Bangalore District Court
Smt. Sharada vs Sri. Chandrashekar Naidu on 3 June, 2020
1 C.C.No.9560/2018 J
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated:- This the 3rd day of June 2020
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.9560/2018
Complainant : Smt. Sharada,
W/o.R. Krishnamurthy,
Aged about 46 years,
Residing at No.9,
Church Road,
Uttarahalli,
Subramanyapura,
Bengaluru -560 061.
(By Sri. V.Anjanappa., Adv.,)
- Vs -
Accused : Sri. Chandrashekar Naidu,
S/o. Anjaneya Naidu,
Aged about 53 years,
No.425, 2nd Floor,
3rd Main Road,
Banashankari III Stage,
Channamanakere Acchukattu,
Vidyapeeta Ward,
Bengaluru -560 085.
(By Sri. Shivaraju. H.B., Adv.,)
2 C.C.No.9560/2018 J
Case instituted : 5.4.2018
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 3.6.2020
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, Accused is known to her and her husband since several years and the Accused is doing the business of construction work, as he was facing some financial problems, he approached the complainant and requested her for hand loan of Rs.8 Lakhs in the first week of May 2014 in order to meet his financial and business commitments, she had an amount of Rs.6 Lakhs with her as she had leased the portion of her premises and out of the rent generated from her property and further she has taken an amount of Rs.2 Lakhs from one Ambarish, in total 3 C.C.No.9560/2018 J she arranged an amount of Rs.8 Lakhs and paid the same to the Accused on 20.5.2014 by way of cash in the presence of one Jayaram and Accused has duly acknowledged the receipt of the same and promised and agreed to repay the said hand loan amount within one year from the date of borrowal, for which, the Accused had issued a cheque bearing No.984600 drawn on Canara Bank, Uttarahalli Branch, Bengaluru. The complainant further contends that, after expiry of one year, she along with Jayaram has demanded the Accused to repay the loan amount many times, after several requests and demands, the Accused were prolonging the matter by one pretext or other and in the month of September 2015, her husband expired and she was under depression and as such, she did not approach the Accused for repayment for some times, after recovery from the death of her husband, she has again requested the Accused to return the loan amount, as the said Ambarish was also demanding her for return of his amount. The complainant further contends that, the Accused was taking time for the repayment by giving lame excuses and after persistent demands and reminders the Accused and his friend have finally 4 C.C.No.9560/2018 J 15.2.2018 came to her premises and requested her to present the said cheque for encashment, accordingly the Accused has duly got filled the said cheque for Rs.8 Lakhs dated: 20.2.2018 and her name in the cheque and has assured her that he will maintain sufficient balance in his account and the said cheques would be honoured on its due presentation, as per the request of the Accused, she presented the said cheque for encashment through his banker, the same came to be returned dishonoured as "Funds Insufficient" vide bank endorsement dated: 23.2.2018, and the same was intimated to the Accused and requested to pay the cheque amount, but the Accused has not repaid the amount to her and he gave evasive answers to her, thereafter on 5.3.2018 she has sent legal notice to the Accused through her advocate through RPAD calling upon the accused to pay the amount of Rs.8,00,000/- i.e. amount covered under dishonoured cheque within 15 days from the date of receipt of the notice, and the said legal notice was served on the Accused on 12.3.2018, even after service of legal notice, the Accused has not paid the dishonoured cheque amount till date given any 5 C.C.No.9560/2018 J reply. Hence she 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 her affidavit-in-lieu of sworn statement, in which, she has reiterated the averments of the complaint. In support of her oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to P.13 i.e, Original Cheque dated: 20.2.2018 as per Ex.P.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.P.1(a), the Bank Memo as per Ex.P.2, the office copy of Legal Notice as per Ex.P.3, postal receipt as per Ex.P.4, postal acknowledgement as per Ex.P.5, certified copies of the registered sale deeds dated:1.8.2011 and 27.3.2002 as per Ex.P.6 and P.7 respectively, certified copies of receipts as per Ex.P.8 to P.10 respectively, certified copies of katha extracts as per Ex.P.11 and P.12 and certified copies of Tax receipt as per Ex.P.13.
