Bangalore District Court
M/S Margadarsi Chits( Karnataka) Pvt. ... vs Sri. S Nandagopal on 10 February, 2025
C.C.NO.2036/2021
0
KABC030071172021
Presented on : 30-01-2021
Registered on : 30-01-2021
Decided on : 10-02-2025
Duration : 4 years, 0 months, 11 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 10th DAY OF FEBRUARY-2025
C.C.NO.2036/2021
Complainant: M/s. Margadarsi Chits (Karnataka)
Pvt.,Ltd., R/o at No.801 & 802, 8th Floor,
South Block, Manipal Center, No.47,
Dickenson Road, Bangalore-560042.
R/by its Manager/Foreman
Sri.H.T.Nagaraj.
As per the order dated: 03.08.2024
Complainant company
R/by its Manager /Foreman
Sri.N.Thyagarajulu S/o Muniswamy.
(By Sri.G.M.Gadilingappa.,Adv.,)
V/s
Accused: Sri.S.Nandagopal S/o G.Shivaram,
Age: 45 years, Durwan Geological
Survey of India, Remote Sensing &
Aerial Survey, Vasudha Bhavan,
K.S.Layout, Bengaluru-560078.
And also R/at No.213, 21st Block,
C.C.NO.2036/2021
1
CPWD Quarters, Koramangala,
Bengaluru-560034.
(By Sri.N.Suresh Kumar.,Adv.,)
:JUDGMENT:
This case arises out of the private complaint filed under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant is a chit company registered under the companies act and having its registered office at above said address mentioned in the cause title and a branch office at Peenya, amongst other branches in Bangalore which is a part of Ramoji Group of companies and they are in the business promoting and conducting of chits as per the provisions of the chit funds Act. Further one Smt.B.B.Kavitha W/o Channakeshavalu is a subscriber for a chit No.LT005T PN 48 for a chit value of Rs.5,00,000/- which is at the rate of Rs.10,000/- p.m over a period of 50 months. The said subscriber has participated in the chit auction and was declared as the prize bidder and she has received the prize money of Rs.3,25,000/- after deducting the bid amount on 13.02.2016. The accused along with other guarantors executed an on demand promissory note, surety form, guarantee bond and other relevant documents. After receiving the prize amount the subscriber was not C.C.NO.2036/2021 2 regular in payment of the chit installments, further she has paid 26 installments, and thereafter she became a defaulter. Since the accused failed to make payment the complainant company was forced to issue a legal notice to the subscriber and other guarantors along with this accused. Thereafter the complainant has filed a Dispute before the Registrar of chits at Bangalore in Dispute No.DRB-/1/FZ/CFS/47/2018-19 for recovery of Rs.3,09,596/- which is still pending for adjudication.
During the pendency of the said proceedings, the accused has approached the complainant and expressed willingness to settle dispute wherein after due calculation of statement of accounts, the accused had issued the cheque No.830793 dated: 30.09.2018 for Rs.3,44,000/- drawn on UCO Bank Banashankari Branch, Bangalore. The complainant had presented the said cheque for realization through its banker Dhanalaxmi Bank, Bengaluru. But the said cheque was dishonored on 30.09.2018 as "Funds Insufficient". Thereafter on 23.10.2018 the complainant got issued a legal notice to the accused through its counsel calling upon him to pay the cheque amount. The said notice was duly served to the accused on 31.10.2018. After service of the notice, the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 07.12.2018 C.C.NO.2036/2021 3
3. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as PCR No.6890/2019. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 30.01.2021 to register the case in Register No.III.
4. Thereafter, summons was issued to the accused and he has appeared before the court through counsel and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. The complainant in support of its case, have examined its Manager as PW.1 and got marked 17 documents at Ex.P.1 to 17 and closed its side.
6. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C., was recorded. He has denied the incriminating evidence appearing against him. In his defence the accused examined himself as DW.1 and one document was marked at Ex.D.1.
7. I have heard the arguments on both the sides and also perused the material placed on record.
8. Upon hearing the arguments and on perusal of C.C.NO.2036/2021 4 the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-Ex.P.12, towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.12 was dishonored for the reason "Funds Insufficient" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5.What order?
9. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
10. POINT NO.1 AND 2: These points are inter- related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken both points together for common discussion. The case of the complainant is that he was acquainted with the C.C.NO.2036/2021 5 accused. The complainant is a chit company and they are in the business promoting and conducting of chits as per the provisions of the chit funds Act. Further one Smt.B.B.Kavitha W/o Channakeshavalu is a subscriber for a chit No.LT005T PN-48 for a chit value of Rs.5,00,000/- which is at the rate of Rs.10,000/- p.m over a period of 50 months. The said subscriber has participated in the chit auction and was declared as the prize bidder and she has received the prize money of Rs.3,25,000/- after deducting the bid amount. The accused along with other guarantors executed an on demand promissory note, surety form, guarantee bond and other relevant documents. After receiving the prize amount the subscriber was not regular in payment of the chit installments, further she has paid 26 installments, and thereafter she became a defaulter. Since the accused failed to make payment the complainant company was forced to issue a legal notice to the subscriber and other guarantors along with this accused. Thereafter the complainant has filed a Dispute before the Registrar of chits at Bangalore for recovery amount which is still pending for adjudication. Further during the pendency of the said proceedings, the accused has approached the complainant and expressed willingness to settle the dispute. Hence, the accused had issued the cheque in question. The complainant had presented the said cheque for realization through its banker. But the said cheque was C.C.NO.2036/2021 6 dishonored as "Funds Insufficient". Thereafter the complainant got issued a legal notice to the accused through its counsel calling upon him to pay the cheque amount. Inspite of receipt of the legal notice, the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
11. In support of the case, the complainant's have examined its Manager as P.W.1 and 17 documents were marked at Ex.P.1 to 17. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the Resolution. Ex.P.2 is the Authorization letter. Ex.P.3 is the sanction order issued by the Deputy Registrar of chits. Ex.P.4 is the chit commencement certificate. Ex.P.5 is the chit agreement. Ex.P.6 is the On-demand promissory note. Ex.P.7 is the account statement. Ex.P.8 is the acknowledgment. Ex.P.9 is the guarantee agreement. Ex.P.10 is the surety bond. Ex.P.11 is the Voucher. Ex.P.12 is the cheque issued by the accused in favour of the complainant dated: 30.09.2018 for Rs.3,44,000/-. Ex.P.12(a) is the signature of the accused. Ex.P.13 is the bank memo dated: 04.10.2018 informing the dishonor of the cheque as "Funds Insufficient". Ex.P.14 is the office copy of legal notice dated: 23.10.2018. Ex.P.14(a) and 14(b) are the postal receipts. Ex.P.15 C.C.NO.2036/2021 7 and 16 are the postal acknowledgments. Ex.P.17 is the Complaint.
12. In order to prove his defence, the accused examined himself as DW.1 by way of affidavit and one document was marked at Ex.D.1. In his chief examination affidavit D.W.1 has repeated the defence taken by him. Ex.D.1 is the certified copy of the order sheet in Execution No.920/2019.
13. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that one Smt.B.B.Kavitha is a subscriber for a chit bearing No.LT005T, PN-48 for a chit value of Rs.5,00,000/- which is payable at the rate of Rs.10,000/- p.m., over a period of 50 months. Further argued that the subscriber had participated in the chit auction and she was declared as a prize bidder. Thereafter, she has received the prize money of Rs.3,25,000/- after deducting the bid amount. Further argued that the accused is one of the guarantor to the subscriber. The accused along with other guarantors had executed an ondemand promissory note, surety form, guarantee bond and other documents as per Ex.P.6, 8 to 11. Further argued that after receiving the prize amount the C.C.NO.2036/2021 8 said subscriber was not regular in payment of the chit installments and she has paid only 26 installments and thereafter she became a defaulter. Since the accused, subscriber and other guarantors have failed to make payment, hence the complainant was forced to issue a legal notice to them. Thereafter, the complainant has filed a dispute before the registrar of chits at Bangalore for recovery of Rs.3,09,596/-. It is further argued that the above said proceedings was going on, at that time the accused has approached the complainant and expressed willingness to settle the dispute. After calculation of statement, the accused had issued the cheque-Ex.P.12 in favour of the complainant. Further argued that the accused has not denied Ex.P.12 being his drawn on his account. When the signature is not seriously disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the evidence of the said witness. The defence have failed to rebut the presumption under section 139 N.I.Act.
14. It is further argued that the accused has failed to produce any believable evidence that cheque in question issued only for the purpose of security in the year 2016. Further argued that under section 139 of N.I.Act, there is a presumption that the cheque has been issued for discharge of legally enforceable C.C.NO.2036/2021 9 debt/liability. In the present case, the accused has not disputed Ex.P.12 being his cheque drawn on his account. The said presumption is available to the complainant. Further argued that the accused has failed to prove the very fact that the cheque was misused by the complainant and filed this false case against him. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that he had issued the blank cheque to the complainant at the time of receiving the chit amount by the Smt.B.B.Kavitha as a security. As such, very defence of the accused is not believable.
