Bangalore District Court
Sri.C.S.Achar vs Smt.H.S.Bharathi on 10 June, 2022
IN THE COURT OF THE XVIII ADDL.CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
PRESENT: MANJUNATHA M.S. B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
DATED : THIS THE 10 th DAY OF JUNE 2022
Criminal Case No. 15110/2019
COMPLAINANT: Sri.C.S.ACHAR
S/o Sri.N.Lakshmkipathachar,
Aged about 55 years,
R/at No.91, 2nd B Main Road,
Yelahanka New Town,
Bangalore-560 064.
(By Sri.H.K- Advocate)
// Versus //
ACCUSED: Smt.H.S.BHARATHI,
W/o Sri.Bommegowda,
Aged about 52 years,
R/at No.11, "D" Block,
Vishwanagar, Near Sambram College
Vidyaranyapura Post,
Bangalore-560 097.
(By Sri.K.S.M. - Advocate)
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Name of the complaint : Sri.C.S.Achar
S/o N.Lakshmipathachar,
2 Judgment C.C.15110/2019
Date of commencement
of evidence : 04-07-2019
Date of closing evidence : 23-03-2022
Opinion of the Judge : Accused found not guilty.
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE.
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 of the Negotiable Instruments Act ( in short referred as "N.I. Act") against the accused alleging that, she has committed the offence punishable under section 138 of NI Act.
02. The sum and substance of the complainant case is as follows; The complainant and accused are known to each other for the past several years and in that acquaintance in the Month of February 2018 the accused has approached the complainant for financial help of Rs. 2,00,000/-. Considering her request, on 23-02-2018 the complainant has deposited Rs.50,000/- to the bank account of accused. The complainant has paid Rs.50,000/- on 28-02-2018 and Rs. 1,00,000/- on 03-03-2018 to the accused by way of cash.
3 Judgment C.C.15110/2019 On 03-03-2018 while receiving Rs.1,00,000/- from the complainant the accused has executed On Demand Promissory Note and also assured to repay the said hand loan amount within a period of 9 months. But she has not kept her promise. After repeated request and demand made by the complainant for repayment of the said hand loan amount, the accused has issued a cheque bearing No. 215190 for Rs.2,00,000/- dated 15.2.2019 drawn on Canara Bank, Yelahanka Satellite Town, Bangalore and also assured the complainant the cheque will be honoured on its presentation. As per the instructions of the accused the complainant has presented the said cheque for encashment through his banker i.e., Canara Bank, Yelahank Satellite Town Branch, Bengaluru. The said cheque was returned unpaid with an endorsement "Funds Insufficient" on 18.2.2019. Thereafter, the complainant has got issued demand notice on 20-2-2019 to the accused by demanding the payment of cheque amount. The notice was duly served on accused on 23-2-2019. But the said notice was returned as "Not claimed". Despite of the notice the accused has not paid the cheque amount and thereby she has committed an offence punishable under section 138 of N I Act.
4 Judgment C.C.15110/2019
03. After filing of complaint, this court has taken cognizance of the offence punishable under section 138 of Negotiable Instrument Act, sworn statement of the complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons was issued. After appearance, accused enlarged on bail and plea was recorded as per section 251 of Cr.P.C. The accused has not pleaded guilty but submitted that he has defense to make.
04. As per the direction of Hon'ble supreme court in "Indian Bank Association V/s Union of India and others reported in (2014) 5 SCC 590, the sworn statement of the complainant treated as complainant evidence and proprietor of complainant firm has examined as PW1 by filing affidavit of chief-examination and got marked Ex.P.1 to 7. The accused has filed application under section 145(2) of NI Act for recall of PW1 for the purpose of cross- examination. The said application came to be allowed and defence counsel has fully cross-examined PW1. After completion of complainant's evidence, the statement of accused as contemplated under section 313 of code of criminal procedure was recorded. The 5 Judgment C.C.15110/2019 accused has denied all the incriminating material appears against him in the complainant's evidence. In order to prove his defence the accused has examined herself as DW.1 and got exhibited Ex.D1 in support of her oral testimony.
05. Heard the arguments of both sides. The Complainant counsel has filed written arguments. I have perused the materials available on record, written arguments filed by the complainant counsel.