4. Thereafter the complainant has examined two witnesses on her behalf as PW.2 and PW.3 and 6 C.C.No.9560/2018 J closed her side.
5. Prima-facie case has been made out against the accused and summons was issued against the accused in turn he has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
6. As per the direction of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the Accused, as he intended to set out his defence, the case came to be posted for the Cross-examination of complainant.
7. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence subsequently the he has not lead his rebuttal evidence.
7 C.C.No.9560/2018 J8. Heard both sides and perused written arguments and additional written argument filed by the complainant and perused the materials on record and the decision submitted by the learned counsel for the Accused i.e., reported in (2008) I SCC (Cri) 200 incase of K. Prakashan Vs. P.K. Surenderan.
9. On the basis of complaint, evidence of complainant and documents the following points that are arise for consideration are:-
1. Whether the complainant proves that the accused has issued cheque bearing No. 984600 dated:
20.2.2018 for Rs.8,00,000/-, drawn on Canara Bank, Uttarahalli Branch, Bengaluru, to discharge legally recoverable debt to the complainant and when the complainant has presented cheque for encashment through his banker but the said cheque has been dishonoured for the reasons "Funds Insufficient" on 23.2.2018 and the complainant issued legal notice to the accused on 5.3.2018 and inspite of it the accused has not paid the cheques amount within prescribed period there by the accused has committed an offence U/s.138 of the 8 C.C.No.9560/2018 J Negotiable instruments Act?
2. What Order?
10. The above points are answered as under:
Point No.1: In the Affirmative Point No.2: As per final order for the following:
REASONS
11. Point No.1 : Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been 9 C.C.No.9560/2018 J committed an offence. The offence U/s.138 of N.I. Act pre-supposes conditions for prosecution of an offence which are as under:
1. Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
2. Cheque shall be presented for payment within specified time i.e., from the date of issue before expiry of its validity.
3. 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
4. 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 conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer in respect of bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
10 C.C.No.9560/2018 J12. It is also one of the essential ingredient 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 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 are rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
13. In the present case the complainant got examined as PW.1 by filing her affidavit evidence wherein the complainant has reiterated the entire averments of the complaint, the complainant/PW.1 in her evidence testified that, Accused is doing the 11 C.C.No.9560/2018 J business of construction work, as he was facing some financial problems, he approached her and requested for hand loan of Rs.8 Lakhs in the first week of May 2014 in order to meet his financial and business commitments, at that time, she had an amount of Rs.6 Lakhs with her as she had leased the portion of her premises and out of the rent generated from her property and she has taken an amount of Rs.2 Lakhs from one Ambarish, in total she arranged an amount of Rs.8 Lakhs and paid the same to the Accused on 20.5.2014 by way of cash in the presence of Jayaram and the Accused has duly acknowledged the receipt of the same, promised and agreed to repay the said hand loan amount within one year from the date of borrowal. The complainant/PW.1 further testified that, at the time of receiving amount the Accused had issued a cheque bearing No.984600 drawn on Canara Bank, Uttarahalli Branch, Bengaluru and after expiry of one year, she along with Jayaram has demanded the Accused to repay the loan amount many times, after several requests and demands, the Accused was prolonging the matter by one pretext or other and in the month of September 2015, her husband expired 12 C.C.No.9560/2018 J and she was under depression and as such, she did not approach the Accused for repayment for some times, after recovery from the death of her husband, she has again requested the Accused to return the loan amount, as the said Ambarish was also demanding her for return of his amount. The complainant/ PW.1 further testified that, the Accused was taking time for repayment by giving lame excuses and after persistent demands and reminders the Accused and his friend have finally on 15.2.2018 came to her premises and requested her to present the said cheque for encashment, accordingly the Accused has duly got filled the said cheque for Rs.8 Lakhs dated: 20.2.2018 and her name in the cheque and the Accused has assured her that he will maintain sufficient balance in his account and the said cheque would be honoured on its due presentation and as per the request of the Accused, she presented the said cheque for encashment through his banker, the same came to be returned dishonoured as "Funds Insufficient"
vide bank endorsement dated: 23.2.2018, and the same was intimated to the Accused and requested to pay the cheque amount, but the Accused has not 13 C.C.No.9560/2018 J repaid the amount to her and he gave evasive answers to her, thereafter on 5.3.2018 she has sent legal notice to the Accused through her advocate through RPAD calling upon the accused to pay the amount of Rs.8,00,000/- i.e. amount covered under dishonoured cheque within 15 days from the date of receipt of the notice, and the said legal notice was served on the Accused on 12.3.2018, even after service of legal notice, the Accused has not paid the dishonoured cheque amount till date or given any reply.
