 that the employees in the company were not
given either appointment letter or the ID cards and they were
appointed on the basis of attendance. The salary of the employees
varies from Rs.15,000/- to Rs.25,000/- depending on their
designation and work. It is clear from the cross examination that
no ID card or appointment letter was given to the complainant,
when he was working as employee of the company. Such being
the case, there is no question of complainant having any ID card
or appointment letter or deduction of amount of PF from salary
etc when he was appointed by the accused on contract or
freelance basis as alleged by him in his defence evidence. It is
admitted fact that the complainant was working as salaried
employee in Savandhi Infra Trading Pvt Ltd. He was working as
site supervisor in Savandhi Infra Trading Pvt Ltd. The salary was
paid by way of cheque or cash. When it was asked to DW.1 as to
the mode of salary he stated that he did not remember the mode
in which the salary was paid in the year 2018-2019. He admitted
29 CC.3810/2020( J)
that he used to transfer money to the complainant for purchase of
materials. He voluntarily stated that he also paid cash and also
gave money in other modes. He admitted that he used to mention
the purpose while transferring the amount. He admitted phone-pay
transfer documents during his cross examination. ExP.11 to 15
were marked through DW.1. He admitted that Rs.20,000/-
transferred to complainant as salary of march on 26.04.2019 as per
ExP.11. He also admitted transfer of amounts for purchase of
materials as per ExP.12 to 15. Ex.P11 to 15 are the photocopies of
the transactions of the phone-pay between the complainant and
the accused. They are marked during the cross examination of
PW.1 by way confrontation and on his admission. Ex.P11 shows
that the accused transferred Rs.20,000/- on 26.04.2019 as salary
for March and it is specifically stated in the transaction. Ex.P11 to
15 are of the period from February, 2019 to June, 2019. Ex.P11 to
15 also disclose that the accused used to transfer the amounts to
the accused for purchase of materials in respect of the projects of
the company and the purpose for which the amount was
transferred is clearly mentioned in the said documents. Therefore
the suggestion made in the cross examination of PW.1 that he
never worked as supervisor in the company of the accused is
contradictory and inconsistent with the admission of the accused in
his defence evidence that he worked as supervisor in the company
and he also worked on freelance/contract basis. The evidence on
record makes it clear that the accused failed to prove that the
complainant was appointed on contract basis. On the other hand,
the evidence makes it clear that the complainant was a salaried
30 CC.3810/2020( J)
employee during the period mentioned in the complaint. Therefore
the accused failed to prove his defence as probable one.
18. It is disputed fact that the accused has given statement
in the High Grounds PS admitting the liability to an extent of
Rs.80,000/- and issued cheques in the police station as alleged in
the complaint. The counsel for the accused argued that the
complainant has produced the NC acknowledgment as per Ex.P2
and endorsement issued by High Grounds P.S as per Ex.P3 but he
failed to produce the copy of the complaint filed by him and the
statement alleged to have been given by the accused before High
Grounds P.S. There is no mention of the details of the cheques in
the endorsements and the complainant intentionally did not
produce the statements of the accused to suppress the facts. The
cheques are issued by the accused much prior to the date of
complaint and they are issued for the purpose of purchase of
materials for the project work. The counsel for the complainant
argued that the accused admitted asking of amount by the
complainant, complaint filed by the complainant before High
Grounds P.S, his summoning before the SHO, statement given by
him before the police. The endorsements at Ex.P3 itself is
sufficient to show that the accused issued the cheques and gave
statement accordingly. It is alleged in the complaint that the salary
for the period of 5 months was not paid by the accused in spite of
repeated requests and reminders by the complainant. He
approached the High Grounds Police Station and filed a complaint
against the accused on 05.09.2019 for non payment of the salary.
31 CC.3810/2020( J)
The SHO acting on the said complaint registered the said case as
NCR 205/2019 and summoned the accused. On enquiry by the
SHO and after recording of statement of the accused, he agreed
that the amount payable towards the salary as Rs.80,000/- to the
complainant. He had issued two cheques from his individual
account i.e., one for Rs.15,000/- and another cheque bearing
No.296704 dated 28.12.2019 for Rs.65,000/- drawn on State Bank
of India, Rajajinagar branch, Bengaluru. In order to prove the
same the complainant produced the documents at ExP.2 and 3.
Ex.P2 is the NCR acknowledgment bearing reference No.205/2019
dated 05.09.2019. It discloses that the complainant has filed the
complaint against the accused in High Grounds police station
stating that he was working as supervisor in M/s Saventure
Company Private Limited from past two years. The accused has
not paid salary for five months. Ex.P3 is the endorsement issued
by the High Grounds Police Station on 25.09.2019 to the
complainant stating that the accused gave the statement before the
police stating that he has not threatened the complainant and he
has given cheques for Rs.80,000/- to be paid to the complainant
and received Honda Activa two wheeler bearing
No.KA.05.K.E.3904 from the complainant and therefore the
complaint was closed.
