Bangalore District Court
Sri Srinivasa vs Smt. Shylaja on 12 March, 2024
KABC020338812021
IN THE COURT OF ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY.
SCCH6
Present: Smt. Chetana S.F.
B.A., L.L.B.,
IV Addl., Small Cause Judge &
ACMM, Court of Small Causes,
BENGALURU.
CC. No. 11871/2021
DATED THIS THE 12th DAY OF MARCH 2024
COMPLAINANT Sri.Srinivasa
S/o Krishnappa
Aged about 32 years
C/o police Prakasha home
No.84, 4th cross
Indiranagara, Bidadi
Ramanagara District562 109.
(By Sri.D.DhananjayaAdvocate)
Vs
ACCUSED Smt.Shylaja
W/o V.Nagendra
Aged about 40 years
# 436, Near Sri.Rama temple
New Thippasandra,
Nellorepuram
Bangalore north560 075.
(Sri.Yashas KAdvocate)
SCCH-6 2 CC NO.11871 OF 2021
: J U D G M E N T :
This is a complaint filed by the complainant U/Sec. 200 of
Cr.P.C. for the offense punishable under Sec.138 of N.I. Act as
against the accused praying to punish the accused for the said
offence.
2. The case of the complainant is that, accused
approached to complainant in the first week of October 2020 for
hand loan of Rs.5 lakh for urgent family commitments and
complainant make arrange of Rs.4,50,000/ on 15112020 as
hand loan to the accused. It is further stated that accused
postponing and not paid either debt amount or interest form
the beginning. Further accused issued a post dated cheque
bearing No.849107 dt.2872021 for Rs.4,50,000/ drawn on
SBI, Vasantha nagara branch, site No.17, ground floor, 1 st
main, Vasantha nagara main road, Bangalore Urban560 052 in
favour of the complainant towards discharge of her legal
liability. The complainant presented the said cheque issued
by the accused with his banker, but the said cheque was
SCCH-6 3 CC NO.11871 OF 2021
returned with an endorsement "Funds Insufficient" by his
banker on 2872021. The Complainant got issued legal notice
on 282021 through registered post acknowledgment to the
accused and the said notice served on the accused on 782021
and other subsequent dates and the acknowledgments are
returned to sender on 782021. Accordingly, the accused has
committed an offence punishable under Sec.138 of N.I Act.
Hence, this complaint.
3. After recording the sworn statement of the
complainant and also verifying the documents, cognizance was
taken against the accused for the offence punishable under Sec.
138 of N.I. Act. The accused on receiving the summons
appeared before this Court through her counsel and she
enlarged on bail and her plea was recorded. The accused
pleaded not guilty and claimed to be tried. Hence, the case was
posted for evidence of the complainant.
4. The complainant got examined himself as PW.1 and got
marked 8 documents as Exs.P1 to 8. Then, the case was posted
SCCH-6 4 CC NO.11871 OF 2021
for recording the statement of accused under Sec.313 Cr.P.C. In
the statement U/s 313 Cr.P.C., the accused has denied all the
incriminating evidence appearing against her and claimed to be
tried. The accused got examined herself as DW1, but no
documents marked.
5. Heard the arguments of both side and Perused the
records.
6. The learned counsel for the complainant filed citations
1.AIR 2023 Supreme court 5018Rajesh Jain Vs Ajay Singh
2. AIR 2001 Supreme Court 2895K.N.Beena Vs Muniyappan and another
3. AIR 2019 Supreme Court 1876 Rohitbhai Jivanlal patel Vs State of Gujarath and another
4. AIR 2010 Supreme court 1898Rangappa Vs Mohan
5. AIR 2019 Supreme Court 2446Bir Singh Vs Mukesh Kumar
6. AIR 2018 Supreme Court 3173Krishan Rao Vs Shankargouda SCCH-6 5 CC NO.11871 OF 2021
7. The following points arise for my consideration:
1. Whether the complainant proves that the cheque bearing No.849107 dt.2872021 for Rs.4,50,000/ drawn on SBI, Vasantha nagara branch, site No.17, ground floor, 1 st main, Vasantha nagara main road, Bangalore Urban560 052 issued by the accused has been dishonored on the ground of 'Funds Insufficient' and even after receiving the intimation regarding the dishonor of cheque failed to pay the cheque amount within the stipulated period and thereby the accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
8. My findings on the above points are as under
Point No.1: In the Affirmative Point No.2: As per final order for the following:
: R E A S O N S :
9. POINT NO.1: In view of the present legal position as held by our Hon'ble High Court as well as Apex Court of India in a catena of decisions as well as relevant provisions of the Act, this court has to see whether the complainant has SCCH-6 6 CC NO.11871 OF 2021 complied all the requirements as contained in Sec.138 of NI Act so as to bring home the guilt of the accused for the alleged offence. If so, whether the accused is able to rebut the legal presumption available to the complainant under Sec.139 of the Act by adducing probable defense or not. However, it is held by the full bench of our Apex Court in the case of Rangappa Vs. Mohan reported in 2010 (1) DCR 706 that;
"The Statutory presumption mandated by sec.139 of the Act, does indeed include the existence of a legally enforceable debt or liability. However, the presumption U/S 139 of the Act is in the nature of a rebuttable presumption and it is open for the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested".