14. In support of the oral evidence of the complainant, she produced and marked the documents as per Ex.P.1 to P.13 i.e, Original Cheque dated: 20.2.2018 as per Ex.P.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.P.1(a), the Bank Memo as per Ex.P.2, the office copy of Legal Notice as per Ex.P.3, postal receipt as per Ex.P.4, postal acknowledgement as per Ex.P.5, certified copies of the registered sale deeds dated:1.8.2011 and 27.3.2002 as per Ex.P.6 and P.7 respectively, certified copies of receipts as per Ex.P.8 to P.10 14 C.C.No.9560/2018 J respectively, certified copies of katha extracts as per Ex.P.11 and P.12 and certified copy of the Tax receipt as per Ex.P.13.
15. The complainant in support of her evidence got examined two witnesses as PW.2 and PW.3. the PW.2 in his evidence has stated that, he know the complainant and her husband and also the Accused and Accused has borrowed a hand loan of Rs.8 Lakhs from the complainant on 20.5.2014 at complainant's house and at the time of lending a loan amount he and one Ambarish i.e. PW.3 were present and at the time of borrowing the loan amount Accused has issued a post dated cheque promising to pay the amount within one year.
16. The PW.3 in his evidence stated that, complainant had approached him by stating that, Accused required loan of Rs. 8 Lakhs and she had arranged a sum of Rs.6 Lakhs and requested him to pay Rs.2 Lakhs , at that time he was having amount with him in order to open photo shop, as such he paid Rs.2 Lakhs to the complainant by way of cash on 15.5.2014 and the complainant in turn paid Rs.8 15 C.C.No.9560/2018 J Lakhs to the Accused in her residence, at the time of lending amount the Accused, himself and another person Jayaram i.e. PW.2 were present.
17. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not in dispute that, cheque in question i.e. Ex.P.1 to belongs to the account of the accused and not disputed signature of the Accused which is appearing at Ex.P.1(a) is that of the Accused. It is also not in dispute by the accused that, the cheque in question presented for encashment and dishonoured for the reason of "Funds Insufficient" on 23.2.2018, since as matter on record, proved by return memo dated: 26.2.2018 i.e. Ex.P.2 issued by the concerned bank, therefore it is a matter on record and has been proved that, the cheque in question was presented within its validity period and dishonoured as per the bank endorsement issued by the banker of accused. It is also not in dispute that, after dishonour of the cheque in dispute and receipt of bank memo within 30 days from the date of receipt of bank memo, a legal notice was caused as per Ex.P.3 to the Accused 16 C.C.No.9560/2018 J calling upon him to pay amount covered under the dishonoured cheque and inspite of service of notice upon the Accused but he did not return the loan in question and has not given any reply to the legal notice.
18. It is the specific defence of the Accused during the course of cross-examination of the complainant that, he has denied the claim made by the complainant and also issuance of the cheque towards discharge of the liability in question. It is also the specific defence of the Accused that, the cheque in question i.e. Ex.P.1 was issued to the deceased husband of the complainant during his life time in connection with the chit transaction conducted by deceased husband of the complainant and the said cheque has been misused by the complainant. Hence on this back ground the oral and documentary evidence of the complainant and Accused has to be examined as to whether the Accused has rebutted presumption available to the complainant.