19. It is admitted by the accused in his defence evidence
that the company has given two wheeler to the complainant for
the work of the company. It is stated that the complainant came
to the company and the house in respect of the money to be paid
32 CC.3810/2020( J)
to him and gave troubles and harassment. Thereafter the matter
went to the police station and he was called to the police station.
The complainant claimed for the complainant that the salary
amount was due to him. He explained everything to the police
about the claim of the complainant and thereafter the complaint
was closed. It shows that the complainant went to the house of
the accused and company of the accused to ask his money. The
filing of the complaint before High Grounds P.S. is also admitted.
However the explanation given by the accused in respect of
closure of the complaint by the police is vague. During his cross
examination also the accused admitted that the vehicle bearing
No.KA 05 KE 3904 belongs to him and that he gave the said
vehicle to the complainant for the work of the company. He also
admitted that the complainant filed the complaint before High
Grounds Police Station stating that he has not given salary of 5
months. The statement of the accused given before the police is
not produced by either party. It is clear from the evidence of the
complainant and the documents filed on his behalf that the
accused gave statement admitting the liability and issued cheques
for Rs.80,000/-. DW.1 was cross examined in respect of the same
and when it was asked to DW.1 that he gave the cheques in the
police station, DW.1 stated that the matter was settled for
Rs.20,000/- to Rs.30,000/- and he paid the amount to the
complainant by way of cash. It is defence of the accused that the
complainant misused the cheques given to him for the work of the
company. He did not bother about it as the amount was small and
also for the reason that it was mentioned in the notice that the
33 CC.3810/2020( J)
complainant is the employee of the company. Therefore he did not
issue the reply notice. However during his cross examination,
DW.1 stated that he received the notice but he has not issued
reply to the legal notice of the complainant. It was elicited that
there is no document to show that the amount was given to
purchase the materials. He has not taken any action against the
complainant for misuse of cheques. He admitted the encashment of
an amount of Rs.15,000/- by the complainant. He has not taken
any action against the complainant for misappropriation of amount
given to the complainant for purchase of materials for his personal
use. DW.1 voluntarily stated that as the amount was small and
there was understanding between him and the complainant and
sometimes the complainant purchased materials with his own
amount and he used to pay the amount to the complainant later,
such being the case, he was not aware of the fact of encashment
of cheque for Rs.15,000/- and he came to know about it when the
cheque for Rs.65,000/- was dishonored but he had not taken any
action thereafter also. He did not receive the SMS of dishonour of
cheque as he changed the contact number. He denied that the
cheques given in police station for salary due amount. He
voluntarily stated that he gave the amount in cash in police
station and it is mentioned in the statement given before the
police. He tried to take it but the police did not co-operate. The
stand taken by both the parties, documents on record and the
answers elicited in the cross examinations, it is clear that the
complainant has discharged the burden by producing ExP.2. The
burden is on the accused to prove that the matter was settled for
34 CC.3810/2020( J)
Rs.20,000/- to Rs.30,000/- and amount was paid by way of cash
in the police station and there is reference of the same in the
statement given by him before the police. The accused failed to
produce the said statement to prove his stand. The explaination
given by the accused for not issuing reply notice and for not
taking any action against the complainant for misuse of cheque
and mis appropriation of money are not at all satisfactory. The
accused being the businessman has the wordly knowledge of
transactions and consequences of issuance of cheques. No prudent
man would keep quiet if the cheques are misused and amounts are
mis appropriated. The acts done by the accused are against the
rule of prudence. When the complainant alleges that he was
working on the attendance basis and it is admitted by the accused
it is incumbent on the accused to produce the attendance register
maintained by him to show that on what basis and for what
period the complainant has worked in his company/firm. When the
complainant alleged that salary of the March was paid as per
Ex.P11 and thereafter the salary was not paid for five months, it
is incumbent upon the accused to show that he has paid the salary
or whatever the amount to be paid to the complainant for having
done work on freelance/contract basis as alleged by him the
defence evidence. The accused failed to adduce evidence in that
regard in order to rebut the presumption. Therefore it can not be
believed that the complainant misused the cheques and
misappropriated the amount to make unlawful gain. On the other
hand, the documents are record shows that he was working in the
company/firm of the accused as salaried employee and his salary
35 CC.3810/2020( J)
was due. Ex.P11 to 15 are sufficient to substantiate the same.
Ex.P2 and 3 are sufficient to substantiate that salary for five
months i.e., from April to August 2019 is due and therefore
complaint was filed on 05.09.2019 before High Grounds P.S. The
documents explained the chronology of events which are quiet
natural under the facts and circumstances of the case. The accused
has not done anything which would have been done by a common
prudent man under the facts and circumstances of the case and in
the natural course of events. Hence the accused failed to prove
his defence as the probable one by preponderance of probabilities.