06. The points that arise for my consideration are as follows;
1. Whether the complainant proves that, accused has issued cheque bearing No.215190 dated 15-02-2019 for Rs.2,00,000/- towards discharge of her liability, which was returned unpaid on presentation for the reason "Funds Insufficient" and despite of notice he has not paid the cheque amount and thereby she has committed an offence punishable under section 138 of Negotiable Instruments Act.?
2. What Order?
07. My answer to the above points is as follows;
Point No.1: In the Negative.
Point No.2: As per final order for the following;
6 Judgment C.C.15110/2019 REASONS
08. POINT No.1: The Complainant has filed this complaint alleging that the accused has committed offence punishable under section 138 of N.I. Act. He pleads and asserts that, the accused in discharge of her liability has issued cheque bearing No.215190 dated 15.2.2019 for Rs.2,00,000/- drawn on Canara Bank , Yelahanka Branch, Bangalore. The complainant has presented the said cheque for encashment through his banker. The said cheque was returned unpaid with an endorsement "Funds Insufficient" on 18-02- 2019. Thereafter, the complainant has got issued demand notice on 20-02-2019 to the accused by demanding the payment of cheque amount. The accused has intentionally evaded the service of notice. Despite of the notice she has not paid the cheque amount within 15 days, which gave raise cause of action to file this complaint.
09. To substantiate his case, the complainant has stepped into witness box and examined as PW.1 and got marked Ex.P-1 to Ex.P-
7. The Complainant in his evidence has narrated contents of complaint and stated that accused has obtained hand loan of Rs.2,00,000/- and got issued a cheque question, which on 7 Judgment C.C.15110/2019 presentation to the bank came to be dishonoured for the reasons 'funds insufficient'. Pursuant to which the complainant got issued a legal notice on 20-02-2019. Despite of the notice the accused has not paid the cheque amount thereby she has committed offence under section 138 of NI Act.
10. In this scenario, let me scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 is cheque dated 15-2-2019 the said cheque was returned with an endorsement "Funds Insufficient" as per Ex.P.2 bank endorsement dated 18.02.2019. Ex.P.3 is legal notice dated 20-02-2019, Ex.P.4 is postal receipt, Ex.P.5 & 6 are unserved Postal covers and Ex.P.7 is On Demand Promissory Note and Consideration Receipt. This complaint came to be filed on 03-04-2019. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act is complied with and the complaint is filed within time. Thus, complainant is entitle to relied on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act. Section 118 reads as here: - "That every 8 Judgment C.C.15110/2019 negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration". Further Section 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here: - "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, or any debt or other liability." A combined reading of above said sections raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability.
11. No doubt, the said presumptions of law are rebuttable in nature. The accused can take probable defence in the scale of preponderance of probability to rebut the presumption available to the complainant. Let me examine whether accused has successfully rebutted the said presumption of law. The accused has specifically denied the availing of hand loan of Rs.2 lakhs from the complainant and issuance of cheque in question for repayment of the said alleged 9 Judgment C.C.15110/2019 loan amount. She putforth her defence that she has borrowed only Rs.50,000/- from the complainant. At the time of borrowing of said loan she has handed over one blank cheque and Demand promissory note for security of the said loan amount. Towards repayment of the said loan amount she has transferred Rs.30,000/- to the complainant's account on various dates and remaining amount was paid by cash to the complainant. But the complainant has not retuned security cheque and DP Note and by misusing the said cheque and DP note he has filed present false case. As such the cheque in question is not supported by any consideration. Hence Section 138 of NI Act is not at all attracted.
12. In this back drop of the rival contention, this court has given anxious consideration to the materials available on record and the submission made by both side. At the outset, it is pertinent to state here that in the cross-examination of PW1, the defence counsel has suggested that while borrowing loan of Rs.50,000/- the accused has given one blank cheque and one DP note as security of the said loan amount. But during the cross-examination the accused has denied her signature in the cheque. Ordinarily nobody would obtain blank 10 Judgment C.C.15110/2019 unsigned cheque for security of the loan. Usually they would obtain signed blank cheque for security. Therefore contention of the accused that she has issued blank unsigned cheque for security is not probable one. Furthermore on comparison of signatures of accused in vakalath, 313 statement and plea with the disputed signature in cheque it appears that prima facie there is no deference at all. Though the accused has disputed her signature in cheque, she has not filed any application for reference of signatures to handwriting expert to give his opinion. Even the accused has not produced any admitted signatures of an undisputed point of time for comparison. This aspect shows that the accused has not seriously disputed the signature in the cheque and for the sake of denial she denied her signature. From the above facts it is establish that signature found in the cheque belongs to the accused only.
