Bangalore District Court
Sri. Veerappa vs Sri. M. Neelakanta on 27 August, 2021
1
C.C.No. 27371/2017 J
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 27th day of August, 2021
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.27371/2017
Complainant : Sri. Veerappa,
S/o Late Chikka Sanjeevaiah,
Aged about 64 years,
R/at No.39, Yellappa Street,
Chikkamavalli,
Bengaluru - 560 004.
Rep. by Sri. K. R. Ramesh Kumar
Adv.,)
Vs
Accused : Sri. M. Neelakanta,
S/o Mahadevappa,
Aged about 50 years,
R/at No.70, Gangadhara Nagar,
1st Cross, Bengaluru - 560 078.
(Rep. by Sri. T. V. Devaraja Adv.,)
Case instituted : 22.09.2017
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Conviction
Date of order : 27.08.2021
2
C.C.No. 27371/2017 J
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 knows the accused and the accused for the purpose of his financial commitments and family necessities had borrowed a hand loan of Rs.2 lakhs on 05.10.2016 from him in cash at Bangalore and agreed to repay the said amount alongwith interest within six months and after completion of six months the accused failed to pay principal amount and thereafter he demanded the principal amount and interest and upon his repeated demands the accused issued cheque bearing No.514191 dated 25.07.2017 for Rs.2 lakhs drawn on Synidicate Bank, Banashankari IInd stage Branch, Bangalore - 560 070 with the assurance that the said cheque will be honoured on its presentation on its due date, accordingly he presented the said cheque for encashment on 25.07.2017 through his banker i.e., Canara Bank, M.N. Krishna Rao Road Branch, Lalbagh West, Bangalore, but the said cheque came to be returned unpaid with an endorsement dated 3 C.C.No. 27371/2017 J 27.07.2017 as "Funds Insufficient" and thereafter he got issued legal notice dated 09.08.2017 by RPAD to the accused, but in the notice by inadvertently the date is mentioned as 09.07.2017 instead of 09.08.2017 and the said notice was came to be returned on 28.08.2017 with postal endorsement "Door Locked, Intimation Delivered" even inspite of it the accused failed to make payment within 15 days from service of notice. 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 affidavitinlieu of his sworn statement, in which, he has reiterated the averments of the complaint. In support of his sworn statement, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to Ex.C.10 i.e, original Cheque bearing No.514191 dated:25.07.2017 as per Ex.C.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.C.1(a), Bank challan as per Ex.C.2, Bank Memo as per Ex.C.3, the office copy of the Legal Notice dated 09.08.2017 as per Ex.C.4, the postal receipt as per 4 C.C.No. 27371/2017 J Ex.C.5, returned Legal Notice as per Ex.C.6, RPAD Cover and Postal Receipt as per Ex.C.7 and Ex.C.8. During the course of trial the complainant has produced Statement of Accounts as per Ex.C.9 and Ex.C.10 respectively. The complainant has also examined one witness by name Sri. V. Srinivas as PW2 on his behalf.
4. Primafacie case has been made out against the accused and summons was issued against the accused in turn he has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
5. In view of the principles of law laid down and as per the directions of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the accused, as he intended to set out his defence, and the case was posted for cross examination of complainant and PW2 and complainant has closed his side.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been 5 C.C.No. 27371/2017 J recorded. he has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence, subsequently the accused himself examined as DW1 and he has relied upon the documentary evidence i.e., true copies of the statement of account pertains to ICICI Bank i.e., pertains to her sister as per Ex.D.1 and Ex.D.2 and also examined his sister by name Kumari Manjula .M D/o Mahadeva as DW2 and closed his side.
7. Heard the arguments by learned counsel for the complainant and perused the written arguments submitted by the learned counsel for the accused and materials on record.
8. On the basis of complaint, evidence of complainant and documents and having heard the arguments of both learned counsels for the complainant and the accused, the following points that are arise for consideration are:
1. Whether the complainant proves that the accused has issued cheque bearing No.514191 dated 25.07.2017 for a sum of Rs.2,00,000/ drawn on Syndicate Bank, Banashankari IInd Stage Branch, Bangalore - 560 070 to discharge legally 6 C.C.No. 27371/2017 J recoverable debt to the complainant and when the complainant has presented the above said cheque for encashment through his banker but the said cheques have been dishonoured for the reasons "Funds Insufficient" on 27.07.2017 and the complainant issued legal notice to the accused on 09.08.2017 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
9. The above points are answered as under:
Point No.1: In the Affirmative Point No.2:As per final order for the following:
REASONS
10. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act 7 C.C.No. 27371/2017 J 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 presupposes three conditions for prosecution of an offence which are as under:
1. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.
2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the 8 C.C.No. 27371/2017 J date on which cause of action arise to file complaint.
