Bangalore District Court
Santhosh M vs C G K Prasad (Ganesh Prasad ) on 11 March, 2025
KABC010163912022
Presented on : 20-06-2022
Registered on : 20-06-2022
Decided on : 11-03-2025
Duration : 2 years, 8 months, 21 days
IN THE COURT OF LXVI ADDL CITY CIVIL & SESSIONS
JUDGE, BENGALURU CITY (CCH-67)
PRESENT
SHRI. JAYAPRAKASH A.
B.A.L., L.L.M.,
LXVI Addl. City Civil & Sessions Judge,
Bengaluru (CCH-67)
Dated this the 11th day of March, 2025
Crl.Appeal.No.726 of 2022
APPELLANT/S Santhosh.M.
S/o late Mari Gowda,
Aged about 37 years,
R/at No.20, 6th Cross,
Bhuvaneshwari Nagar,
Magadi Road, KP Agrahara,
Bengaluru 560 023.
(By Sri.A.Ramachandra, Advocate)
V/s.
RESPONDENT/s:- CGK Prasad,
(Ganesh Prasad)
S/o late Chikkanna,
Aged aboaut 56 years,
R/at No.2124, "Anjanadhri",
3rd Main Road, III Stage,
RPC Layout, Vijayanagar,
Bengaluru 560 040.
(By Sri.HKP, Advocate)
2
Cri.A.No.726/2022
JUDGMENT
The appellant / accused has filed appeal under section 374(3) of Code of Criminal Procedure challenging the judgment dated 06/06/2022 passed in C.C.No.2639/2019 on the file of IV Additional Small Causes Judge and ACMM (SCCH-6), Bangalore.
2. The appellant is the accused and respondent is the complainant before the trial Court. For the sake of convenience the parties are referred by their ranks before the trial Court.
3. The brief facts of the complainant's case is that the accused approached him for hand loan of Rs.3,50,000/- in the year 2018 for the purpose of purchasing printing machine assuring to return the said amount within short period. The accused had repaid Rs.1,00,000/- to him and towards repayment of balance amount of Rs.2,50,000/- accused had issued five cheques 1) cheque bearing No.017626 2)cheque bearing No. 017628 3) cheque bearing No.017632 4) cheque bearing No.017633 and 5) cheque bearing No.017634 all dated 01/03/2019 for a sum of Rs.50,000/- each drawn on Axis Bank, Rajajinagar Branch, Bengaluru. When the said cheques were presented by the complainant for encashment through his banker The Bangalore City Co-operative Bank Ltd., Vijayanagar, Bengaluru same were dishonoured with shara 'funds insufficient' on 02/03/2019. The complainant issued legal notice dated 14/03/2019 calling upon 3 Cri.A.No.726/2022 the accused to pay the cheques amount. Inspite of receipt of legal notice appellant has not repaid the loan amount but gave evasive reply. Therefore, the complainant has filed the private complaint before the learned Magistrate.
4. The trial Court recorded sworn statement of the complainant by way of affidavit. Thereafter cognizance was taken for the offence punishable under section 138 of N.I.Act and summons was issued to the accused. The accused appeared through his counsel and he has been released on bail. His plea was recorded. He pleaded not guilty and claimed to be tried. The complainant got examined himself as PW1 and got marked 18 documents as Ex.P1 to Ex.P18. The accused was examined under section 313 of Cr.P.C. The accused denied all the incriminating evidence appearing against him. The accused examined himself as DW-1 and got marked Ex.D.1 and D2.
5. After hearing arguments of both sides and considering materials on record, the trial Court passed a judgment of conviction sentencing the accused to pay fine of Rs.2,55,000/- with a direction to pay a sum of Rs.2,50,000/- as compensation to the complainant and in default to undergo simple imprisonment for a period of six months.
4Cri.A.No.726/2022
6. Being aggrieved by the above said judgment the appellant / accused preferred this appeal on the following among other grounds:
(i) The learned trial Court without application of mind has passed the impugned judgment without corroboration by any other evidence.
(ii) The learned trial Court has grossly erred in convicting him on the materials and facts placed before the Court.
(iii) The learned trial Court failed to appreciate the fact that there is no financial transaction between him and the complainant during May and June 2018, but Ex.D.2 invoice clearly discloses that the date of purchase of printing machine is 30/07/2017.
