Bangalore District Court
Has Raised Bank Loan From Repco Home ... vs On 23.01.2019 The Complainant ... on 27 February, 2023
1 CC.9583/2019( J)
KABC030303052019
Presented on : 27-04-2019
Registered on : 27-04-2019
Decided on : 27-02-2023
Duration : 3 years, 10 months, 0 days
IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY.
Dated this the 27th Day of February-2023
Present: Lokesh Dhanapal Havale. B.A.L.L.B.,
XV Addl.C.M.M., Bengaluru.
Judgment U/s.355 of the Cr.P.C. 1973.
1.Sl.No.of the case CC.No.9583/2019
2.Name of the Complainant: Sri. Somashekara .N
@ Somashekar Reddy
S/o Narayanareddy,
Aged about 39 years,
R/at No.41/43, 1st Cross, 1st Main,
Singasandra, Hosur Main Road,
Opp. HDFC Bank,
Bengaluru- 560 068.
3.Name of the accused: Sri. G. Venkateshulu,
S/o Yerrappa,
Aged about 50 years,
R/at No.4, 5th Cross,
Nyanappanahalli Main Road,
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Chamundeshwari Nagar,
Narayanappa Layout,
Begur Hobli, Begur Village,
Bangalore- 560 076.
4.The offence complained of : U/s.138 of Negotiable Instruments
Act.
5.Plea of the accused: Pleaded not guilty.
6.Final Order: Acting U/s.255(2) Cr.P.C., accused
is acquitted.
7.Date of final Order 27.02.2023.
* * *
This complaint is filed U/Sec.200 of Cr.P.C. against the
accused for the offence punishable U/Sec.138 of the Negotiable
Instruments Act, 1881.
2. The facts of the complaint in brief are as under:
The accused is well known to the complainant from last 10
years and he is a building contractor. In the month of July 2018
the accused had approached the complainant to pay money for his
urgent business commitments and also to do the business of
building contract and on his request the complainant paid a sum
of Rs.3,00,000/- paid by way of cash on 13.07.2018 and the
accused had agreed to return the money within six months. The
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complainant has raised bank loan from REPCO Home Finance and
he was having money at that time, keeping money for construction
of house. After expiry of six months, the complainant had
approached the accused to repay the money, in the first week of
January 2019 issued a cheque bearing No.335352 dated 23.01.2019
for Rs.3,00,000/- drawn on Karnataka State Co-op Apex Bank Ltd,
HSR Agara Branch, Bengaluru. Upon the instructions of the
accused on 23.01.2019 the complainant presented the said cheque
for encashment through his banker State Bank of India, Hosur
Road branch, Bengaluru and it was returned dishonoured with
endorsement 'Funds Insufficient' on 25.01.2019. He issued legal
notice to the accused on 21.02.2019 through RPAD. The said
notice was refused by the accused and returned on 04.03.2019.
The accused did not pay the amount even after the expiry of 15
days. The accused thereby committed an offence punishable
U/s.138 of the N.I.Act.
3. After the institution of the complaint, the cognizance
was taken and it has been registered as PCR No.4894/2019. The
sworn statement of the complainant has been recorded and on the
basis of sworn statement and other materials on hand, the criminal
case has been registered against the accused and summons was
issued to accused. In response to the service of summons, the
accused appeared through his learned counsel and got enlarged on
bail. The prosecution papers were supplied to the accused and the
substance of the accusation was read over and explained to the
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accused in the language known to him. He pleaded not guilty and
claimed to be tried.
4. During trial the complainant examined himself as PW-1
and got marked Ex.P1 to P6. The statement of the accused U/s.
313 of Cr.P.C. was recorded. The accused examined himself as
DW.1 and got marked Ex.D1.
5. Heard the arguments. On perusal of the entire
materials on record, the points that arise for my consideration are
as under;
1. Whether the complainant proves that the
accused issued cheque bearing No.335352
dated 23.01.2019 for Rs.3,00,000/- drawn on
The Karnataka State Co-op Apex Bank Limited
towards the discharge of legally enforceable
debt/liability and on its presentation for
encashment, it was dishonored with an
endorsement "Funds Insufficient" and even
after the service of legal notice, the accused
has not paid the amount within 15 days and
thereby accused committed an offence
punishable U/Sec.138 of N.I. Act, 1881?
2. Whether the accused rebuts the
presumption U/s.139 of the N.I.Act?