20. It is the defense of the accused that there is no
transaction as alleged in the complaint and the complainant
misused the cheques issued to him for the purchase of materials.
The counsel for the accused made several suggestions but the
suggestions are denied by the complainant. Mere suggestions are
not sufficient. On perusal of the entire cross examination of PW.1
nothing was elicited in support of the defence of the accused. The
issuance of cheque and signature on the cheque at ExP.1 are
admitted. The drawer's signature on the cheque attracts the ratio
laid down by the Hon'ble Supreme Court of India in its decisions
reported in 2011 (11) SCC - 441 - Rangappa V/s.Sri.Mohan and
SCC 2015 (8) Page No.378 - T.Vasanthakumar V/s.Vijayakumari
and the recent Judgment delivered in Crl. Appeal No.508/2019 -
Rohit Bhai Jeevanlal Patel V/s. State of Gujarath and another. The
ratio is that the cheque shall be presumed to be for consideration
unless and until the court forms a belief that the consideration
36 CC.3810/2020( J)
does not exist or considers the non-existence of consideration was
tenable that a prudent man would under no circumstances act
upon the plea that the consideration does not exist.
21. For the reasons mentioned herein above, it is
crystallized that the accused has utterly failed to prove that there
was no existence of legally enforceable debt/liability between him
and the complainant and he has not at all issued the instant
cheque towards the discharge of legally enforceable liability of
Rs.65,000/-. On the other hand, the complainant has proved that
the accused issued the cheque for the legally enforceable liability;
the cheque was dishonored due to the reason 'Funds Insufficient'
and the notice issued by him was served on the accused. The
complainant proved his case beyond all reasonable doubts. The
accused failed to rebut the statutory presumptions U/s.118(a) & (b)
and 139 of the N.I.Act. Accordingly the accused is found guilty for
the offence punishable U/s.138 of the N.I.Act. Hence, I proceed to
answer the Point No.1 in Affirmative and Point No.2 in the
Negative.
22. Point No.3 : In view of the reasons assigned in Point
No.1 and 2 and under the facts and circumstances of the present
case, I proceed to pass the following:-
37 CC.3810/2020( J)
ORDER
As per the provisions of Sec.255(2) Cr.P.C. the accused is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine Rs.80,000/- (Rupees Eighty Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.75,000/- (Rupees Seventy Five Thousand Only). The remaining balance amount of Rs.5,000/- is to be forfeited to the State.
In default of payment of the fine amount accused shall undergo simple imprisonment for two months.
The personal bond executed by the accused is hereby stands cancelled and cash surety of Rs.1,000/- furnished by the accused shall be refunded to him after expiry of appeal period.
The copy of the judgment shall be furnished to the accused at free of cost.
(Dictated to the Stenographer, transcript thereof is computerized and printout taken by him, is verified and then pronounced by me in Open Court on this the 15th day of March-2023.) (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.
38 CC.3810/2020( J) ANNEXURE Witnesses examined for the Complainant:-
PW.1 : Sri. B.S Ravi Shankar Documents marked for the Complainant:-
Ex.P1 : Cheque
Ex.P1(a) : Signature of the accused
Ex.P2 : Acknowledgment given by High Ground
police station
Ex.P3 : Endorsement given by Police
Ex.P4 : Pay in slip
Ex.P5 : Bank endorsement
Ex.P6 : Office copy of the legal notice
Ex.P7 : Postal receipt
Ex.P8 : Postal acknowledgement
Ex.P9 to 10 : 2 visiting cards
Ex.P11 : Money transaction done by through
Phone pay
Ex.P12 to 15 : Documents regarding money transactions
done by through phone pay.
Witnesses examined For Defence:-
DW.1 : Sri. Prasad. M.B Documents marked for Defence:-
Nil (Lokesh Dhanapal Havale), XV Addl.CMM., Bengaluru.
39 CC.3810/2020( J) 40 CC.3810/2020( J) 15.03.2023 (Judgment Pronounced in the Open Court Vide Separate Order sheet) ORDER As per the provisions of Sec.255(2) Cr.P.C. the accused is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine Rs.80,000/- (Rupees Eighty Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.75,000/- (Rupees Seventy Five Thousand Only). The remaining balance amount of Rs.5,000/- is to be forfeited to the State.
In default of payment of the fine amount accused shall undergo simple imprisonment for two months.
The personal bond executed by the accused is hereby stands cancelled and cash surety of Rs.1,000/- furnished by the accused shall be refunded to him after expiry of appeal period.
The copy of the judgment shall be furnished to the accused at free of cost.
XV Addl.CMM., Bengaluru.