(iv) The learned trial Court failed to appreciate the fact that as per the version of complainant at the time of lending loan amount of Rs.3,50,000/- he has not obtained single document from him but at the time of cross examination PW.1 has admitted that at the time of lending loan he has not obtained the alleged cheques.
Learned trial court failed to appreciate the same.
(v) The learned trial Court has failed to appreciate that as held by the Apex Court it is mandatory that the person who alleges having lent loan to any persons he has to produce the documents like pass book IT returns to show the source for lending such loan. Merely based on issuance of cheques learned Court ought not 5 Cri.A.No.726/2022 have drawn a presumption that such alleged cheques were issued for any legally recoverable debt or liability. The complainant has not discharged such burden cast upon him.
(vi) The learned trial Court has come to a wrong conclusion that the accused was due to the complainant as on the date of issuance of cheques as alleged in the complaint, in the absence of any material to show that the accused was in due and wrongly convicted him.
(vii) The learned trial Court has failed to appreciate that there is no cogent evidence or independent witness in respect of liability of accused in respect of quantum of amount mentioned in the cheques.
On the above among other grounds the appellant / accused prayed to allow the appeal and to set aside the judgment of Trial Court.
7. After registering the appeal notice was issued to the respondent. The respondent appeared through his counsel and trial Court records were secured.
8. Heard the arguments of learned counsel for appellant and the respondent has not chosen to advance arguments inspite of sufficient time granted. Perused the materials placed on record. The learned counsel for appellant has relied on the citation;
6Cri.A.No.726/2022
1. AIR 2024 SC 4103 in the case of Dattatraya Vs Sharanappa.
2. AIR 2024 SC 2105 in the case of M/s Raj Co Steel Enterprises Vs Kavita Saraff.
9. On hearing the arguments and on perusal of the materials placed before the Court the points that arise for consideration are:
(1) Whether the finding of the trial Court that the accused failed to discharge the presumption under section 138 of N.I. Act with probable defence that the cheques were not issued for discharge of legally recoverable debt or liability is justified ?
(2) Whether the finding of the trial Court that the complainant proved that cheques were issued towards discharge of legally enforceable debt is justified ?
(3) Whether the impugned judgment of the trial Court is capricious and erroneous and liable to be interfered ?
(4) What order ?
10. My answer to the above points are:
Point No.1: In the Affirmative.
7
Cri.A.No.726/2022
Point No.2 : In the Affirmative.
Point No.3: In the Negative.
Point No.4: As per final order
for the following:
REASONS
11. Point No.1 & 2: Since these points are inter-linked with
each other they are taken up together for common discussion in order to avoid repetition of facts and appreciation of evidence.
12. It is the case of the complainant that the accused approached him and availed hand loan to the tune of Rs.3,50,000/- in the year 2018 for the purpose of purchasing printing machine assuring to return the said amount within short period. The accused had repaid Rs.1,00,000/- to him and towards repayment of balance amount of Rs.2,50,000/- accused had issued five cheques 1) cheque bearing No.017626 2)cheque bearing No. 017628 3) cheque bearing No.017632 4) cheque bearing No.017633 and 5) cheque bearing No.017634 all dated 01/03/2019 for a sum of Rs.50,000/- each drawn on Axis Bank, Rajajinagar Branch, Bengaluru. When the said cheques were presented by the complainant for encashment through his banker The Bangalore City Co-operative Bank Ltd., Vijayanagar, Bengaluru same were dishonoured with shara 'funds insufficient' on 02/03/2019.
8Cri.A.No.726/2022
13. In support of the case of the complainant, he got examined himself as PW1 and has filed his affidavit in lieu of oral evidence. In his evidence he has testified regarding the transaction, issuance of cheques towards discharge of liability, subsequent dishonour of cheques, service of legal notice and failure of accused to pay the amount. In his further examination he got marked Ex.P1 to Ex.P18.
14. In the proceeding under section 138 of N.I.Act, the plaintiff is not required to establish either legality or enforceability of the debt or liability. He is guarded by the presumption under section 118 and 139 of N.I.Act. By virtue of these presumptions the accused has to establish that the cheque in question was not issued towards any legally enforceable debt or other liability and the burden is upon the accused to rebut the presumption available in favour of the complainant.