19. It is relevant here to mention that, the learned counsel for the defence has cross-examined 17 C.C.No.9560/2018 J the complainant, PW.2 and PW.3 in length but nothing has been elicited to discredit or discard their evidences, instead of eliciting anything materials from the complainant the Accused rather concentrated his defence on production of document in respect of source of income and also the cheque in question was collected by the deceased husband of the complainant in connection with the chit transaction, but the suggestions made to the complainant in respect of the said defence have been categorically denied by the complainant. The complainant/PW.1 specifically stated that, she know the Accused since 10 to 12 years and came in contact with the Accused through her tenant by name Manjunath and she had lent a loan of Rs. 8 Lakhs to the Accused on 20.5.2014 and at the time of lending of the loan amount her husband, herself, one Jayaram and her nephew by name Ambarish were present. The complainant/PW.1 has also stated that, she had arranged the amount of Rs.8 Lakhs out of the lease amount and rental income i.e. total amount of Rs.6 Lakhs and had also received an amount of Rs.2 Lakhs from her nephew Ambarish by way of cash and the said amount of Rs.8 Lakhs paid 18 C.C.No.9560/2018 J to the Accused. The complainant/PW.1 further stated that, the Accused is doing building construction business since 12 years and she has lent the loan amount to the Accused in her house. It is true that, the learned counsel for the Accused has elicited certain inconsistent statement and statements regarding non production of the documents from the complainant/PW.1 during the course of cross-examination, but the said statements cannot be accepted to discard the entire case of the complainant as the Accused has admitted the issuance of cheque to the complainant i.e. complainant's husband and signature on the cheque, therefore it is for the Accused to rebut the presumption available to the complainant U/s.118a and 139 of N.I. Act. Thus on careful perusal of the entire cross-examination of the PW.1, nothing has been elicited to accept the defence of the Accused that, the cheque in question was not issued to the complainant towards discharge of debt in question.
20. It is also important to note here that, though the learned counsel for the Accused cross- examined the PW2 and PW.3 but nothing has been 19 C.C.No.9560/2018 J elicited to discard their evidence, on the contrary the PW.2 and PW.3 in their cross-examination have categorically stated that, in their presence only the complainant has paid an amount of Rs.8 Lakhs to the Accused and in turn the Accused has issued the cheque in question towards repayment of the amount borrowed by him. The PW.2 and PW.3 have denied the suggestions made to them that, they are deposing falsely on behalf of the complainant as she is their relative and also denied the suggestions made to them that, in their presence the complainant has not paid the loan amount to the Accused and in turn the Accused has not issued the cheque to the complainant and also denied the suggestions that, the Accused has issued blank signed cheque to the complainant's husband, therefore the entire cross-examination of the PW.2 and PW.3 makes it clear that, in their presence only the complainant has paid an amount of Rs.8 Lakhs to the Accused and the Accused in turn has issued the cheque in question to the complainant towards discharge of the said amount. It is true that, the PW.3 has admitted that, he has not taken any document for having advancing an amount of Rs.2 20 C.C.No.9560/2018 J Lakhs to the complainant but only on that ground his evidence cannot be discarded, as admittedly the Complainant is the aunt of the PW.3, in such circumstances there may not be getting the documents for advancing the loan amount of Rs.2 Lakhs. It is also true that, PW.2 has also admitted in his cross-examination that, the husband of the complainant has given amount to the Accused but he further stated that, at the time of lending the loan amount complainant, he and Accused were present, therefore only on the admission of the PW.2 that, the husband of the complainant handed over the amount to the Accused by itself does not mean that, the husband of the complainant has lend the loan amount to the Accused but not the complainant. It is settled law that, the oral evidence of the witness has to be appreciated by reading entire depositions but not picking up particular word or sentence from the deposition of the witness, in such circumstances if the whole evidence of PW.2 is taken into consideration it can be held that, the PW.2 has stated that, complainant has advanced a loan of Rs.8 Lakhs to the Accused and in turn the Accused has issued cheque in question towards discharge of 21 C.C.No.9560/2018 J the said loan amount.