11. It is also one of the essential ingredients of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 a presumption shall be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
12. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified that, he knows the accused and the accused for the purpose 9 C.C.No. 27371/2017 J of his financial commitments and family necessities had borrowed a hand loan of Rs.2 lakhs on 05.10.2016 from him in cash at Bangalore and agreed to repay the said amount alongwith interest within six months and after six months the accused failed to pay principal amount and thereafter he demanded the principal amount and interest and upon his repeated demands the accused issued cheque bearing No.514191 dated 25.07.2017 for Rs.2 lakhs drawn on Synidicate Bank, Banashankari Iind stage Branch, Bangalore - 560 070 with the assurance that the said cheque will be honoured on its presentation on its due date. The complainant / PW1 further testified that, he presented the said cheque for encashment on 25.07.2017 to his banker i.e., Canara Bank, M.N. Krishna Rao Road Branch, Lalbagh West, Bangalore, but the said cheque came to be returned unpaid with an endorsement dated 27.07.2017 as "Funds Insufficient" and thereafter he got issued legal notice dated 09.08.2017 by RPAD to the accused, but in the notice by inadvertently the date is mentioned as 09.07.2017 instead of 09.08.2017 and the said notice was came returned on 28.08.2017 with postal endorsement "Door 10 C.C.No. 27371/2017 J Locked, Intimation Delivered" even inspite of it the accused failed to make payment within 15 days from service of notice.
13. In support of oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to Ex.C.10 i.e, original Cheque bearing No.514191 dated:25.07.2017 as per Ex.C.1, the signature on the said cheque identified by P.W.1 is that of the accused as per Ex.C.1(a), Bank challan as per Ex.C.2, Bank Memo as per Ex.C.3, the office copy of the Legal Notice dated 09.08.2017 as per Ex.C.4, the postal receipt as per Ex.C.5, returned Legal Notice as per Ex.C.6, RPAD Cover and Postal Receipt as per Ex.C.7 and Ex.C.8. During the course of trial the complainant has produced Statement of Accounts as per Ex.C.9 and Ex.C.10 respectively.
14. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not disputed by the accused that, the cheque in question belongs to his account and signature found at Ex.C.1(a) is also that of his signature. The Accused has also not disputed that the cheque in dispute was presented for encashment and dishonoured for the reason of 11 C.C.No. 27371/2017 J "Funds Insufficient" vide bank endorsement dated:
27.07.2017 therefore as a matter on record and has been proved by producing bank memo i.e., Ex.C.3 issued by the concerned bank dated: 27.07.2017.
Therefore the complainant has proved that, the cheque in question i.e Ex.C.1 was presented within its validity period and dishonoured as per bank endorsement issued by the banker of the Accused and the cheque in question belonging to the Accused account and signature of the Accused is at Ex.C.1(a).
15. In relation to the service of notice, the accused in his evidence has denied the service of notice upon him. The complainant in order to prove service of notice upon the Accused, has produced the documents i.e copy of the legal notice dated 09.08.2017, postal receipt, returned legal notice dated 09.07.2017, RPAD Cover and receipt which are at Ex.C.4 to C.8 respectively. It is relevant here to mention that, the perusal of the returned legal notice it appears that, the date of notice is mentioned as 09.07.2017, but the complainant in his complaint and evidence has specifically stated that, due to inadvertently the date is mentioned as 09.07.2017 instead of 09.08.2017, this fact is also 12 C.C.No. 27371/2017 J not disputed by the accused. Apart from that, the perusal of the bank Challan i.e., Ex.C.2 it appears that the cheque in question has been presented through the complainant's bank on 25.07.2017 and the said cheque was returned with bank endorsement as "Funds Insufficient" i.e., Ex.C.3 dated 27.07.2017, hence the legal notice cannot be issued prior to the date of receipt of the bank memo and it is also appears from Ex.C.5 i.e., Postal Receipt wherein it is seen that, the legal notice i.e., Ex.C.4 was sent on 09.08.2017 and these documents are not disputed by the accused, therefore in view of nondisputing of the documents produced by the complainant it can be held that, the date mentioned in the legal notice appears to be inadvertently mentioned as 09.07.2017 instead of 09.08.2017, in such circumstance the explanation offered by the complainant with regard to wrong mentioning of month in the legal notice can be acceptable one.
16. On perusal of the Ex.C.7 i.e. the RPAD returned cover with an endorsement of "Door locked dated 11.08.2017" "2nd Intimation dated 14.08.2017", hence, it goes to show that, the legal notice caused by the complainant through RPAD to 13 C.C.No. 27371/2017 J the addresses of the Accused shown in the notice returned with postal endorsements of "Door locked dated 11.08.2017" "2nd Intimation dated 14.08.2017". The Accused during the course of crossexamination of complainant denied service of the notice, it is relevant here to mention that, the accused has not denied or disputed the address mentioned by the complainant in Ex.C.6, Ex.C.7 and Ex.P.8 and it is also not the defence of the accused that, the complainant by colluding with the postal authorities got created the endorsements on Ex.C.7 i.e., the endorsement made by the Postal Authorities as "Door locked dated 11.08.2017" "2nd Intimation dated 14.08.2017". If really the complainant got created the endorsement on Ex.C.7, definitely the accused would have proved the same by examining the concerned postal authorities, but no such efforts have been made by the accused, therefore mere denial of the endorsement issued by the postal authority it cannot be held that, the endrosement issued by the postal authority as per Ex.C.7 is got created by the complainant.