10. Therefore, in view of the above decision, once the cheque is admitted, the statutory presumption would automatically fall in favour of the complainant that, the alleged cheque was issued for discharge of an existing legally SCCH-6 7 CC NO.11871 OF 2021 enforceable debt or liability against the accused and the burden will shift on to the accused to rebut the same.
INGREDIENTS OF OFFENCE AND DISCUSSION
11. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence: First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
SCCH-6 8 CC NO.11871 OF 2021Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
APPRECIATION OF EVIDENCE SCCH-6 9 CC NO.11871 OF 2021
12. The accused can only be held guilty of the offence under Section 138 NI Act if the abovementioned ingredients are proved by the complainant coextensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled. Notably, there is no dispute at bar about the proof of only first, third, and fifth ingredient. The complainant had proved the original cheques vide Ex.P.1 and 2 which the accused person had not disputed as being drawn on the account of the accused. It was not disputed that the cheque in question was presented within its validity period. The cheque in question was returned unpaid vide return memo dated 287 2021 vide Ex.P.2 due to the reason, "Funds Insufficient". The complainant had proved the service of legal demand notice dated 282021 vide Ex.P4 by bringing on record the postal receipt vide Ex.P5 and 6. However, the accused persons has not denied the receipt of the legal notice and postal acknowledgment at ExP7 and postal cover at ExP8. Thus, there is a dispute with regard to the fifth ingredient to the SCCH-6 10 CC NO.11871 OF 2021 offence. As such, the first, third, fourth and fifth ingredient of the offence under section 138 of the NI Act stands proved.
13. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debtor any liability. In the present case, the issuance of the cheque in question is not denied. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumption are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
14. The combined effect of these two provisions is a presumption that the cheque is drawn for consideration and given by the accused for the discharge of debt or other liability. SCCH-6 11 CC NO.11871 OF 2021 Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
15. Further, it has been held by a threejudge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner: 25.1. Once the SCCH-6 12 CC NO.11871 OF 2021 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 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 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.SCCH-6 13 CC NO.11871 OF 2021
25.5. It is not necessary for the accused to come in the witness box to support his defence."
16. The presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. In this case, the arguments raised by the Ld. counsel for the accused to rebut the presumption are discussed below:
First defence Financial capacity
17. Accused has taken specific defense that complainant has no financial capacity to lend the loan to the accused. In this regard counsel for the accused cross examined PW1 at length wherein it was suggested to PW1 with regard to his occupation, income and his expenditure for which PW1 clearly stated that he was running Amazon mini stores from 2021 and at the time of transaction PW1 was working as Runner in Sell Apparels and drawing salary of Rs.16,000/ to Rs.18,000/ and including all perks he would get Rs.32,000/ and after SCCH-6 14 CC NO.11871 OF 2021 deduction he would get Rs.16,000/ to Rs.18,000/ salary. Further PW1 stated that apart from salary he was getting Rs.60,000/ to Rs.90,000/ income from landed property per month. It is pertinent to know that all these facts deposed by PW1 in his crossexamination with regard to his occupation, income is not at all denied by accused. As such it can be inferred that accused has admitted those facts. Though PW1 was crossexamined at length, but no where accused counsel denied specifically the financial status capacity of PW1 to lend amount of Rs.4,50,000/ to the accused. At least by way of putting single suggestion.
18. Further though it was questioned that PW1 can produce salary slip and income tax but when accused has not all denied specifically about the occupation, salary and income of PW1 and the question of disproving contention of accused or proving of financial capacity does not arise at all.