21. It is relevant here to mention that, it is true that the complainant in her cross-examination admitted that, she has not collected document from the Accused at the time of lending of the loan amount to him but she stated that, Accused has given the cheque in question to her. It is also admitted that, she has not produced the documents to show that, she has leased her house and collected an amount of Rs.6 Lakhs from her tenant and she had received an amount of Rs.2 Lakhs from her nephew by name Ambarish. But as it is already stated in the above that, the complainant has examined her nephew by name Ambarish as PW.3 who has stated about lending of Rs.2 Lakhs to the complainant and in turn the complainant has lent an amount of Rs.8 Lakhs to the Accused. The complainant has also examined another witness i.e. PW.2 who was also present at the time of lending of the loan amount to the Accused and PW.2 has supported the case of the complainant, in such circumstances the defence taken by the Accused the complainant has not produced the documents to 22 C.C.No.9560/2018 J prove her source of income and also lending of loan amount to the Accused cannot be acceptable one. In addition to that, as it is already held in the above that, the complainant proved that the cheque in question i.e Ex.P.1 belongs to the Accused and signature found at Ex.P.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 the same was dishonoured for the reason of "Funds Insufficient" as per Ex.P.2 and thereafter the legal notice caused by him through RPAD to the Accused was served on him, in such circumstances, it can be held that, the complainant has discharged her initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initially the presumptions are available in favour of the complainant U/s.118a and 139 of the N.I. Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such 23 C.C.No.9560/2018 J circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even the said 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 the documents are not produced by the complainant with regard to loan transaction in question. 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 24 C.C.No.9560/2018 J Instruments Act, 1881 - S.139 - Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However such presumption is rebuttable in nature - Criminal Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque was his, statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15-03-2018 between ROHITBHAI JIVANLAL PATEL Vs. STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that " When such a presumption is drawn, 25 C.C.No.9560/2018 J the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, " Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the 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 26 C.C.No.9560/2018 J evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt". It is also held that, " the Trial court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the 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 27 C.C.No.9560/2018 J burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability ". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in Crl. Appeal No. 2109/2017 dated:
15.10.2019 wherein the Hon'ble High Court of Karnataka held that "the Accused has not given any reply to the notice and also in the cross-
examination, he categorically admits that, the cheque has bounced on account of no sufficient fund in the bank account of the Accused. Mere non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the 28 C.C.No.9560/2018 J contention of the complainant by producing cogent evidence before the court and mere denial is not enough".
22. 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, in such circumstances presumptions U/s.118a and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption are 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 29 C.C.No.9560/2018 J the mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to him and signature appearing on the cheque is that of his signature and legal notice issued by complainant was served on the Accused, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act.
23. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the defence that, the complainant has not produced the document to show that, she was having source of income or funds to lend the loan amount to the Accused as on the date of lending of the loan amount and has not collected the documents for having advancing the loan amount of Rs.8 Lakhs to the Accused at the time of alleged lending of loan amount cannot be acceptable one. In this case also the learned defence counsel argued that, the complainant has to prove her claim by producing her evidence as if it is required for proving her debt before the Civil Court, same cannot be permissible in 30 C.C.No.9560/2018 J a proceedings initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the above referred decisions, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheque in question was drawn for consideration as the Accused has admitted the cheque in question belongs to him and signature found on the cheque in question is also that of his signature.
24. It is the specific defence of the Accused during the course of cross-examination of the complainant that, the deceased husband of the complainant during his life time i.e. in the year 2007 was conducting chit business and in the said business he was also one of the member and at the time of bidding the chit amount the deceased husband of the complainant had collected one blank signed cheque and blank pronote from him and the said cheque has been misused by the complainant by filling up the same after the death of her husband by filing this complaint.
25. In order to rebut the presumptions raised 31 C.C.No.9560/2018 J in favour of the complainant, the Accused has not entered into witness box and examined before the court, except the suggestions made to the complainant during the course of cross-examination, the Accused has not produced any documentary proof to show that, the deceased husband of the complainant was running chit business during his life time and the Accused was also subscriber to the chit transaction in the year 2007 and the Accused has bid the chit amount, during that time the deceased husband of the complainant had collected his blank signed cheque and pronote in connection with the chit bid amount as alleged by the Accused in his defence. Therefore the defence taken by the Accused remained as allegation against the complainant but have not proved by him by producing cogent and convincible evidence, in such circumstances it can be held that, the defence of the Accused appears to be denial in nature and the Accused has not rebutted the evidence produced by the complainant by leading his evidence and producing documents in support of his evidence. It is settled law that, the accused can rebut the presumption only on the basis of materials produced 32 C.C.No.9560/2018 J by the complainant even without entering into the witness box but in the present case the Accused has failed to substantiate his defence version in order to rebut the presumption available to the complainant and to prove the defense of the accused, under such circumstance, it is for the accused to disprove the case of the complainant or rebut the presumption then only the onus will be shifted on the complainant to prove his case.