17. Hence from the above documentary evidence clearly goes to show that, the accused was 14 C.C.No. 27371/2017 J residing in the address mentioned in the legal notice and RPAD cover. The accused has not produced any documents to disprove his address as shown by the complainant, in such circumstance it can be held that, the complainant has sent legal notice to the accused to his correct address and the said notice was came to be returned with an endorsement of "Door locked dated 11.08.2017" "2nd Intimation dated 14.08.2017". Therefore in view of non disputing of the address of the Accused in the summons and endorsements issued by the postal authorities on Ex.C.7 makes it clear that, the Accused has admitted that, the legal notice caused by the complainant to his correct address and sent through registered post, in such circumstances, it can be held that, the notice sent by the complainant to the correct address of the Accused is presumed to have been served on him U/s. 27 of General Clauses Act. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2011 ACD 1572 (KAR) in the case of Jayamma Vs. Lingamma, wherein the Hon'ble High Court held that, "Notice sent at correct address returned unclaimed - is deemed to be served. In 15 C.C.No. 27371/2017 J another decision reported in 1998 KAR 1841 in the case of Shridhar M.A. Vs. Metalloy Steel Corporation and 1999 Cri.L.J. 4606 "K. Bhaskaran Vs. Vaidhanbalan wherein the Hon'ble Apex Court was concerned with the question as to when the service of notice could be inferred and it was held that if there is an endorsement like 'not available in the house' 'house locked' 'shop closed' 'unclaimed' the service should be deemed to have been effected. It is also relevant here to refer the decision reported in 2008(4) Civil code cases 027 (SC) "M/s. Indo Automobiles Vs., M/s. Jai Durga Enterprises and others." wherein the Hon'ble Apex Court held that, "notice sent by registered post with acknowledgement to a correct addressservice of notice has to be presumed". Therefore in view of the principles of law in the above decisions, it can be safely held that, the service of notice on accused in this case is presumed to have been served on him since in this case also the complainant has issued notice to the accused to his correct address through registered post and the said notice was returned 16 C.C.No. 27371/2017 J with an endorsement of "Addressee always Absent and Party Absent Returned to Sender", hence the notice issued by the complainant through registered post is held to be proper. In addition to that, it is relevant here to refer the decision reported in 2007 AIR SCW 3578 in the case of C.C.Alavi Haji Vs. Palapetty Muhammed and another., wherein the Hon'ble Apex court held that " the drawer of the cheque is permitted to deposit the cheque amount within 15 days from the date of his appearance before the court in pursuance of the service of summons on him and in such situation, his defence of non service of the legal notice cannot be available to him'. Hence, in view of the said principles of law, even for sake of discussion, though there is no cogent and reliable documentary proof to substantiate the claim of the complainant with regard to address of the Accused to show there is due service of the legal notice on the Accused, in view of settled position of law by virtue of the above said decision of Hon'ble Apex Court of India, the Accused is not entitled to the technical defence of the alleged non service of the legal notice. Therefore, the argument convassed by the learned 17 C.C.No. 27371/2017 J counsel for the accused that, the notice issued by the complainant was not served on the accused and the complainant has not complied the mandatory requirements of Sec.138(b) of N.I.Act and complaint is not maintainable cannot be acceptable and are not sustainable in law.
18. It is the specific defence of the Accused that, there was no monitory transaction between him and the complainant and has not issued the cheque in question towards the discharge of loan transaction in question and also denied the lending of loan amount of Rs.2 lakhs by the complainant. The complainant in support of his oral evidence has produced statement of account pertaining to his bank which are at Ex.C.9 and Ex.C.10. The perusal of the Ex.C.9 and C.10 it appears that, the complainant is having sufficient funds during the year 2014 to 2016 in his bank account. Apart from that, the learned counsel for the accused, has cross examined the complainant in length, but nothing has been eliciated to discard or discredit the oral and documentary evidence of the complainant. The complainant / PW1 in his evidence has stated that, the accused is known to him through his soninlaw and he knows the accused since 7 to 8 years and on 18 C.C.No. 27371/2017 J 01.10.2016 the accused approached him and requested to lend loan amount for the purpose of house transaction and on 05.10.2016 he has paid the amount to the accused in his house at about to 12.00 p.m. and at that time the accused and he are only present in his house. The complainant / PW1 has also stated that, the accused has issued cheque in question on 25.07.2017 towards repayment of the loan amount and he has written Ex.C.2 and presented the cheque to the bank. It is true that, the complainant has admitted that he has not collected any document from the accused towards lending of the loan amount in cash, but the said admission is not sufficient to hold that, complainant has not lend loan amount in question, unless the accused is rebutted the presumption available to the complainant. The complainant / PW1 has denied the suggestion that, the accused has issued Ex.C.1 cheque in question towards the security of the loan amount of Rs2. Lakhs borrowed by his sister from his soninlaw as the accused is a Government servant and his soninlaw demanded the cheque of accused as security in respect of loan amount of Rs.2 lakhs advanced to the sister of the accused. The complainant has also denied the suggestion 19 C.C.No. 27371/2017 J that, even after repayment of the Rs.2 lakhs loan amount to his soninlaw, but his soninlaw did not return the cheque in question and has filed this complaint through him. Hence, on entire perusal of the cross examination of PW1 nothing has been eliciated to believe the defence of the accused or discard the evidence of the complainant.