3. What order?
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6. My answers on the above points for consideration are
as under:
Point No.1 : Negative
Point No.2 : Affirmative
Point No.3 : As per final order for the following;
REASONS
7. Point No.1 and 2 :- The points are taken together for
the common discussion to avoid repetition of facts and evidence. It
is necessary to discus the provisions U/s. 118(a) and 139 of the
Act., 1881 at this stage.
"118. Presumptions as to negotiable
instruments. - Until the contrary is
proved, the following presumptions shall
be made:-
(a) of consideration - that every
negotiable instrument was made or drawn
for consideration, and that every such
instrument, when it has been accepted,
indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or
transferred for consideration;"
"139. Presumption in favour of
holder.- It shall be presumed, unless the
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contrary is proved, that the holder of a
cheque received the cheque of the nature
referred to in section 138 for the
discharge, in whole or in part, of any
debt or other liability."
8. On plain perusal of the provision U/s. 118(a) and 139
of the N.I.Act., it can be seen that initially the presumptions
constituted under these two provisions are in favour of the
complainant. However the presumptions are rebuttable and it is
open to an accused to raise a defence to rebut the statutory
presumptions. An accused can raise a defence, wherein the
existence of legally enforceable debt or liability can be contested.
9. It is also well established that an accused need not
examine himself for discharging the burden of proof placed upon
him under a statute. He may discharge his burden on the basis of
the materials already brought on record. An accused has
constitutional rights to remain silent. The standard of proof on
part of the accused and that of the prosecution in a Criminal Case
is different. The prosecution must prove the guilt of an accused
beyond all reasonable doubts, the standard of proof so as to prove
a defence on the part of an accused is preponderance of
probabilities.
10. Under the light of position of the law, I have perused
the complaint and the evidence placed on record. The complainant
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in support of her claim made in the complaint has adduced
evidence by examining herself as PW-1 and she got marked Ex.P1
to 6. PW-1 filed his evidence affidavit on oath and reiterated the
complaint averments. Ex.P1 is the cheque bearing No.335352 dated
23.01.2019 for Rs.3,00,000/- drawn on The Karnataka State Co-op
Apex Bank Ltd, Bengaluru. Ex.P1(a) is the signature of the
accused. Ex.P2 is the Bank endorsement with shara "Funds
Insufficient" dated 25.01.2019. Ex.P3 is the office copy of Legal
Notice dated 21.02.2019 issued by the complainant to the accused
demanding repayment of the cheque amount to the addresses of
the accused. Ex.P4 is the postal receipt for having sent the legal
notice to the accused. Ex.P5 is the postal envelope which was
reurned with shara 'refused' on 04.03.2019. Ex.P6 is the Bank
Pass Book, which shows that the complainant withdrawn the
amount of Rs.3,00,000/- on 13.07.2018.
11. On perusal of the documents, it is clear that the
cheque at Ex.P1 bearing No.335352 dated 23.01.2019 for
Rs.3,00,000/- drawn on The Karnataka State Co-op Apex Bank
Limited Bengaluru issued in favour of the complainant was
presented within its validity. Ex.P2 is the bank endorsement with
shara "Funds Insufficient" dated:25.01.2019. Ex.P3 is the office
copy of Legal Notice dated 21.02.2019, which was refused by he
accused. The accused disputed the service of notice in the cross
examination of PW.1. During the cross examination DW.1 denied
that he refused the notice. It is pertinent to note that the accused
has not denied the address in the notice and complaint as wrong
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address. No materials are placed on record to show that the said
address is wrong address and he is residing at some other place
during that time. In the decision reported in 2014 STPL 9253 SC
[2014 (AIR (SCW) 4321] in the case of Ajeet Seeds Ltd. vs.
K.Gopala Krishnaiah, the Hon'ble Apex Court has held as under:
"14. Section 27 gives rise to a presumption that service of
notice has been effected when it is sent to the correct
address by registered post. In view of the said presumption,
when stating that a notice has been sent by registered post
to the address of the drawer, it is unnecessary to further
aver in the complaint that in spite of the return of the
notice unserved, it is deemed to have been served or that
the addressee is deemed to have knowledge of the notice.
Unless and until the contrary is proved by the addressee,
service of notice is deemed to have been effected at the
time at which the letter would have been delivered in the
ordinary course of business. This Court has already held that
when a notice is sent by registered post and is returned
with a postal endorsement 'refused' or 'not available in the
house' or 'house locked' or 'shop closed' or 'addressee not
in station', due service has to be presumed. It is, therefore,
manifest that in view of the presumption available under
Section 27 of the Act, it is not necessary to aver in the
complaint under Section 138 of the Act that service of
notice was evaded by the accused or that the accused had a
role to play in the return of the notice unserved.