19. Apart from this accused himself in his crossexamination admitted that prior to the present transaction, accused used to SCCH-6 15 CC NO.11871 OF 2021 borrow the loan of Rs.5,000/, Rs.10,000/, Rs.20,000/ from the complainant and repay the same. Thus, it clearly establishes that there was several loan transaction between complainant and accused and accused used to borrow the loan from the PW1 on several times. Thus accused by putting the above suggestion has admitted that complainant has having the sufficient financial capacity. In view of the above facts and circumstances it can be concluded that complainant has sufficient financial capacity.
Second defense Cheque was forged.
20. Further accused has taken the contention that she has not put the signature in the ExP1cheque and said signature has been forged by the complainant. In this regard, PW1 denied the suggestion that the handwriting in the cheque is in different inks and handwriting. If for the sake of the arguments, the contention of the accused is believed as a gospel truth. Then a genuine question arises in the minds of the court that if the signature in the ExP1 cheque is not the signature of SCCH-6 16 CC NO.11871 OF 2021 the accused and it was forged certainly, the bank for which the said cheque has been presented would have issued the endorsement as signature differs. But in the present case as per ExP3 bank endorsement, no such endorsement has been given by the bank. Certainly before passing the cheque, the bank officials would verify the signatures in the cheque with that of the specimen signatures of the drawer or the account holder available in bank.
21. Apart from this, though accused has taken the contention that the signature in the cheque is not his signature and it has been forged but has not made any attempts to prove the same and not taken any steps to prove his contention. Mere allegation would not be satisfy to ascertain that the signature in the cheque was forged. The defence of the accused that the signature in the cheque and every contents has been forged has to be proved by leading direct and corroborating evidence which is conspeciously missing in the present case. Under SCCH-6 17 CC NO.11871 OF 2021 such circumstances, the contention of the accused are not worth of acceptance.
Third Defense : No debt exists and the cheque in question was issued as a security and not in discharge of any legally recoverable debt.
22. Further Accused has taken specific defence that in the year 2021 accused has borrowed the loan of Rs.5,000/ from the complainant and at that time she has issued the blank cheque as a security for the said loan and even after the repayment of the said Rs.5,000/ complainant has not returned the said cheque inspite of the request and has misused the said cheque and filed this false case.
23. But accused himself in his evidence stated that he has borrowed Rs.5,000/ and given the cheque to the complainant and he has not repaid Rs.5000/ and when complainant has called him, he has stated that he would repay the said amount, and inspite of his requisition, complainant has filed this case. Thus accused has taken contrary defences. during the cross SCCH-6 18 CC NO.11871 OF 2021 examination of the PW1, accused has taken the contention that he has repaid Rs.5,000/ and inspite of repayment of the said amount, complainant has not returned the cheque, but during the evidence of the DW1, DW1 admitted that he has not repaid the said Rs.5,000/ and inspite of his request, complainant has filed the complaint against him. As such the defence taken by the accused cannot be believable.
24. Apart from this, though accused has denied the service of the notice. As per ExP7 acknowledgment, the notice has been duly served to the accused and as per ExP8 returned postal cover postman has put the shara as 'door lock' 'intimation served' and 'unclaimed'. As such it can be considered that the notice has been duly served to the accused. Moreover accused in her cross examination admitted that the address mentioned in the ExP7 and 8 is her address, when accused has not denied the address mentioned in ExP7 and 8 as per Section 114 (G) of the Evidence Act, it can be presumed that all official acts are duly performed and accordingly it cab SCCH-6 19 CC NO.11871 OF 2021 be presumed that the notice ExP7 and 8 has been duly served to the accused until rebutted.
25. Though accused has taken the defence that the cheque given by her as security has been misused by the complainant, but inspite of service of the notice, why accused has not taken the said defence at an earliest opportunity by giving the reply to the notice. There is no explanations in this regard.
26. Apart from this, accused has admitted that he has not taken any legal action against the complainant for misusing the cheque. If at all as per the version of the accused, ExP1 cheque has been misused and has been forged certainly accused would have taken the legal action against the complainant. But no such legal action has been taken by the accused.
27. Further as per the version of the accused, accused was having the knowledge about the possession of her cheque in the hands of the PW1 When accused was having knowledge about the possession of her cheque in the hands of the PW1 then why accused has not taken any steps or at least issued the SCCH-6 20 CC NO.11871 OF 2021 notice for the return of the her cheque or else have issued the stop payment notice to her bank. In this regard, DW1 has not given any explanation. The very silence on the part of the accused leads to an inference that ExP1 cheque in question has been issued by her to the complainant for the repayment of the legally recoverable debt.