19. The complainant has also examined his soninlaw by name Sri. V. Srinivas as PW2. The PW2 in his evidence stated that, the complainant is his fatherinlaw and worked as Attender in Central Government and retired from the services during the year 2014 and his house and house of the accused are adjacent to each other and his house No.17 and house number of the accused is 71 and also stated that, there was no monitory transaction between him and the accused, but the elder sister of the accused namely Smt. Manjula borrowed an amount of Rs.2 lakhs from him for her medical treatment, at that time none of the family members of the said Smt. Manjula were present and more particularly the accused and the said Manjula has not given any cheque or on demand pronote towards security of the said loan and thereafter on 25.02.2017 she had 20 C.C.No. 27371/2017 J repaid the said loan amount of Rs.2 lakhs by transferring to his account and she has no due to him. The PW2 further stated that, the loan amount of Rs.2 lakhs advanced by him to the sister of the accused i.e., Smt. Manjula and the transaction in question and cheque in question are not related to each other and either the complainant or the accused or the sister of the accused informed him about the loan transaction in question and either the accused or his sister Manjula have issued any letter or notice or orally requested for return of cheque in question, hence there is no relation in respect of the cheque in question and financial transaction between him and the sister of the accused and accused has falsely deposed before the court stating that, the cheque in question was given to him in respect of the loan amount advanced by him to his sister Smt. Manjula towards security of the loan amount, but he has not received cheque in question towards security of the loan amount advanced to the sister of the accused. The learned counsel for the accused has crossexamined the PW2 in length, but nothing has been eliciated to believe that, the cheque in question was given by the accused towards the security of the loan amount of Rs.2 lakhs advanced 21 C.C.No. 27371/2017 J by the PW2 to the sister of the accused i.e., Smt. Manjula. The PW2 has denied that, he has misused the cheque in question which was given towards security of the loan advanced by him to the sister of the accused through the complainant by filing this complaint and he is aware of the entire facts of this case, since the date of filing of this complaint despite of it he is deposing falsely before the court. Hence nothing has been eliciated from the PW2 to believe the defence of the accused, that the cheque in question was given by him to the soninlaw of the complainant towards security of the loan amount of Rs.2 lakhs advanced by him to the sister of the accused by name Smt. Manjula and the said cheque was misused by the soninlaw of the complainant through the complainant by filing this complaint.
20. It is important to note here that, on careful perusal of the entire oral and documentary evidence produced by the complainant i.e Ex.C.1 to Ex.C.5 and admitted facts by the Accused, the complainant proved that the cheque in question belongs to the Accused i.e Ex.C.1 and signature found at Ex.C.1(a) is that of the signature of the Accused and also proved that, the cheque in question was presented within its validity period and it was dishonoured for 22 C.C.No. 27371/2017 J the reason of "Funds Insufficient" as per Ex.C.3 and thereafter the legal notice caused by him through RPAD as per Ex.C.4 was presumed to have been served on him as per entry made on Ex.C.7 and Accused has not given any reply to the legal notice, in such circumstances, it can be held that, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initial presumptions are available in favour of the complainant U/s.118a and 139 of the N.I.Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even a presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused unless and until the said presumptions are rebutted by the Accused, even in the absence of documents produced by the complainant with regard to loan transaction in 23 C.C.No. 27371/2017 J question.
21. 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 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 24 C.C.No. 27371/2017 J 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 NO. 508 OF 2018 DT 15032018 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 25 C.C.No. 27371/2017 J 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 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.
26C.C.No. 27371/2017 J 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 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 27 C.C.No. 27371/2017 J 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 crossexamination, 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.
28C.C.No. 27371/2017 J The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial is not enough". 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, presumptions U/s.118a and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption is drawn the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied mandatory requirements and has proved that, the 29 C.C.No. 27371/2017 J 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 after service of the 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.
22. Therefore, for the above said reasons the defence taken by the Accused that, the complainant has failed to prove that, he has lent an amount of Rs.2 lakhs to the accused and the accused the accused has issued the cheque in question towards discharge of the said loan amount cannot be acceptable one. The defence taken by the Accused appears to be the complainant has to prove his claim by producing evidence as if it is required for proving of his debt before the Civil Court, but same cannot be permissible in a proceedings initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the above referred decision, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheque in question 30 C.C.No. 27371/2017 J was drawn for consideration as the Accused has admitted the cheque in question belongs to him and signature found on the cheque in question is also that of his signature. Therefore for the above said reasons the arguments canvased by the learned counsel for the accused at para No.2 to 8 in the written argument cannot be acceptable one.