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Therefore it is clear that if the notice is sent to the correct
address through RPAD and if it is returned with shara 'refused', it
is deemed service of notice. The complaint was filed on
09.04.2019, which is within limitation. The cheques and the
signatures are not disputed. Therefore, the documents on record
clearly show that the complainant has complied the ingredients of
Section 138(a) to (c) of the N.I.Act. Therefore the presumptions
U/s.118 and 139 of the N.I.Act arise in favour of the complainant.
The presumptions are rebuttable and the burden is on the accused
to rebut the presumptions. The accused can rebut the presumption
by raising probable defence and proving it relying on the evidence
of the complainant or by leading his direct evidence.
12. In the following decisions the law in respect of the
presumptions, burden of proof and rebuttal of presumptions is
settled:-
(a) The Hon'ble Supreme Court in the case of M.S.
Narayana Menon Vs. State of Kerala - (2006) 6 Supreme
Court Cases 39, held as under:-
"30. Applying the said definitions of 'proved' or 'disproved'
to principle behind Section 118(a) of the Act, the Court shall
presume a negotiable instrument to be for consideration
unless and until after considering the matter before it, it
either believes that the consideration does not exist or
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considers the non-existence of the consideration so probable
that a prudent man ought, under the circumstances of the
particular case, to act upon the supposition that the
consideration does not exist. For rebutting such presumption,
what is needed is to raise a probable defence. Even for
the said purpose, the evidence adduced on behalf of the
complainant could be relied upon.
31. A Division Bench of this Court in Bharat Barrel &
Drum Manufacturing Company v. Amin Chand Payrelal
reported in (1999) 3 SCC 35 albeit in a civil case laid
down the law in the following terms:
"12. Upon consideration of various judgments as noted
hereinabove, the position of law which emerges is that
once execution of the promissory note is admitted, the
presumption under Section 118(a) would arise that it is
supported by a consideration. Such a presumption is
rebuttable. The defendant can prove the non-existence
of a consideration by raising a probable defence. If the
defendant is proved to have discharged the initial onus
of proof showing that the existence of consideration
was improbable or doubtful or the same was illegal,
the onus would shift to the plaintiff who will be
obliged to prove it as a matter of fact and upon its
failure to prove would disentitle him to the grant of
relief on the basis of the negotiable instrument. The
burden upon the defendant of proving the non-
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existence of the consideration can be either direct or
by bringing on record the preponderance of
probabilities by reference to the circumstances upon
which he relies. In such an event, the plaintiff is
entitled under law to rely upon all the evidence led in
the case including that of the plaintiff as well. In case,
where the defendant fails to discharge the initial onus
of proof by showing the non- existence of the
consideration, the plaintiff would invariably be held
entitled to the benefit of presumption arising under
Section 118(a) in his favour. The court may not insist
upon the defendant to disprove the existence of
consideration by leading direct evidence as the
existence of negative evidence is neither possible nor
contemplated and even if led, is to be seen with a
doubt."
This Court, therefore, clearly opined that it is not
necessary for the defendant to disprove the existence of
consideration by way of direct evidence.
32. The standard of proof evidently is preponderance of
probabilities. Inference of preponderance of probabilities can
be drawn not only from the materials on records but also by
reference to the circumstances upon which he relies.
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33. Presumption drawn under a statute has only an
evidentiary value. Presumptions are raised in terms of the
Evidence Act. Presumption drawn in respect of one fact may
be an evidence even for the purpose of drawing presumption
under another."
(b) The Hon'ble Supreme Court in Kumar Exports Vs.
Sharma carpets reported in (2009) 2 SCC 513, held as under;
"20. The accused in a trial under Section 138 of the Act has
two options. He can either show that consideration and debt
did not exist or that under the particular circumstances of
the case the non-existence of consideration and debt is so
probable that a prudent man ought to suppose that no
consideration and debt existed. To rebut the statutory
presumptions an accused is not expected to prove his
defence beyond reasonable doubt as is expected of the
complainant in a criminal trial. The accused may adduce
direct evidence to prove that the note in question was not
supported by consideration and that there was no debt or
liability to be discharged by him. However, the court need
not insist in every case that the accused should disprove the
non- existence of consideration and debt by leading direct
evidence because the existence of negative evidence is
neither possible nor contemplated. At the same time, it is
clear that bare denial of the passing of the consideration and
existence of debt, apparently would not serve the purpose of
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the accused. Something which is probable has to be brought
on record for getting the burden of proof shifted to the
complainant. To disprove the presumptions, the accused
should bring on record such facts and circumstances, upon
consideration of which, the court may either believe that the
consideration and debt did not exist or their non-existence
was so probable that a prudent man would under the
circumstances of the case, act upon the plea that they did
not exist. Apart from adducing direct evidence to prove that
the note in question was not supported by consideration or
that he had not incurred any debt or liability, the accused
may also rely upon circumstantial evidence and if the
circumstances so relied upon are compelling, the burden
may likewise shift again on to the complainant. The accused
may also rely upon presumptions of fact, for instance, those
mentioned in Section 114 of the Evidence Act to rebut the
presumptions arising under Sections 118 and 139 of the Act.