13. Once it is established that the signature found in the cheque is belongs to accused the presumption envisaged under section 118 read with section 139 of NI Act, would operate in favour of the complainant. The said provisions lays down a special rule of evidence applicable to negotiate instruments. The presumption is 11 Judgment C.C.15110/2019 one of law and thereunder cover shall presume that the instrument was endorsed for consideration. So also, in the absence of contrary evidence on behalf of the accused, the presumption under section 118 and 139 of NI Act goes in favour of the complainant. No doubt, the said statutory presumptions are rebuttable in nature. It is for the accused to place cogent and probable defence to rebut the presumption raised in favour of the complainant.
14. As discussed above, when the complainant has relied upon the statutory presumption enshrined under section 118 read with section 139 of NI Act, it is for the accused to rebut the said presumption with cogent and convincing evidence. To put it other way, the burden lies upon the accused to prove that Ex.P.1 cheque was not issued for discharge of any debt, but the complainant has obtained the same for security while lending amount of Rs.50,000/- and misused it to extract money illegally. It is worth to note that, section 106 of the Indian Evidence Act postulates that, the burden is on the accused to establish the fact which is especially within his special knowledge. This provision is exception to the General Rule that, the burden of proof is always on the prosecution to establish 12 Judgment C.C.15110/2019 their case beyond all reasonable doubt. In that view of the matter, the burden is on the accused to prove that the cheque in question is not supported by any consideration as such section 138 of NI Act is not attracted at all. To discharge the said burden the accused has fully cross-examined PW1 and also led defence evidence by examining herself as DW1. In the support of her oral testimony she has produced Ex.D.1 bank statement. During her chief examination she has reiterated her entire defence.
15. It is the specific case of the complainant that his wife and the accused were working as teacher in the same place. On such acquaintance the accused approached him and request for hand loan of Rs.2,00,000/- for her son's marriage. Considering her request, on 23-02-2018 the complainant has paid Rs.50,000/- to the accused by way of account transfer. Further he paid Rs.50,000/- on 28-02-2018 and Rs. 1,00,000/- on 03-03-2018 to the accused by way of cash. The complainant also contended that on 03-03-2018 while receiving Rs.1,00,000/- the accused has executed On Demand Promissory Note as per Ex.P7. For repayment of the loan amount the accused 13 Judgment C.C.15110/2019 has issued cheque in question. The said cheque returned unpaid for the reason funds insufficient in the account of the accused.
16. There is no dispute regarding payment of Rs.50,000/- to the accused by way of account transfer. But the accused has specifically denied the receipt of Rs.1,50,000/- from the complainant. Regarding lending of loan of Rs.2 lakhs to the accused, the complainant has produced Ex.P7 demand promissory note alleged to have been executed by accused on 03-03-2018. The accused has denied the execution of said DP note for consideration of Rs.2,00,000/-. She has contended that blank DP note was given while borrowing loan of Rs.50,000/-. Except the said promissory note the complainant has not produced any other document. Even he has not produced any document to show how he has arranged Rs.1,50,000/- during the relevant point of time. The complainant being bank attender had very good knowledge about bank transaction, inspite of the same he claims that he paid Rs.1,50,000/- by way of cash, which is difficult to believe it. On the other hand the accused has contended that she has borrowed only Rs.50,000/- from the complainant and repaid the said amount by way of bank transfers and cash. In support of her contention she has produced her bank statement marked at Ex.D1.