15. It is further argued that the complainant issued a legal notice to the accused through RPAD calling upon him to pay the cheque amount. After service of legal notice the accused neither reply to the notice nor paid the cheque amount. Hence, the complainant have filed this case before this court. It is further argued that the complainant have examined the Manager as PW.1 and 17 documents were marked at Ex.P.1 to 17. PW.1 was fully cross examined by the accused lengthy, but nothing has been elicited in the mouth of PW.1. In the C.C.NO.2036/2021 10 statement U/s. 313 of Cr.P.C the accused has denied all charges made against him. The accused adduced the evidence and not produced any relevant documents except Ex.D.1. The complainant prove the case on beyond doubt that the accused is one of the guarantor to the Smt.B.B.Kavitha for that the complainant produced the surety proposal form, on-demand, guarantee agreement as Ex.P.6, 8 to 11 respectively. It is further argued that the accused himself has signed and delivered the cheque in favour of the complainant company on repayment of chit installments due. After dishonor of the cheque the complainant issued legal notice to the accused, inspite of this accused has not taken any legal action nor produced any documents before this court to disprove the same. Further the accused taken a strange defence that he had issued the blank cheque in favour of the complainant for the purpose of security in the year 2016. Further the accused admitted that he was guarantor to the aforesaid subscriber. Hence, the complainant proved the case to in all the ingredients of section 138 of N.I.Act. Further the complainant proved that there was a legal due amount standing as on the date of the issue of the cheque. Hence, he prays to convict the accused.
16. The learned counsel for the accused has argued that there was no any legally enforceable debt or liability to the complainant from the accused for C.C.NO.2036/2021 11 which the cheque was issued. Further argued that the accused had issued the blank cheque to the complainant for the purpose of security in the year 2016. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of a legally enforceable debt/liability, for which the cheque came to be issued. The complainant created all the documents and filed this false complaint against the accused. Further argued that the cheque issued by the accused for the purpose of security as was misused by the complainant. Therefore, from the evidence placed on record, the very due amount from the Smt.B.B.Kavitha is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt.
17. He further argued that one Kavitha has taken the chit amount by executing all necessary documents as prescribed by the complainant company in the year 2016. The husband of the Kavitha also signed as a guarantor in the said chit transaction. The accused is not participated in the said chit and he never became the participant of the chit amount and he never involved in the said chit transactions. However, the complainant company has demanded chit bidder while collecting the chit amount has to offer minimum two Government C.C.NO.2036/2021 12 sureties and two private sureties, apart from the chit bidder and her husband. Further argued that the accused is a Government employee have collected promissory note, one signed blank cheque, surety form, guarantee bond and other relevant documents and distributed the chit amount to Kavitha. Further argued that the complainant company has also collected blank cheques from Kavitha, her husband, and also from other guarantors for security purpose. Since the Kavitha became the defaulter in paying the chit installments, the complainant company has deposited the blank signed cheque belongs to the accused was in their custody have filled by them and presented for payment and same was dishonored. Further argued that the said blank cheque was issued by the accused in the year 2016 for security purpose and the accused never issued the cheque on 30.09.2018 as alleged by the complainant.
18. Further argued that except the signature, other contents were filled by the complainant company and the accused not written the contents in his handwriting. Further argued that while comparing the impression of the ink while signing the signature and other contents in the cheque varies. Further argued that the other documents marked before this court also signed by the Kavitha while taking the bid amount, the accused has not taken the bid amount along with C.C.NO.2036/2021 13 Kavitha and he only stood as guarantor along with other guarantors. Further argued that apart from this case the complainant company has preferred another case in Execution No.920/2019, wherein the case is pending before Hon'ble ACC and SJ, Bangalore for recovery of the amount. The complainant company unable to trace present address of the Kavitha or her husband, they are trying to attach the salary of the accused and another Government employee salary in the same case. Further argued that the said case is pending for adjudication. Even though the guarantors are liable to pay the amount, the complainant has to take all steps for recovery of the amount from Kavitha in execution case and sole guarantor is not liable to pay the amount. Further argued that since the Execution case is pending for adjudication, the present case is not maintainable and the present case is filed only against the sole guarantor is not maintainable and same is liable to be dismissed.