21. The accused has also an option to prove the non-
existence of consideration and debt or liability either by
letting in evidence or in some clear and exceptional cases,
from the case set out by the complainant, that is, the
averments in the complaint, the case set out in the statutory
notice and evidence adduced by the complainant during the
trial. Once such rebuttal evidence is adduced and accepted
by the court, having regard to all the circumstances of the
case and the preponderance of probabilities, the evidential
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burden shifts back to the complainant and, thereafter, the
presumptions under Sections 118 and 139 of the Act will not
again come to the complainant's rescue.
(c) The Hon'ble Supreme Court in Rangappa Vs. Mohan
reported in (2010)11 SCC 441 held as under:
26. In light of these extracts, we are in agreement
with the respondent-claimant that the presumption mandated
by Section 139 of the Act does indeed include the existence
of a legally enforceable debt or liability. To that extent, the
impugned observations in Krishna Janardhan Bhat (supra)
may not be correct. However, this does not in any way cast
doubt on the correctness of the decision in that case since it
was based on the specific facts and circumstances therein.
As noted in the citations, this is of course in the nature of a
rebuttable presumption and it is open to the accused to raise
a defence, wherein the existence of a legally enforceable
debt or liability can be contested. However, there can be no
doubt that there is an initial presumption, which favours the
complainant.
27. Section 139 of the Act is an example of a
reverse onus clause that has been included in furtherance of
the legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to the
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dishonour of cheques, the rebuttable presumption under
Section 139 is a device to prevent undue delay in the course
of litigation. However, it must be remembered that the
offence made punishable by Section 138 can be better
described as a regulatory offence since the bouncing of a
cheque is largely in the nature of a civil wrong whose
impact is usually confined to the private parties involved in
commercial transactions. In such a scenario, the test of
proportionality should guide the construction and
interpretation of reverse onus clauses and the
accused/defendant cannot be expected to discharge an
unduly high standard or proof.
28. In the absence of compelling justifications,
reverse onus clauses usually impose an evidentiary burden
and not a persuasive burden. Keeping this in view, it is a
settled position that when an accused has to rebut the
presumption under Section 139, the standard of proof for
doing so is that of `preponderance of probabilities'.
Therefore, if the accused is able to raise a probable defence
which creates doubts about the existence of a legally
enforceable debt or liability, the prosecution can fail. As
clarified in the citations, the accused can rely on the
materials submitted by the complainant in order to raise
such a defence and it is conceivable that in some cases the
accused may not need to adduce evidence of his/her own.
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(d) The the Hon'ble Supreme Court in Basalingappa Vs.
Mudibasappa reported in (2019) 5 SCC 418 held as under:-
"25. We having noticed the ratio laid down by this Court in
the above cases on Sections 118 (a) and 139, we now
summarise the principles enumerated by this Court in
following manner:
25.1. Once the execution of cheque is admitted Section
139 of the Act mandates a presumption that the
cheque was for the discharge of any debt or other
liability.
25.2. The presumption under Section 139 is a
rebuttable presumption and the onus is on the accused
to raise the probable defence. The standard of proof
for rebutting the presumption is that of preponderance
of probabilities.
25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the accused
can also rely on the materials submitted by the
complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be
drawn not only from the materials brought on record
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by the parties but also by reference to the
circumstances upon which they rely.
25.4. That it is not necessary for the accused to come
in the witness box in support of his defence, Section
139 imposed an evidentiary burden and not a
persuasive burden.
25.5. It is not necessary for the accused to come in
the witness box to support his defence.
(e) The Hon'ble Supreme Court of India in the case of
A.P.S Forex Services Pvt Ltd Vs. Shakthi Internatonal Fashion
Linkers & Others reported in 2020 STPL 5773 SC, held at
para No.7 as under:
7. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque and
that the cheque in question was issued for the second time,
after the earlier cheques were dishonoured and that even
according to the accused some amount was due and
payable, there is a presumption under Section 139 of the
N.I. Act that there exists a legally enforceable debt or
liability. Of course such presumption is rebuttable in nature.