23. In order to rebut the presumptions available to the complainant and to substantiate the defence of the accused, the accused himself examined as DW.1 and the accused in his evidence stated that, his sister by name Manjula required financial assistant and borrowed a sum of Rs.2 lakhs from one Srinivas who is soninlaw of the complainant on 05.10.2016 and his sister is physically disabled person and the soninlaw of the complainant insisted to give his blank signed cheque towards security of the loan amount borrowed by his sister and also collected his blank signed cheque and thereafter his sister repaid the said loan amount of Rs.2 lakhs on 27.02.2017 by way of online transfer to the account of the soninlaw of the complainant and thereafter there are differences arose between him and the soninlaw of the complainant in respect of the interest amount for 31 C.C.No. 27371/2017 J that reason the soninlaw of the complainant in order to take revenge against the him and his sister and to gain wrongfully has filed this complaint through his fatherinlaw i.e., the complainant herein by misusing his cheque. The accused / DW1 further deposed that, his sister has approached the soninlaw of the complainant on several times after repayment of the loan amount and requested for return of cheque which was given for security of the loan amount, but the soninlaw of the complainant postponed the same on one or other pretext and the soninlaw of the complainant is residing adjacent to his house, therefore on the faith and belief has not initiated nay action against the soninlaw of the complainant and he never borrowed any loan amount from the complainant and issued the cheque in question to the complainant towards discharge of the loan transaction as claimed by the complainant. In support of the oral evidence of the accused has produced true copies of the statement of accounts pertaining to his sister bank i.e., ICICI Bank which are at Ex.D.1 and Ex.D.2.
24. The accused has also examined his sister i.e., Manjula .M D/o Mahadeva as DW2. The DW2 in 32 C.C.No. 27371/2017 J her evidence has also deposed that, she has borrowed a loan amount of Rs.2 lakhs on 05.10.2016 on interest at the rate of 4% from the soninlaw of the complainant by name Srivinvas as she required financial assistance and she is physically disabled and at the time of receiving of the loan amount the soninlaw of the complainant has not received her cheque and demanded blank signed cheque of her brother i.e., the accused here in, therefore her brother had given signed blank cheque on her behalf as security towards the loan borrowed by her. The DW2 further deposed that, on 27.02.2017 she had repaid the loan amount of Rs.2 lakhs to the soninlaw of the complainant by way of online transfer from her account to the account of soninlaw of the complainant and thereafter the soninlaw of the complainant demanded more interest in that regard there were differences arose between them for that the soninlaw of the complainant has misused the cheque in question by filing this complaint through his fatherinlaw i.e., complainant herein. The DW2 further deposed that, after repayment of loan amount she approached the soninlaw of the complainant for return of cheque received towards security of the loan amount for 33 C.C.No. 27371/2017 J which the soninlaw of the complainant postponed the same on one or other reason and she had not taken any action against the soninlaw of the complainant as he is resident of her adjacent house and on faith and belief and the accused has not borrowed any amount from the complainant and has not issued cheque in question towards the alleged transaction in question. The DW2 identified the transfer of amount of Rs.2 lakhs on 27.02.2017 from her account to the account of soninlaw of the complainant in Ex.D.1.
25. It is relevant here to mention that, the complainant has not disputed that, the DW2 i.e., sister of the accused has borrowed loan amount of Rs.2 lakhs from his soninlaw and also not disputed the fact that, she had repaid the said amount of Rs.2 lakhs to his soninlaw, but has denied the issuance of cheque in question to his soninlaw towards security of the loan amount borrowed by the sister of the accused from his soninlaw by contending that, the transaction in question and transaction between her soninlaw and the sister of the accused i.e., DW2 are not one and the same. In this regard it is relevant here to mention that, admittedly there are 34 C.C.No. 27371/2017 J no documents produced by the accused or DW2 to show that, the cheque in question was issued to the soninlaw of the complainant towards the loan amount advanced by him to the DW2. The sonin law of the complainant i.e., Srinivas examined by the complainant as PW2 on behalf of complainant and the learned counsel for the accused has cross examined the PW2 in length but has not eliciated anything to believe the fact that, the cheque in question i.e., Ex.C.1 was given by the accused as security towards the loan amount borrowed by his sister from the soninlaw of the complainant i.e., PW2. In addition to that, the sister of the accused i.e., DW2 in her crossexamination clearly admitted as under:
"ಆರರರಪ ಪರರದದರರ ಬಳ ಸಲ ತಗದದಕರಕಡರದವದದ ನನಗ ಗರತತದ ರ ಎಕದರ ಸಕಯದ ನನಗ ಗರತತರ ದವದಲಲ ಎಕದದ ಉತತರ ಸದತತರ . ನನನ ಮತದತ ಪರರದದರರ ಮನ ಅಕಕ ಪಕಕ ಇರದತತದ ಎಕದರ ನಜ. ಪರರದದರರದ ನನಗ ಪರಚಯವರದತತರ . ಪರರದದರರ ಹತತರ ನನದ ಹಣದ ವವ ವಹರ ಮಡರದವದಲಲ .