28. In this regard, As held by our Hon'ble High court in the case of Siddappa Vs. Smt. Chand bee Hyderabad Reported in 2014 Cr.R 646 (kant)," mere suggestion will not take place of proof even by means of preponderance of probabilities and something more is required to rebut the presumption ".
29. Apart from this, when accused was having knowledge about the possession of his cheques with the complainant then, why accused has not taken any steps or legal action against the complainant for misusing of the cheque and for return of his cheques. There is no explanation in this regard given by the accused.
SCCH-6 21 CC NO.11871 OF 2021
30. In this regard it is pertinent to note the principle held in Sri.Prakash @ Jnana Prakash v/s Miss T.S. Susheela reported in ILR 2012 KAR 4815 our Hon'ble High Court has held that If the documents had been illegally obtained by the complainant, it is inexplicable that the petitioner did not choose to give a complaint to the police or to take other measures insofar as that conduct of the complainant is concerned and hence has disbelieved the evidence set forth
31. Applying the ratio laid down by the Hon'ble Court to the present case on hand, the accused in this case also has not taken up any legal measures against complainant regarding possession of cheque and even not given any stop payment intimation to his bank. From this an inference can be drawn that no prudent man will keep himself silent without taking any steps to safeguard his interest when his document lies with the possession of other party.
SCCH-6 22 CC NO.11871 OF 2021
32. Apart from this accused has not taken the said defence earlier by giving the reply to the notice at the earlier opportunity.
33. Further, the accused has not taken this defence at the earliest stage by issuing the reply notice or taken any criminal proceedings against the complainant. In the absence of any such recourse being adopted by the accused, it is highly impossible to believe his defence. The Hon'ble Apext Court in the case of Rangappa Vs. Mohan Reported in 2010 (1) DCR 706, wherein it was held as fallows:
"Very fact that the accused had failed to reply to the statutory notice under Sec.138 of N.I.Act leads to inference that there was merit in the complainant's version".
34. In the present case also the accused inspite of the service of the notice has not replied to the notice and taken the defence at the later stage only for the sake of the defence. That, being the true facts it can be held that, the accused has failed to establish his defence.
SCCH-6 23 CC NO.11871 OF 2021
35. In view of all the above discussions, it can be concluded that the complainant has established through cogent and convincing evidence the fact of issuance of the cheque for discharge of legality enforceable debt, which is dishonored for want of sufficient funds, Issuance of legal notice within stipulated time, failure on the part of Accused to repay the amount within stipulated period. On the other hand, the accused has failed to rebut the presumption available to the complainant through probable evidences that would preponderate upon the evidence lead by the complainant. Therefore, the accused is held to have committed an offence punishable under Sec. 138 of N.I. Act. Accordingly Point No.1 is answered in the Affirmative.
36. POINT NO.2: In view of my answer to point No.1, I proceed to pass the following: : O R D E R : Acting U/Sec.255(2) of Cr.P.C. accused is hereby convicted for the offence SCCH-6 24 CC NO.11871 OF 2021 punishable U/Sec.138 of Negotiable Instruments Act.
Accused is sentenced to pay a fine of Rs.4,55,000/ for the offence punishable under section 138 of N.I.Act. The amount of Rs.4,50,000/ shall be paid to the complainant by way of compensation in accordance with Sec.357(1) of Cr.P.C.
within three months from today.
The remaining amount of Rs.5,000/ shall be confiscated to the state. In default of payment of fine, the accused shall undergo simple imprisonment for a period of six months.
The bail and surety bond of the accused and surety shall stand canceled. Office to furnish the copy of this judgment, free of cost to the accused.
(Dictated to the Stenographer directly on computer, after her typing, corrected, signed and then pronounced by me in open Court this the 12th day of March 2024).
(CHETANA S.F.) IV Addl., Small Cause Judge & ACMM, Court of Small Causes, BENGALURU.
SCCH-6 25 CC NO.11871 OF 2021ANNEXURE List of witnesses examined for the Complainant:
P.W1 - Srinivasa For the accused: DW1 Shylaja
List of documents marked for the Complainant: Ex.P1 - Cheque Ex.P1(a) - Signature of accused Ex.P2 - Bank challan Ex.P3 Bank Endorsement Ex.P4 - Legal notice Ex.P5 and 6 - Postal receipts Ex.P7 - Postal acknowledgment Ex.P8 _ Postal cover For the accused: NIL (CHETANA S.F.) IV Addl., Small Cause Judge & ACMM, Court of Small Causes, BENGALURU.
SCCH-6 26 CC NO.11871 OF 2021