However, to rebut the presumption the accused was required
to lead the evidence that full amount due and payable to
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the complainant has been paid. In the present case, no such
evidence has been led by the accused. The story put forward
by the accused that the cheques were given by way of
security is not believable in absence of further evidence to
rebut the presumption and more particularly the cheque in
question was issued for the second time, after the earlier
cheques were dishonoured. Therefore, both the courts below
have materially erred in not properly appreciating and
considering the presumption in favour of the complainant
that there exists legally enforceable debt or liability as per
Section 139 of the N.I. Act. It appears that both, the
Learned Trial Court as well as the High Court, have
committed error in shifting the burden upon the complainant
to prove the debt or liability, without appreciating the
presumption under Section 139 of N.I. Act. As observed
above, Section 139 of the Act is an example of reverse onus
clause and therefore once the issuance of the cheque has
been admitted and even the signature on the cheque has
been admitted, there is always a presumption in favour of
the complainant that there exists legally enforceable debt or
liability and thereafter it is for the accused to rebut such
presumption by leading evidence.
(f) The Hon'ble Supreme Court of India in the case of
Thriyambak S Hegade Vs. Sripad reported in 2021 STPL
10270 SC, held at para No.11 & 12 as under:
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From the facts arising in this case and the
nature of the rival contentions, the record would disclose
that the signature on the documents at Exhibits P-6 and P-2
is not disputed. Exhibit P-2 is the dishonoured cheque based
on which the complaint was filed. From the evidence
tendered before the JMFC, it is clear that the respondent
has not disputed the signature on the cheque. If that be the
position, as noted by the courts below a presumption would
arise under Section 139 in favour of the appellant who was
the holder of the cheque. Section 139 of the N.I. Act reads
as hereunder: "139. Presumption in favour of holder- It
shall be presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature
referred to in section 138 for the discharge, in whole or in
part, of any debt or other liability."
12. Insofar as the payment of the amount by the
appellant in the context of the cheque having been signed
by the respondent, the presumption for passing of the
consideration would arise as provided under Section 118(a)
of N.I. Act which reads as hereunder:- "118. Presumptions
as to negotiable instruments - Until the contrary is proved,
the following presumptions shall be made: -
(a) of consideration - that every negotiable instrument
was made or drawn for consideration, and that every such
instrument, when it has been accepted, indorsed, negotiated
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or transferred, was accepted, indorsed, negotiated or
transferred for consideration."
(g) The Hon'ble Supreme Court of India in the case of
M/s. Kalamani Tex v. P. Balasubramanian reported in 2021
STPL 1056 observed at para No.14 to 18 as under:-
14. Adverting to the case in hand, we find on a
plain reading of its Judgment that the trial Court completely
overlooked the provisions and failed to appreciate the
statutory presumption drawn under Section 118 and Section
139 of NIA. The Statute mandates that once the signature(s)
of an accused on the cheque/negotiable instrument are
established, then these 'reverse onus' clauses become
operative. In such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon him.
This point of law has been crystalized by this Court in
Rohitbhai Jivanlal Patel Vs. State of Gujarat, (2019) 18 SCC
106 in the following words:
"In the case at hand, even after purportedly drawing
the presumption under Section 139 of the NI Act, the trial
Court proceeded to question the want of evidence on the
part of the complainant as regards the source of funds for
advancing loan to the accused and want of examination of
relevant witnesses who allegedly extended him money for
advancing it to the accused. This approach of the Trial
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Court had been at variance with the principles of
presumption in law. After such presumption, the onus
shifted to the accused and unless the accused had discharged
the onus by bringing on record such facts and circumstances
as to show the preponderance of probabilities tilting in his
favour, any doubt on the complainant's case could not have
been raised for want of evidence regarding the source of
funds for advancing loan to the appellant-accused....."
15. Once the 2nd Appellant had admitted his
signatures on the cheque and the Deed, the trial Court
ought to have presumed that the cheque was issued as
consideration for a legally enforceable debt. The trial Court
fell in error when it called upon the Complainant-
Respondent to explain the circumstances under which the
appellants were liable to pay. Such approach of the Trial
Court was directly in the teeth of the established legal
position as discussed above, and amounts to a patent error
of law.