Further admitted as under:
"ಆರರರಪ ಮತದತ ನನದ ಒಕದರ ಮನಯಲ ಇದದ ರರ ಸಹ ನಮಮ ನಮಮ ವವ ವಹರಗಳನದ ನ ನವರ ಮಡಕರಳದ ಳ ತತರ ದತತರ ವ ಎಕದರ 35 C.C.No. 27371/2017 J ನಜ.,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ಷ ಬಡಡ ಕಟಷದದ ದ ನವಯ ಲಯಕಕ ದಖಲ ನನದ ತಕಗಳಗ ಶ.4 ರಷದ ಹಜರದಪಸರದವದಲಲ . ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ನಸ1 ರಲ ಇರದವ ಚಕಆರರರಪಗ ಸರರರದತತದ . ನಸ1 ರಲರದವ ಚಕ ನದ ನ ಪರರದದರರದ ಆರರರಪಗ ಕರಟಷರ ದತತರ ಎಕದರ ನಜ.
Hence, the above said admissions of the DW2 makes it clear that, the DW2 has clearly admitted that, she does not know the loan amount borrowed by the accused from the complainant and though they are residing in the same house, but they separately looking after their respective affairs, hence it goes to show that, if really the accused has not borrowed loan amount from the complainant, definitely the DW2 would have denied the suggestion made to her, but instead of that, she admitted that, she does not know as to whether the loan amount borrowed by the accused from the complainant and they are separately looking after their personal transactions, if such being the fact then the question of issuing the cheque in question by the accused on behalf of DW2 in respect of the loan amount borrowed by her from the soninlaw of the complainant does not arise at all. It is also relevant here to mention that, the DW2 has not produced any documents to show 36 C.C.No. 27371/2017 J that, she had paid interest at the rate of 4% to the soninlaw of the complainant, if really there were differences arose between her and the soninlaw of the complainant and the accused in respect of the receiving of the interest amount and due to that, the soninlaw of the complainant misused the cheque in question by filing this complaint through the complainant, definitely the DW2 would have produced the documents to show that, she had paid interest amount to the soninlaw of the complainant, therefore in the absence of material documents the defence taken by the accused and evidence of the DW2 with regard to alleged misuse of cheque in question by the complainant cannot be acceptable one
26. It is also relevant here to mention that, the accused / DW1 in his cross examination has admitted that, the cheque in question i.e., Ex.C.1 belongs to him and signature found on Ex.C.1(a) is that of his signature and he had signed to the cheque on 05.10.2016 and the cheque in question has presented by the complainant through his banker and same has been dishonoured for want of Sufficient Funds as per Ex.C.3 and immediate after 37 C.C.No. 27371/2017 J dishonour of the cheque he got received the message about the bouncing of Ex.C.1 cheque. Hence the said admissions of the accused makes it clear that, the accused came to know about the dishonour of the cheque in question immediate after dishonour, if that being the fact and even after coming to know about the presentation of the cheque in question and its dishonour inspite of that, the accused has not made any efforts to take steps against the complainant for alleged misuse of cheque in question. If really the cheque in question was given as blank signed cheque to the complainant and immediate after its dishonour the accused could have taken steps against the complainant for alleged misuse of the cheque, but no such efforts have been made, in such circumstance the conduct of the accused may leads to draw an adverse inference against him that, in order to avoid liability in question the accused has taken such defence and same cannot be acceptable one. The accused / DW1 has categorically admitted in his evidence that, he has not produced any documents to show that, the disputed cheque has been given as security towards the loan amount borrowed by his sister from the soninlaw of the complainant, hence the admission 38 C.C.No. 27371/2017 J of the accused itself sufficient to hold that, the accused in order to avoid liability to pay the cheque amount as set up the defence which cannot be acceptable one. Therefore for the above said reasons the accused has miserably failed to prove that, the cheque in question was given by the accused on behalf of her sister towards the security of the loan amount of Rs.2 lakhs borrowed by his sister from the soninlaw of the complainant.
27. It is relevant here to mention that, If really the Accused had given the subject cheque as blank signed cheque to the complainant towards security of alleged loan amount of Rs.2 lakhs borrowed from the soninlaw of the accused by his sister and even after repayment of the said loan the soninlaw of the complainant and inspite of repeated request made by his sister, the soninlaw of the complainant did not return the cheque and in turn the soninlaw of the complainant by misusing the said cheque and has filed this complainant through his fatherinlaw i.e., the complainant herein against the accused, definitely the Accused or his sister would have taken either civil or criminal action against the soninlaw of the complainant or the complainant by issuing notice to them or by filing the complaint before the 39 C.C.No. 27371/2017 J concerned police or filing the case before the competent courts of law or by issuing reply to the notice issued by the complainant or at least she would have issued stop payment instructions to the accused bank but no such efforts have been made by the Accused or his sister, in such circumstances the unnatural conduct of the Accused or his sister for non initiation of legal action against the complainant or soninlaw of the complainant for getting return of his blank signed cheque, certainly an adverse inference can be drawn against accused that, the cheque in question was issued to the complainant towards discharge of legally recoverable debt. 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 40 C.C.No. 27371/2017 J repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt Conviction, Proper." Hence by applying the above principles of law to the present facts of the case in the present case though the Accused had taken defence that, the soninlaw of the complainant has collected his blank signed cheque at the time of lending the loan amount of Rs.2 lakhs to the sister of the accused as security to the said loan amount and even after repayment of the said loan amount same has been misused by soninlaw of the complainant through the complainant, but the said defence has not been proved by the accused, under such circumstances, it can be held that, the accused has not made any efforts to get return of the cheque in question alleged to has been given to soninlaw of the complainant for security of the alleged loan amount 41 C.C.No. 27371/2017 J lend by him, therefore, the said unnatural conduct of the accused in non taking of action may leads to draw an adverse inference 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 signature and cheque in question is belongs to him.