15. In the present case the accused has not disputed Ex.P1 to 5 cheques. The factum of dishonour due to "funds insufficient" is not in dispute. After the service of legal notice, accused has not repaid the amount within the period of limitation. Therefore the complainant has discharged the initial burden that was caste upon him and consequently it is for the accused to rebut the presumption under section 139 of N.I.Act and to show that the cheque in question was not issued towards any legally enforceable 9 Cri.A.No.726/2022 debt or liability. The accused is required to rebut the presumption not by plausible explanation but by cogent evidence in support of his defence.
16. The complainant in support of his case got examined himself as PW.1 and produced Ex.P.1 to 5 cheques. Ex.P.6 to 10 are the endorsement which indicates that cheques were dishonoured for the reason funds insufficient. Ex.P.11 is the legal notice wherein the complainant called upon the appellant to pay the cheques amount. Ex.P.12 and 13 are the postal receipts, Ex.P.14 is RPAD Cover, Ex.P.15 is the postal track, Ex.P.16 is the reply notice and Ex.P.17 and 18 are agreements. During the cross examination of PW-1 a suggestion has been made to the effect that the accused had obtained a sum of Rs.1,00,000/- only and he has repaid the same. The said suggestion has been denied by the complainant. The complainant has stated that though accused has repaid a sum of Rs.1,00,000/- out of the total amount of Rs.3,50,000/- he is due a sum of Rs.2,50,000/-.
17. In support of his contention complainant has produced Ex.P.18 loan agreement dated 25/09/2018. The averments of the loan agreement indicates that the accused borrowed a sum of Rs.3,50,000/- from the complainant by way of cash and reapid a sum of Rs.1,00,000/- through The record reveals that the matter is retransmitted from the Commercial Court and the 10 Cri.A.No.726/2022 last date of hearing before the Commercial Court was 22/04/2021 and on that day, the case was not called before the said Court and it was called before this Court on 23/04/2021. So it appeared that no notice is given to the parties about the retransmission of the case.
18. Therefore, office is directed to issue intimation about retransmission of the case and the next date of the hearing to the respective counsels for through transfer. The issuance of five cheques in question also find a place in the loan agreement. Issuance of the aforesaid five cheques have been categorically mentioned in Ex.P.18. It is pertinent to note that Ex.P.18 contains the signature of the accused. ON perusal of Ex.P.18 it clearly indicates the borrowal of amount by the accused and issuance of cheques in favour of the complainant.
19. It is pertinent to note that as per the version of the accused cheque was issued as a security. Even though cheques were issued as security, it would attract the provisions of section 138 of N.I. Act. Therefore the accused has to prove with cogent evidence that complainant has presented the cheques not for legally recoverable debt and the accused has failed to prove the same. The fact of issuance of cheques and the statutory presumption available in favour of the complainant is not rebutted by the accused.
11Cri.A.No.726/2022
20. At this juncture it is necessary to go through a ruling rendered by Hon'ble Apex Court reported in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Agency Limited wherein it is held that a post-dated cheque described as 'security' in the loan agreement is dishonoured, the same would be punishable under section 138 of Negotiable Instruments Act. Since the accused has taken a contention that he had issued the cheque as security, it indicates that there was existing liability on the part of the accused and accused issued the cheque in respect of the same. Under these circumstances the above ruling is squarely applicable to the facts of this case.
21. It is the case of the accused that complainant has misused the cheques. The burden is upon the accused to prove that cheques were misused by the complainant by producing cogent evidence. The accused was at liberty to take any legal action against the complainant if the cheques were misused. But, no such steps were taken by the accused alleging that cheques were misused by the complainant. He has categorically stated during the cross examination that he has not taken any legal action against the complainant alleging that he has misused the cheques. Therefore, there are no materials to substantiate the said contention of the accused. The available materials on record 12 Cri.A.No.726/2022 probabillises the case of the complainant. The accused has failed to raise a probable defence and also failed to rebut the presumption available in favour of the complainant.