16. No doubt, and as correctly argued by senior
Counsel for the appellants, the presumptions raised under
Section 118 and Section 139 are rebuttable in nature. As
held in M.S.Narayana Menon Vs. State of Kerala, (2006) 6
SCC 39, which was relied upon in Basalingappa (supra), a
probable defence needs to be raised, which must meet the
standard of "preponderance of probability", and not mere
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possibility. These principles were also affirmed in the case
of Kumar Exports (supra), wherein it was further held that a
bare denial of passing of consideration would not aid the
case of accused.
17. Even if we take the arguments raised by the
appellants at face value that only a blank cheque and signed
blank stamp papers were given to the respondent, yet the
statutory presumption cannot be obliterated. It is useful to
cite Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, 36
where this court held that:
"Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards
some payment, would attract presumption under
Section 139 of the Negotiable Instruments Act, in
the absence of any cogent evidence to show that
the cheque was not issued in discharge of a
debt."
18. Considering the fact that there has been an
admitted business relationship between the parties, we are of
the opinion that the defence raised by the appellants does
not inspire confidence or meet the standard of
'preponderance of probability'. In the absence of any other
relevant material, it appears to us that the High Court did
not err in discarding the appellants' defence and upholding
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the onus imposed upon them in terms of Section 118 and
Section 139 of the NIA.
13. Therefore on perusal of the above judgments it is clear
that it is well established that if the cheque and signature are
admitted, the presumptions U/s. 139 and 118 of NI Act arise that
the cheque was issued for legally enforceable debt/liability and the
cheque was made or drawn for consideration. The presumptions
are rebuttable. The accused has to raise a probable defence and
prove it by adducing evidence, which must meet the standard of
preponderance of probabilities. Unless the same has been done,
doubt can not be raised on the case of the complainant. An
accused need not examine himself for discharging the burden of
proof placed upon him under a statute. He may discharge his
burden on the basis of the materials already brought on record.
An accused has constitutional rights to remain silent. The standard
of proof on part of the accused and that of the prosecution in a
Criminal Case is different. The prosecution must prove the guilt of
an accused beyond all reasonable doubts and the standard of proof
so as to prove a defence on the part of an accused is
preponderance of probabilities. The Inference of preponderance of
probabilities can be drawn not only from the materials brought on
record by the parties but also by reference to the circumstances
upon which they rely. He need not lead defence evidence for the
said purpose and it can be done by relying on the evidence of the
prosecution on record. It is the duty of the Courts to consider
carefully and appreciate the totality of the evidence and then come
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to a conclusion, whether in a given case, the accused has shown
that the case of the complainant is in peril for the reason that the
accused has established a probable defence either by leading direct
defence evidence or by relying on the evidence of the
complainant.
14. It is the defence of the accused that he knew the
complainant from past 15 years. The complainant used to supply
jelly stones and sand. His owner used to put money in his account
and he used to pay the complainant by way of cash as well as
cheque for the jelly stones and sand supplied by him. The
transaction between him and the complainant was closed in the
year 2018. When the transaction was going on between him and
the complainant, he used to give cheques to the complainant. He
used to pay the complainant by way of cash and he used to take
the cheques back. After closure of transaction between him and
the complainant, the complainant did not return such cheques. He
asked for return of cheques but the complainant went on seeking
time but he did not return the cheques. He used to give signed
blank cheque and the complainant used to fill up the cheques. He
did not receive the notice. He has no liability to pay any amount
to the complainant. He produced bank statement as per Ex.D1 to
prove his defence.
15. The accused produced ExD.1 in support of his defence.
On perusal of Ex.D1, which is the bank statement of the accused,
25 CC.9583/2019( J)
it is found that there are several transactions between the
complainant and the accused. Ex.D1 discloses that on 19.03.2014
cheque of the accused bearing No.336281 for Rs.50,000/- was
encashed by the complainant. Similarly on 11.04.2014
Rs.1,00,000/- was credited to the complainant. Similarly on
07.05.2014 Rs.30,000/- was credited to the complainant. Similarly
on 07.09.2017 cheque of the accused bearing No.827963 for
Rs.7,200/- was encashed by the complainant.
16. The counsel for the complainant cross examined the
accused/DW.1. During the cross examination of DW.1, the counsel
for the complainant has made several suggestions in respect of the
case of the complainant pertaining to the loan transaction and
denying the defence of the accused but DW.1 denied all the
suggestions. He admitted that the cheque and the signature in the
cheque belongs to him. He denied the service of notice and the
suggestions that he refused to receive the notice as per the shara
of the postal authority. Nothing was elicited in the cross
examination of DW.1 to disbelieve the defence taken by the
accused.