19. Further argued that the complainant company has to take all steps of recovery of the amount from the person, i.e.,Kavitha who has taken the amount, in case if she is declared insolvent, then the open option to the complainant company to collect the amount from the guarantors equally. Such being the case, the complainant company unable to take serious steps against the subscriber to secure her presence before C.C.NO.2036/2021 14 the court and trying to extract the entire amount from the accused by misusing the blank signed cheque which was given for security while releasing the chit amount in favour of Kavitha during the year 2016. Further argued that during the course of cross examination of PW.1 by the accused counsel, he had clearly admitted the fact that the chit amount is taken by the Kavitha and not the accused. Hence, the point of admission during the course of cross examination itself demonstrate that the accused is innocent of the alleged offence. Further argued that PW.1 during his cross examination further admitted that the accused is not liable to pay the amount as alleged by the complainant. Further admits that the said documents were collected by the complainant during the course of releasing of chit amount to Kavitha as a surety purpose. Further argued that the accused is not legally liable to pay the amount as alleged in the cheque, the complainant company instead of taking steps to recover the amount from Kavitha, they have falsely trying to extract the money from the accused since the accused is a Central Government employee by misusing the signed blank cheque in their custody. Hence, he prays to dismiss the complaint with exemplary cost and acquit the accused.
20. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused C.C.NO.2036/2021 15 has not seriously disputed he had issued the cheque in favour of the complainant. It is not disputed that the complainant is a private limited chit company and the accused is a guarantor to Smt.B.B.Kavitha and he had issued the cheque in favour of the complainant. Whereas, the accused has contended that he had given the signed chaque to the complainant for the purpose of security at the time of receiving the chit amount by the Smt.B.B.Kavitha in the year 2016. When he had given the cheque, which was blank. The accused has specifically denied having debt/liability had issued the cheque dated: 30.09.2018 towards the discharge of any debt/liability. He contends that the blank cheque given by him for the purpose of security as was misused by the complainant and a false complaint was filed.
21. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its Manager as PW.1 and 17 documents were marked at Ex.P.1 to 17. In chief examination P.W.1 has repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.12 being his cheque drawn on his C.C.NO.2036/2021 16 account. The said presumption is available to the complainant.
22. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which cheque was issued. In order to prove his defence, the accused has failed to produce any documentary evidence before this court except Ex.D.1.
23. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case. Further he has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused is that he had given the blank signed cheque to the complainant for the purpose of security. Except, the said defence, he has not produced any materials to prove such defence. If he had given the blank signed cheque to the C.C.NO.2036/2021 17 complainant for the purpose of security in the year 2016, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque. On which date the accused came to knew about the alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is having knowledge of the financial transaction, why he has given the blank signed cheque without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the blank signed cheque. Moreover, immediately after the alleged blank cheque misused by the complainant he has not lodge complaint before concerned police station. No steps have been taken to receive back the blank signed cheque, after he came to know about the same.
24. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act, that the cheque was issued by the drawer for legally payable debt or liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally C.C.NO.2036/2021 18 recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
25. Further the accused has taken defence that the cheque was given to the complainant for the purpose of security in the year 2016. The complainant have misused his cheque. Hence, an offence punishable under section 138 of N.I.Act, is not attracted. In this regard once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act, that cheque was issued by the drawer for legally payable debt/liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court C.C.NO.2036/2021 19 categorically held that; once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, but without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
26. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a C.C.NO.2036/2021 20 probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
27. In the case of Kalamani Tex and another V/s. P.Balasubramanian, reported in (2021) 5 SCC 283, the Hon'ble Supreme Court has observed 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.
28. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
29. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reason stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent C.C.NO.2036/2021 21 of probabilities, the accused has not produced any documents in this regard.
30. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of the blank cheque and filing a false case is not possible. The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said cheque and had not returned the same, inspite of collecting cheque leaves from him, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheque. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.12-cheque. Further he could have issued a notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of security cheque against the complainant. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
31. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment C.C.NO.2036/2021 22 to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.12 being his cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and also cheque return memo-Ex.P.13 it is established that the cheque was dishonor for the reasons "Insufficient Funds'' in the account of the accused. A legal notice being issued as per Ex.P.14 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice send by the complainant on his address. But, the accused failed to reply the notice, immediately after he received the demand notice. Thereby, he could have asserted his defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his address. When the accused has not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
32. It is not the contention of the accused that thereafter he has paid the cheque amount within stipulated time of 15 days on receiving the notice.
C.C.NO.2036/2021 23 Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period and failed to give reply to the notice, as such the accused has committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even he did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In the judgment of the Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, reported in (2010 (5) SCC
590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he want to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
33. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, C.C.NO.2036/2021 24 reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act, cannot be discharged. The principle of law laid-down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
34. The learned counsel for the accused has argued that except signature other writings on the cheque-Ex.P.12 is not in his handwriting, which were filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. When the accused admits his signatures, he cannot take up a defence that other contents of cheque were filled up by the complainant and it amounts to material alteration. In this respect, ruling reported in 2019 SCC On-line (SC) 138), between Bir Singh V/s Mukesh Kumar, the Hon'ble Apex Court held as under:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee C.C.NO.2036/2021 25 remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a 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, if cheque is otherwise valid, the penal provision of Section 138 would be attracted.