Admittedly the accused did not entered in to the witness box, therefore an adverse inference can be drawn against the accused that he has failed to rebut the presumption available to the complainant. Therefore it is clear that, except having denial of the case of the Complainant in the cross examination of complainant, the Accused has not taken any interest so as to prove his defence. In this regard, it is relevant here to refer a decision of Hon'ble Apex Court of India reported in "AIR 2018 SC 3173 in a case of Kishan Rao Vs. Shankargouda" wherein the Hon'ble Apex Court held that " Negotiable Instruments Act (26 of 1881), Ss. 138, 139- Dishonour of cheque - Presumption as to - Accused issuing cheque of Rs.2 Lakhs towards 33 C.C.No.9560/2018 J repayment of loan to Complainant- said cheque dishonoured on account of insufficiency of funds- Complainant proving issuance of cheque having signatures of Accused - Accused failing to rebut presumption raised against him and no evidence led by him in his support - Acquittal of Accused by High Court in revisional jurisdiction on ground of doubt in mind of Court with regard to existence of loan, improper- Accused, liable to be convicted. In another decision decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would 34 C.C.No.9560/2018 J attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt. Therefore the principles of law laid down in the above decision are aptly applicable to the case on hand, since in this case also the complainant proved the fact that she has lent an amount of Rs.8 Lakhs to the Accused and the accused in turn issued cheque for discharge of the said amount as per Ex.P.1. The accused has also failed to enter into witness box to rebut the statutory presumption in support of his defense in such 35 C.C.No.9560/2018 J circumstances the defense taken by the accused counsel during the course of cross examination and argument cannot be acceptable one.
26. It is also important to note here that, the Accused in his defence alleged that, the deceased husband of the complainant during his life time had collected his signed blank cheque and pronote in connection with the chit transaction bid amount which conducted by him and the said blank signed cheque has been misused by the complainant after the death of her husband by filing this complaint. If really the deceased husband of the complainant during his life time had collected signed blank cheque and pronote in connection with chit transaction from the Accused and after the death of her husband the complainant misused the said cheque by filing this complaint, the Accused would have made an efforts or to initiate legal action against the complainant for misuse of the cheque which was collected by her deceased husband as alleged by the Accused, but no such efforts have been made by the Accused and no documents have been produced to show that, there was a chit 36 C.C.No.9560/2018 J transaction between him and the deceased husband of the complainant and the Accused was also one of the subscriber to the said chit transaction and has bid the amount, in such circumstances only on the basis of oral say of the Accused that too suggestions made during the course of cross-examination of the complainant it cannot be held that, the deceased husband of the complainant had collected blank signed cheque and pronote of the Accused in connection with the alleged chit transaction and the said cheque has been misused by the complainant by filing this complaint. Therefore the defence of the Accused cannot be acceptable one, in this regard, it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan (dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that " Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt- cheques allegedly issued by accused towards repayment of debt- Defence of accused that 10 cheques issued towards repayment of loan back 37 C.C.No.9560/2018 J 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 also the accused has not made any efforts to get return of the cheque in question alleged to have been collected by the deceased husband of the complainant in respect of alleged chit transaction during the year 2007, under such circumstances, the said unnatural conduct of the accused in non taking of action, an adverse inference can be drawn against the accused that, the cheque in question issued by the accused towards discharge of the liability as presumption U/s.139 of N.I. Act would operate against him.