17. The counsel for the accused cross examined PW.1 and
it was elicited in the cross examination of PW.1 that he has been
residing at the address mentioned in the cause title from past 9
years. He is residing in rented house and rent is Rs.7,000/- per
month. He is working as driver in Government Department and he
has salary of Rs.26,000/- per month. His salary will credit to his
26 CC.9583/2019( J)
account every month. It was further elicited that the accused
sought for loan of Rs.3,00,000/- on 13.07.2018 and he paid
Rs.3,00,000/- by way of cash on the same day. He had amount of
Rs.3,00,000/- with him which he had drawn from the bank. He
withdrawn on amount of Rs.3,00,000/- on 13.07.2018 through
cheque. He has no hurdle to lend the loan to the accused through
bank account. He voluntarily stated that he paid by way of cash
as the accused requested for the same. The above portion of cross
examination shows that the accused challenged the financial
capacity of the complainant. However the complainant has
produced the bank pass book as per ExP.6 to show that he has
withdrawn the amount as on the date of loan transaction.
Therefore the defence of the accused that the complainant has no
financial capacity to lend the amount is not acceptable. Further
the presumption U/s.139 of NI Act that the cheque is issued for
legally enforceable debt/liability operates in favour of the
complainant until it is rebutted by the accused by adducing the
cogent evidence.
18. The counsel for the accused cross examined PW.1 and
suggested that the accused is not his close friend but PW.1 denied
it. It was further elicited that the accused is building construction
Mastri. It is clearly elicited from the mouth of the complainant
that there is no other transaction between him and the accused
except the transaction in question and the accused has not at all
issued any cheque to him prior to the issuance of cheque in
question. However during the cross examination, PW.1 admitted
27 CC.9583/2019( J)
that he got encashed Rs.50,000/- from the bank account of the
accused through cheque No.336281. He denied that he got
encashed Rs.1,00,000/- from the account of the accused on
11.04.2014 through cheque No.336285. He also denied the
encashment of cheque No.827163 on 07.09.2017 for Rs.7,200/-.
The bank statement of the accused at ExD.1 clearly show that
there are transactions between the complainant and the accused in
2014 and 2017 and amounts were credited to the account of the
complainant. Ex.D1 discloses that on 19.03.2014 cheque of the
accused bearing No.336281 for Rs.50,000/- was encashed by the
complainant. Similarly on 11.04.2014 Rs.1,00,000/- was credited to
the complainant. Similarly on 07.05.2014 Rs.30,000/- was credited
to the complainant. Similarly on 07.09.2017 cheque of the accused
bearing No.827963 for Rs.7,200/- was encashed by the
complainant. This shows that the versions of the complainant are
contradictory and the case of the complainant is doubtful.
19. It was further elicited that the accused issued the
cheque in January 2019. He filled up the contents of the cheque.
When it was suggested to PW.1 that he had filled up the cheque
as the accused did not know reading and writing, he answered
that he filled up the contents as per the say of the accused.
Further it is the defence of the accused that he issued signed
blank cheque and it was misused by the complainant by filling it
up as per his convenience. Even if the blank signed cheque was
given and it was filled up later, it attracts the ingredients
u/sec.138 of N.I Act. As per Section 20 of the N.I.Act, if the
28 CC.9583/2019( J)
person signs and delivers Negotiable Instrument and it is left
incomplete and thereby he authorizes the holder to complete the
Negotiable Instrument and thereby he is liable for the amount
mentioned in the Negotiable Instrument. In the Judgment rendered
by the Hon'ble Supreme Court of India in Bir Singh V/s.Mukesh
Kumar reported in AIR 2019 SC 2446, it was held by the
Hon'ble Apex Court that "If a signed blank cheque is voluntarily
presented to a payee, towards some payment, the payee may fill
up the amount and other particulars. This in itself would not
invalidate the cheque. The onus would still be on the accused to
prove that the cheque was not in discharge of a debt or liability
by adducing evidence. Even a blank cheque leaf, voluntarily
singed and handed over by the accused, which is towards some
payment, would attract presumption under Section 139 of the
Negotiable Instruments Act, in the absence of any cogent evidence
to show that the cheque was not issued in discharge of a debt."