14 Judgment C.C.15110/2019 The entries of the said bank statement establishes that the accused has paid Rs.30,000/- to the complainant by way of account transfer on various dates. The accused contended that she has paid remaining amount by way of cash. During the cross-examination, the complainant has admitted the receipt of Rs.30,000/- from the accused, but he contended that the accused has borrowed some other loan from him and she repaid the said amount through account transfer. He has not specified said loan amount and when exactly the accused has borrowed and how much amount has been repaid in respect of said loan amount. The said explanation of the complainant is not a satisfactory one. In the facts and circumstance of the case which creates serious doubts on the complainant case.
17. Therefore, merely because complaint is filed by complainant based on the negotiable instrument, the cheque herein, which has been handed over accused as security, will not by itself become proof of the duly executable negotiable instrument for discharge towards debt or legal liability. Therefore, there is a presumption, which is rebuttable and the same is rebutted by the accused. It is important to note that as soon as the complainant discharges the 15 Judgment C.C.15110/2019 essential ingredients as contemplated in proviso (a) to (c) of section 138 of NI Act, the presumption is in favour of complainant and burden shifts on accused to rebut and prove the same to the contrary. The burden is on the accused to rebut the same that cheque was available to complainant as a holder in due course was not issued for consideration and neither was it in discharge of any debt or legal liability. It is to be understood that the presumption is not by itself evidence but it only make prima facie case to the parties in whose favour it exists. In the present case complainant has not been able to establish before Court by cogent evidence or his pleadings with regard to lending of amount of Rs.2,00,000/-. On the contrary accused has put the ball in the court of complainant with clear and specific defence that she has borrowed only Rs.50,000/- and repaid Rs.30,000/-by way of bank transfer and remaining amount by way of cash. The cheque in question was issued for security of the said loan amount of Rs.50,000/- and same has been misused for ulterior gain. Therefore, the accused has raised probable defence. Considering all these material evidence and documents produced, this court is of the opinion that complainant has miserably failed to establish that there is an existing debt or subsisting legal liability as 16 Judgment C.C.15110/2019 against accused for Rs.2,00,000/- and that the cheque was issued in favour of complainant for legally recoverable debt. Once the rebuttal of presumption and preponderance of probability has been established by accused in the course of trial, the onus shift back on the complainant to prove his financial capacity and grant of loan to prove legally subsisting liability for which accused had issued the cheque. In the case on hand, complainant has been unsuccessful to prove that he had capacity to pay and has failed to produce any material document to show that he has paid the loan amount of Rs.2,00,000/- to the accused, for which accused had issued the cheque towards discharge of any legally subsisting liability.
18. In view of aforesaid reasons and material relied on by the parties and on perusal of records, this Court is of the opinion that there is no sufficient material produced by the complainant and he has not made any ground to convict accused for the offence punishable under section 138 of NI Act, in other words, accused has satisfactorily raised probable defence and has established by all material documents that complainant has failed to prove the 17 Judgment C.C.15110/2019 existence of any legal debt or subsisting liability. Hence, this point No.1 under consideration is answered in the Negative.
19. POINT NO.2:- In view of above said reasons the allegation levelled against the accused is not proved beyond reasonable doubts. Accordingly, this court proceeds to pass following;
ORDER Acting under Section 255(1) of Cr.P.C., accused is acquitted of the offence punishable under Section 138 of Negotiable Instruments Act.
Bail bond of accused stand cancelled.
(Directly dictated to the Stenographer on computer, typed by her, corrected by me and then judgment pronounced in the open court on this the 10th day of June 2022).
(MANJUNATHA M.S.) XVIII A.C.M.M.,BANGALORE ANNEXURE I. List of witnesses on behalf of complainant:
P.W.1: Sri.C.S.Achar II. List of documents on behalf of complainant:
Ex.P-1 : Original Cheque.
Ex.P-2 : Bank memo.
18 Judgment C.C.15110/2019
Ex.P-3 : Legal notice.
Ex.P-4 : Postal receipts.
Ex.P-5 & 6 : Unserved Postal covers
Ex.P-7 : On Demand Promissory Note
III. List of witnesses for the accused:
D.W.1: Smt.H.S.Bharathi
IV. List of documents for accused:Nil
Ex.D1 : Bank statement
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE
Digitally signed
by
MANJUNATHA
MANJUNATHA M S
MS
Date:
2022.06.10
17:18:05 +0530