38. 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 the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. 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."
35. The principles emerging from the above referred decision make it clear that, it is not mandatory and no law prescribes that the contents of the cheque should be written by the signatory to the cheque. A cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under section 139 of N.I.Act arises. The principle of law laid down in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I.Act, the cheque being an inchoate instrument, if the drawer signs and C.C.NO.2036/2021 26 delivers to the drawee, thereby he gives authority to the drawee thereof to make or complete the instrument.
36. As per the version of the accused is that he has nowhere denied transaction. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that he has issued the cheque-Ex.P.12 and even after he has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. The accused is liable for dishonor of cheque. In case of dishonor of the cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant that the accused had issued the cheque- Ex.P.12 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him. Therefore, the accused has failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
37. PW.1 in his evidence has specifically deposed that one Smt.B.B.Kavitha W/o Channakeshavalu is a C.C.NO.2036/2021 27 subscriber for a chit No.LT005T PN-48 for a chit value of Rs.5,00,000/- which is at the rate of Rs.10,000/- p.m over a period of 50 months. The said subscriber has participated in the chit auction and was declared as the prize bidder and has received the prize money of Rs.3,25,000/- after deducting the bid amount on 13.02.2016. The accused along with other guarantors executed an on demand promissory note, surety form, guarantee bond and other relevant documents, in favour of the complainant company. After receiving the prize amount the subscriber was not regular in payment of the chit installments, further she has paid 26 installments, and thereafter she became a defaulter. Since the accused failed to make payment the complainant company was forced to issue a legal notice to the subscriber and other guarantors along with this accused. Thereafter the complainant has filed a Dispute before the Registrar of chits at Bangalore in Dispute No.DRB-/1/FZ/CFS/47/2018-19 for recovery of Rs.3,09,596/- which is still pending for adjudication. Further deposed that during the pendency of the said proceedings, the accused has approached the complainant and expressed willingness to settle the dispute wherein after due calculation of statement of accounts the accused had issued the cheque in question. The accused has failed to get the tender. Accordingly, the complainant became entitled to receive the said amount from the accused, this is not C.C.NO.2036/2021 28 disputed by the accused. So also it is not in disputed that the complainant and the accused are known to each other, some point of period. Further the accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction and other documents no consequences to disbelieve the case of the complainant. With these reasons, I answer point No.1 and 2 in the Affirmative.
38.POINT NO.3 AND 4: In order to avoid repetition of facts, these points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. Ex.P.12 being his cheque drawn on the account of the accused is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after service of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case if the accused has issued the blank signed cheque in favour of the complainant for the purpose of security in the year 2016 and why he has not produced any documents. After service of notice the accused has not C.C.NO.2036/2021 29 paid the said amount and failed to give reply to the said notice. Hence, the present complaint came to be filed before the court on 07.12.2018 within the period of one month from the date of cause of action.
39. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements under section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
40.POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
C.C.NO.2036/2021 30 :ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.3,50,000/- (Rupees three lakhs fifty thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.3,40,000/- (Rupees three lakhs forty thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of 06 months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 10 th day of February 2025) (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.2036/2021 31 ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.N.Thyagarajulu.
List of documents marked on behalf of the complainant:
Ex.P.1 : Resolution. Ex.P.2 : Authorization letter. Ex.P.3 : Sanction order. Ex.P.4 : Chit commencement. Ex.P.5 : Chit Agreement. Ex.P.6 : Ondemand. Ex.P.7 : Account statement. Ex.P.8 : Acknowledgment. Ex.P.9 : Guarantee Agreement. Ex.P.10 : Surety Bond. Ex.P.11 : Voucher. Ex.P.12 : Cheque. Ex.P.12(a) : Signature of the accused. Ex.P.13 : Bank endorsement. Ex.P.14 : Office copy of legal notice.
Ex.P.14(a) & 14(b) : Postal receipts. Ex.P.15 & 16 : Postal acknowledgments.
Ex.P.17 : Complaint.
List of witnesses examined on behalf of the accused:
DW.1 : Mr.S.Nandagopal.
List of documents marked on behalf of the accused:
Ex.D.1 : Certified copy of the order sheet in execution No.920/2019.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.2036/2021 32 10.02.2025 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.3,50,000/- (Rupees three lakhs fifty thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.3,40,000/- (Rupees three lakhs forty thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of 06 months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.