28. It is also relevant here to mention that, the Accused has taken specific defence that, the sonin law of the complainant has misused the cheque in question through his fatherinlaw which was given as security towards the loan amount of Rs.2 lakahs borrowed by his sister from the soninlaw of the complainant, but as it is already held in the above that, the Accused has miserably failed to prove the said defence i.e. the cheque in question was issued by him towards security of the alleged loan amount borrowed by his sister, in such circumstances, it can construed as cheque in question was issued by the accused only towards discharge of the liability in question. In this regard it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2015 (1) KCCR 235 in the case of 42 C.C.No. 27371/2017 J Lale Patel Vs. Sharanabasappa., wherein the Hon'ble High Court held that : NEGOTIABLE ISNTRUCEMTNS ACT, 1881 section 138 - Dishonour of cheque for insufficiency of funds Plea of accused that he had given a blank cheque signed as security for a transaction and complainant filled up the contents and denied existence of any debt or loan - Conviction by Trial court Affirmed by Appellate Court - Revision against. In another decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. Vasanthakumar Vs. Vijayakumari wherein the Hon'ble Apex court held that " NEGOTIABLE ISNTRUCEMTNS Act, 1881 Section s138 and 139 - acquittal - If justified Accused not disputing issuance of cheque and his signature eon it Plea that it was issued long back as security and that loan amount was repaid Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused Acquittal not proper. Hence the Hon'ble High Court of Karnataka in the above decisions clearly held that, if the Accused has taken defence 43 C.C.No. 27371/2017 J that, a blank signed cheque has been issued as a security for transaction and the complainant filled up the contents in the cheque and the accused denied the existence of debt or loan in such circumstances it is for the accused to prove his/her defence by producing cogent and convincible evidence, if the Accused has not proved the same in such circumstances, it cannot be held that, the cheque in question was issued for the purpose of security in connection with the transaction. In the present case also the Accused has failed to establish his defence that, the cheque in question was issued towards security of the alleged loan amount borrowed by his sister from the soninlaw of the complainant, under such circumstances the cheque so issued cannot be considered as the one issued as a security and the defence taken by the Accused is untenable one, in such circumstances by applying the principles of law laid down in the above decision the defence of the Accused cannot be acceptable one.
29. It is relevant here to mention that, according to the defence of the Accused that, the soninlaw of the complainant had collected his blank signed cheque at the time of alleged lending of 44 C.C.No. 27371/2017 J loan of Rs.2 lakhs to his sister as a security and thereafter by misusing the said cheque has field this complainant through his fatherinlaw against him, but the complainant in his crossexamination has denied the said suggestions made to him. As it is already held in the above that, the Accused has failed to prove his defence that, the soninlaw of the complainant had collected the alleged blank signed cheque from the Accused, in such circumstances the defence of the Accused cannot be acceptable one. However, even for sake of discussion if it is assumed that, the contents of the subject cheque is not filled in by the Accused even under such circumstances also, unless and until the Accused has proved his defence by producing cogent and convincible evidence, it cannot be held that, the contents of the cheque have been filled in by the complainant. In this regard, it is a relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of 45 C.C.No. 27371/2017 J 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 has failed to prove 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, it can be presumed even on fact also that the complainant has proved his case by discharging his burden by 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 46 C.C.No. 27371/2017 J 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 drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In such circumstances even if it is assumed that, the complainant admitted that, 47 C.C.No. 27371/2017 J the contents of cheque in question were filled in by him also 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.