PW.1 denied that he is also doing the business of supplying raw
materials. He denied that he had taken 3 to 4 cheques from the
accused for supply of raw materials. He denied that he had got
encashed the cheques. He denied that he misused the cheques
issued by the accused for payment in respect of supply of raw
materials and filed the false case. However ExD.1 shows that the
accused encashed the cheques of the accused during 2014 and
2017. The amounts were credited to the account of the
complainant. It is pertinent to note that the cheque number of
cheque in question is 335352, which is alleged to have been issued
on 23.01.2019. Ex.D1 also discloses that the transactions pertaining
29 CC.9583/2019( J)
to the said cheque series number is during the year 2014. The
cheque bearing No.335351 was cleared on 25.01.2014 and cheque
bearing No.335353 was cleared on 12.02.20214. The last cheque of
the said series and the series beginning with 33 itself was utilized
during the year 2014. During the year 2015 the cheque series
beginning with 58 started and during the year 2017 the cheque
series beginning with 82 started. Therefore it is doubtful that the
accused kept cheque of that series till 2019 and issued the cheque
to the complainant for discharge of debt, which is alleged to have
been given on 13.07.2018. Therefore the case of the complainant
is doubtful. ExD.1 makes the defence of the accused probable one.
20. The amount is alleged to have been lent on
13.07.2018. It was elicited in the cross examination of PW.1 that
he did not go to the work on 13.07.2018. He stated that it was
weekly off for him. He can produce the document to prove the
same. However the complainant has not produced any document.
Therefore adverse inference has to be drawn that the complainant
has no such document and if he had and it was produced it would
go against him. This creates doubt on the case of the complainant.
21. The counsel for the accused cross examined PW.1 in
respect of the source of funds and it was elicited that PW.1 had
the amount which he had taken as loan for construction of his
house. It was also elicited that he started to construct the house in
the year 2017. He did not remember the date of loan. He took 2½
to 3 years to complete the construction of the house. He admitted
30 CC.9583/2019( J)
that he obtained the loan as the amount was necessary for the
construction of the house. Normally the house can be constructed
within a period of 6 months to one year if there are no financial
hurdles. The complainant started construction of house in 2017
and it took 2½ to 3 years to complete the construction of the
house, which obviously means that there was delay due to
financial arrangement. Such being the case, it is hard to believe
that the person who himself has shortage of funds to construct his
house and took loan has lent loan to the accused without getting
executed any contemporary documents and without taking even
cheque at the time of lending loan. It was asked to PW.1 that the
accused is not his close friend but he denied it. However it was
elicited that he did not know the education qualification of the
accused. He stated that he knew the accused as he was from the
side of his village but he failed to give the details of the village of
the accused. This makes the case of the complainant doubtful.
22. For the reasons mentioned herein above, the accused
proved that there was no existence of legally enforceable
debt/liability between him and the complainant and he has not at
all issued the instant cheque towards the discharge of legally
enforceable liability of Rs.3,00,000/-. On the other hand, the
complainant failed to prove that the accused issued the cheque for
the legally enforceable liability; the cheque was dishonored due to
the reason 'Funds Insufficient' and the notice issued by him was
refused by the accused. The accused is able to rebut the statutory
presumptions U/s.118(a) & (b) and 139 of the N.I.Act. Accordingly
31 CC.9583/2019( J)
the accused is found not guilty for the offence punishable U/s.138
of the N.I.Act. Hence, I proceed to answer the Point No.1 in
Negative and Point No.2 in the Affirmative.
23. Point No.3 : In view of the reasons assigned in Point
No.1 and 2 and considering the facts and circumstances of the
case, I proceed to pass the following:-
ORDER
As per the provisions of Sec.255(1) Cr.P.C. the accused is hereby acquitted of the offence punishable u/s.138 of NI Act, 1881.
The Personal Bond executed by the accused is hereby stands cancelled and the cash surety of Rs.3,000/- deposited by the accused shall be refunded to him after appeal period is over.
(Dictated to the Stenographer, transcript thereof is computerized and printout taken by her, is verified and then pronounced by me in Open Court on this the 27th day of February-2023.) (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.
32 CC.9583/2019( J) ANNEXURE Witnesses examined for the Complainant:-
PW.1 : Sri. Somashekara. N Documents marked for the Complainant:-
Ex.P1 : Cheque
Ex.P1(a) : Signature of the accused
Ex.P2 : Bank endorsement
Ex.P3 : Office copy of the legal notice
Ex.P4 : Postal receipt
Ex.P5 : Postal envelope
Ex.P6 : Bank pass book
Witnesses examined For Defence:-
DW.1 : Sri. Venkatesh Documents marked for Defence:-
Ex.D1 : Bank Statement
(Lokesh Dhanapal Havale),
XV Addl.CMM., Bengaluru.