27. It is also the defence of the Accused that, the deceased husband of the complainant has 38 C.C.No.9560/2018 J collected the blank signed cheque and pronote from him in connection with alleged chit transaction during the year 2007 and after the death of the husband of the complainant, the complainant has been misused the cheque in question and the contents of the cheque have been filled by the complainant and has filed this complaint against him. Even for sake of discussion, if it is assumed that, the Accused had given blank cheque in favour of the deceased husband of the complainant in respect of the alleged chit transaction in the year 2007 itself and subsequently the contents of the cheque have been filled by the complainant and filed this case but as it is already held in the above that, except oral say nothing has been produced by the Accused to prove his defence that, how the cheque in question has been entered in to the hands of complainant in the year 2007 as alleged by him. In such circumstances, for sake of discussion, if the defence of the Accused is taken into consideration, it can be presumed that, the contents have been filled in the presence of the Accused only and the said cheque itself would not invalidates. In this regard, it is relevant here to refer the decision of Hon'ble Apex 39 C.C.No.9560/2018 J Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of presumed fact." In the present case the Accused did not entered into witness box 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 her case by discharging her burden and complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, " presumption as to legally enforceable debt is 40 C.C.No.9560/2018 J rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In the present case though the accused has taken specific defence that, the cheque in question was not issued towards repayment of the loan in question but the same was collected by the deceased husband of the complainant in respect of the alleged chit transaction in the year 2007, but as it is already held in the above that, the accused has not proved the said defence, in such circumstances even for sake of discussion if it is assumed that the contents of cheque in question was filled up by the complainant 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 complainant in presence of the Accused at his request and the said cheque has been issued towards discharge of legally recoverable debt.
41 C.C.No.9560/2018 J28. It is also relevant here to mention that, the Accused during the cross-examination of the complainant has specifically suggested that, the deceased husband of the complainant has collected the blank signed cheque and pronote from him in connection with alleged chit transaction during the year 2007 and after the death of the husband of the complainant, the complainant has been misused the cheque in question and the contents of the cheque have been filled by the complainant and has filed this complaint against him, but the said suggestions were denied by the complainant. Hence the suggestions made to the complainant by the Accused makes it clear that, according to the defence of the Accused, the cheque which was given by him to the deceased husband of the complainant towards chit transaction conducted by the deceased husband of the complainant during his life time, but after death of the deceased husband the complainant did not return the said cheque. But as it is already held in the above the Accused except the suggestions made to the complainant, has not produced any documents to prove the said defence, in such circumstances, it is very difficulty to accept the 42 C.C.No.9560/2018 J defence. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2012 (4) KCCR 2634 in the case of Sri. Prakash @ Jnana Prakash Vs. Ms. T.S. Susheela wherein the Hon'ble High Court held that " NEGOTIABLE ISNTRUCTMETS ACT, 1881 - Section 138 - Complaint under - Cheque dishonoured for "insufficient funds" - Plea of accused as to non -receipt of demand notice, absence of legal liability, misuse of documents given as security in an independent chit transaction - Convicted by Trial Court- Confirmed by Appellate Court - Revision against- The plea as to misuse of documents would not be believed due to in action of the accused. In another decision of Hon'ble High Court of Karnataka reported in 2015 (1) KCCR 235 in the case of Lale Patel Vs. Sharanabasappa., wherein the Hon'ble High Court held that "NEGOTIABLE ISNTRUMENTS 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 43 C.C.No.9560/2018 J loan - Conviction by Trial court - Affirmed by Appellate Court - Revision against. Hence the Hon'ble High Court of Karnataka in the above decisions clearly held that, if the Accused has taken defence that, the a blank signed cheque has been issued as a security for transaction and the complainant filled up the contents and the accused denied the existence of debt or loan in such circumstances it is for the accused to prove his 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 to show that, the cheque in question was issued towards chit transaction alleged to have been conducted by the deceased husband of the complainant in the year 2007, 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. It is also relevant here to refer another decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. 44 C.C.No.9560/2018 J Vasanthakumar Vs. Vijayakumari wherein the Hon'ble Apex court held that "NEGOTIABLE ISNTRUMENTS Act, 1881- Section s138 and 139
- acquittal - If justified- Accused not disputing issuance of cheque and his signature on it- Plea that it was issued long back as security and that loan amount was repaid- Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused- Acquittal not proper. Hence in the present case also it is the main defence of the Accused that the cheque in dispute alleged to have been issued in the year 2007 itself to the deceased husband of the complainant for security towards chit transaction and the complainant by misusing the said cheque has filed this complaint but the Accused has admitted the issuance of cheque and his signature but no documents or proof given by the Accused to prove his defence in such circumstances by applying the principles of law laid down in the above decision the defence of the Accused cannot be acceptable one.