22. At this juncture it is worthwhile to go through a judgment reported in AIR (2010) 11 Supreme Court Cases 441, 1898, in the case of Rangappa Vs. Mohan, wherein by relying upon the ruling of Hithen P Dalal Vs. Bratheendranath Banerji, it is reiterated that once the accused admits his signature the legal presumption will have to be raised in favour of the complainant. The accused can prove non-existence of a consideration by raising a probable defence. In the case on hand the accused has failed to raise probable defence.
23. During the cross examination DW-1 has categorically admitted of having issued the Ex.P.1 cheque in favour of the complainant and also admits his signature in Ex.P.1 cheque. On bare perusal of the signature in Ex.P.1 cheque and other cheques produced at Ex.P.2 to P.5 clearly indicates that cheque was issued by the accused in favour of the complainant. Further the defence of the accused that he issued five cheques as security for the loan of Rs.1,00,000/- does not inspire the confidence of the Court without any corroborating evidence in proof of the same.
24. In a proceeding under section 138 of N.I. Act it is for the accused to prove that cheque was not issued towards legally 13 Cri.A.No.726/2022 recoverable debt or liability. He has to lead credible evidence for rebuttal of this presumption. The presumption under section 139 of N.I.Act is a presumption of law, it is not the presumption of fact. This presumption has to be raised by the Court in all the cases. Once the factum of dishonour is established, the onus to rebut the presumption lies on accused and such evidence must be sufficient, cogent, and to be proved beyond all reasonable doubt. Therefore mere explanation is not enough to repel this presumption of law. In the present case the complainant has discharged his initial burden that the accused had issued the cheque in question in his favour and the same was dishonoured. He has also complied with the mandatory provisions prescribed by law. Such being the case, burden is caste on the accused to prove that the cheque was not issued towards any legally recoverable debt.
25. The cumulative effect of oral as well as documentary evidence produced by the complainant is that the accused has issued five cheques 1) cheque bearing No.017626 2)cheque bearing No. 017628 3) cheque bearing No.017632 4) cheque bearing No.017633 and 5) cheque bearing No.017634 all dated 01/03/2019 for a sum of Rs.50,000/- each drawn on Axis Bank, Rajajinagar Branch, Bengaluru. When the said cheques were presented by the complainant for encashment through his banker The Bangalore City Co-operative Bank Ltd., Vijayanagar, Bengaluru same were dishonoured with shara 'funds insufficient' 14 Cri.A.No.726/2022 on 02/03/2019 and the accused has failed to make payment within stipulated period prescribed by law. Accordingly point Nos.1 and 2 are answered in the Affirmative.
26. Point No.3: The trial Court has passed the judgment of conviction against the accused and sentenced him to pay a fine of Rs.2,55,000/- and in default to pay fine ordered him to undergo simple imprisonment for a period of six months by considering oral as well as documentary evidence produced before it. The trial Court has considered the oral as well as the documentary evidence in its right perspective Therefore I find no perversity or error of judgment on the part of the learned Magistrate in convicting the accused. Therefore point No.3 is answered in the Negative.
27. Point No.4:- In view of the findings given on point No.1 to 3, I proceed to pass the following:-
ORDER The appeal filed by the appellant under section 374(3) of Code of Criminal Procedure is dismissed.
The judgment of conviction and sentence passed by the trial Court in C.C.No.2639/2019 dated 06/06/2022 15 Cri.A.No.726/2022 passed by IV Addl. Small Causes Judge and ACMM, Bangalore is hereby confirmed.
Office is directed to transmit the records to the trial Court along with the copy of this order.
(Dictated to the Stenographer Grade-I, Online, typed by her directly on computer, corrected and then pronounced by me in the Open Court on this 11th day of March, 2025) (JAYAPRAKASH. A) LXVI Addl. City Civil & Sessions Judge, Bengaluru 16 Cri.A.No.726/2022 Pronounced vide separate judgment with following operative portion:
ORDER The appeal filed by the appellant under section 374(3) of Code of Criminal Procedure is dismissed.
The judgment of conviction and
sentence passed by the trial Court in
C.C.No.2639/2019 dated 06/06/2022
passed by IV Addl. Small Causes
Judge and ACMM, Bangalore is
hereby confirmed.
Office is directed to transmit the
records to the trial Court along with
the copy of this order.
LXVI Addl. CC & SJ,
Bengaluru