30. It is also the defence of the accused that, the soninlaw of the complainant had collected his blank signed cheque towards security of the loan amount borrowed by his sister from him and thereafter the said blank signed cheque is misused by the soninlaw of the complainant by filing this false complaint through his fatherinlaw. But the Accused himself has admitted that, the cheque in question belongs to his account and signature found at Ex.P.1 (a) is that of his signature. Once signature on the negotiable instrument act is admitted, in that circumstances sec. 20 of N.I. Act comes into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here 48 C.C.No. 27371/2017 J to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that "
a reading of sec.20 of the act which is extracted above reveals that, the words used are ' either wholly blank or having written therein an incomplete negotiable instrument' . The instrument may be wholly blank or incomplete in a particular in either case, the holder has authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so vide that, the party so signing is bound to be a holder in due course. Promissory notes are often executed in the name of the payer and left unfilled to be afterwards filled by the actual holder, the object being to enable the owner to pass it off to another without incurring the responsibility as an endorser. Thus, it is seen that, person in possession of an incomplete instrument in maternal particulars has the authority prima facie to fill it and thus the executants becomes 49 C.C.No. 27371/2017 J liable to pay the amount due'. In another decision of Hon'ble High Court of Madras reported in 2005 (1) DCR 85 in the case of P.A. Thamatharan Vs. Dalmia cements (B) Ltd., wherein it is held that "
Negotiable Instrument Act 1991 - Sec. 138 - dishonour of cheque - plea -body of cheque was not written by Accused - held it is not mandatory and no law prescribes that, the body of cheque should also be written by the signatory to the cheque, a cheque could be filled up anybody and if it is signed by the account holder of the cheque'. In another decision of Hon'ble Apex court to India reported in (2002) 7 SCC in the case of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that " As long as signature on the cheque is admitted, whether the ink with which the other particulars are filled up is different or that the hand writing is not that of drawer does not matter. Until rebutted, the presumption that, cheque was issued for consideration exists". In another decision of Hon'ble High Court of Karnataka at Bengaluru in a case of Crl. Appeal No. 1664/2003 50 C.C.No. 27371/2017 J C/w. Crl.Appeal No.1663/2003 dated: 18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court at para No.19 held that " But, the question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false liability........ It is not objectionable or illegal in law to receive a inchoate negotiable instrument duly signed by the maker despite the material particulars are 51 C.C.No. 27371/2017 J kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten 52 C.C.No. 27371/2017 J contents.
31. Therefore in view of the principles of law of Hon'ble Apex court of India and also Hon'ble High Court of Karnataka and Madras referred above, In the present case the Accused has admitted the signature on Negotiable Instrument i.e. cheque and he also admitted issuance of the cheque to the complainant, it is primafacie proof of authorizing the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the mouth of the Accused that, the complainant had misused or fabricated the cheque in question given by him and the defence of the Accused cannot be acceptable one as the instrument i.e., cheque in question cannot be rendered unenforceable merely because the contents have been filled by different ink, as it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it.
32. 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 he has failed to prove his defence i.e., how the cheque in question came to the 53 C.C.No. 27371/2017 J possession of the Complainant, this would also give rise to an adverse inference against him. This preposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa". In another decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava" held that, " the Accused has to explain how the cheque entered into the hands of complainant". Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.
33. 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 lent a sum of Rs.2 lakhs to the accused as a hand loan and the accused in turn the accused has issued subject 54 C.C.No. 27371/2017 J cheque to the complainant towards discharge of the said debt, thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Funds Insufficient" and thereafter he got issued legal notice to the accused and the said notice was duly served on the Accused, 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 in favour of the complainant with regard to the existence of legally recoverable debt under Ex.C.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.
34. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act.
55C.C.No. 27371/2017 J 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.2,15,000/= (Rupees Two 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 (2) two 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.2,10,000/= (Rupees Two 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 56 C.C.No. 27371/2017 J recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Cash security deposited by the accused is hereby ordered to be returned to the accused (if not lapsed) after appeal period is over.
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 27th August 2021).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant: P.W.1 : Sri. Veerappa P.W.2 : Sri. V. Srinivas
2. List of documents exhibited on behalf of the Complainant: Ex.C.1 : Original Cheque 57 C.C.No. 27371/2017 J Ex.C.1(a) : Signature of the accused Ex.C.2 : Bank challan Ex.C.3 : Bank Memo Ex.C.4 : Office copy of the Legal Notice Ex.C.5 : Postal receipt Ex.C.6 : Returned Legal Notice Ex.C.7 : RPAD Cover Ex.C.8 : Postal Receipt Ex.C.9 & 10 : Statement of Accounts
3. List of witness/s examined on behalf of the Accused: DW.1 : Sri. M. Neelakanta DW.2 : Smt. Manjula .M
4. List of documents exhibited on behalf of the Accused: Ex.D.1 & 2 : True copies of the statement of account pertains to ICICI Bank (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
58C.C.No. 27371/2017 J 27.08.2021 Case called out, Counsel for the complainant and complainant absent. Accused and Counsel for the accused absent, Judgment pronounced since the fine amount and default sentence is only imposed against the Accused, no separate sentence is imposed against the Accused vide separate judgment, 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.2,15,000/=
(Rupees Two 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 (2) two 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.2,10,000/=
(Rupees Two 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/=
59
C.C.No. 27371/2017 J
(Rupees Five Thousand only)
shall be defrayed as prosecution
expenses to the state.
The Bail bond of the Accused
stands cancelled.
Cash security deposited by the
accused is hereby ordered to be
returned to the accused (if not
lapsed) after appeal period is
over.
Office 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.
60
C.C.No. 27371/2017 J