29. It is also important to note here that, the 45 C.C.No.9560/2018 J Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and he has failed to explain as to how his cheque has come to the possession of the Complainant, this would also give rise to an adverse inference against him. This 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".
Hence in the present case also the Accused has failed to explain how the cheque in question was entered into the hands of complainant. Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.
30. The learned counsel for the Accused 46 C.C.No.9560/2018 J during the course of his argument referred the oral and documentary evidence of the complainant and argued that, the complainant has failed to prove her source of income to lend the loan amount to the Accused and she had lent an amount of Rs. 8 Lakhs to the Accused and in turn the Accused in order to repay the said loan amount has issued the cheque in question. The arguments canvassed by the learned counsel for the defence are not acceptable, in view of the discussions made by this court in the above while appreciating the oral and documentary evidence and this court has come to the conclusion that, the complainant has proved that, she has lent an amount of Rs.8 Lakhs to the Accused and inorder to repay the said amount the Accused has issued the cheque in question and the said cheque was presented by the complainant through her banker and same was dishonoured as "Funds Insufficient"
and even after issuance of the notice by the complainant and after service of the notice, he did not repay the said amount and the Accused has miserably failed to prove his defence, in such circumstances the Accused has committed an offence punishable U/s.138 of N.I. Act, therefore 47 C.C.No.9560/2018 J the arguments canvassed by the learned counsel for the defence are not accepted.
31. 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, she has lent a sum of Rs.8 Lakhs to the accused as a hand loan and the accused in turn has issued cheque in question i.e. Ex.P.1 to the complainant towards repayment of the hand loan, thereafter the complainant has presented the said cheque through her banker and same was returned dishonoured with an endorsement of "Funds Insufficient" and thereafter she got issued legal notice to the accused and inspite of service of the said notice, the Accused did not repaid loan amount borrowed by him, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 Cheque.
48 C.C.No.9560/2018 JTherefore 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.
32. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following :-
ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.49 C.C.No.9560/2018 J
The accused is sentenced to pay a fine of Rs.8,15,000/= (Rupees Eight Lakhs and Fifteen Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.8,10,000/= (Rupees Eight Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
His Bail bond stands cancelled.
. Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 3rd day of June, 2020).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.50 C.C.No.9560/2018 J
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Smt. Sharada; P.W.2 : Sri. Jayaram; P.W.3 : Sri. Ambarish;
2. List of documents exhibited on behalf of the Complainant:-
Ex.P-1 : Original Cheque;
Ex.P-1(a) : Signature of the Accused;
Ex.P-2 : Bank Memo;
Ex.P-3 : Office copy of the Legal Notice;
Ex.P-4 : postal receipt;
Ex.P-5 : Postal acknowledgement;
Ex.P-6 & P-7 : Certified copies of registered sale deeds
dated: 1.8.2011, 27.3.2002
Ex.P-8 to P-10 : Certified copies of Receipts Ex.P-11 & P- : Certified copies of Katha Extracts;
12 Ex.P-13 : Certified copy of the Tax Receipt;
3. List of witness/s examined on behalf of the Accused:-
-Nil-
4. List of documents exhibited on behalf of the Accused:-
- Nil-
(SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.51 C.C.No.9560/2018 J
.
3.6.2020 As per the Notification of Hon'ble High Court i.e. modified Standard Operating Procedure (SOP) - District Judiciary dated: 28th May 2020 and as per the directions of Hon'ble High Court of Karnataka dated: 3.5.2020 i.e. para No.31, today the case is posted for Judgment.
Counsel for complainant and Accused are called out, Both counsels for Complainant and Accused are present.
. Judgment pronounced in the open court vide separate order.
ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.8,15,000/= (Rupees Eight Lakhs and Fifteen Thousand only) within one month from the date of order, in default he shall under go simple imprisonment 52 C.C.No.9560/2018 J for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.8,10,000/= (Rupees Eight Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
His Bail bond stands cancelled.
. Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.