Bangalore District Court
Sri. Mohan Kumar B.V vs Sri. Bhaskar.N on 21 December, 2022
1
C.C.No. 29329/2019
KABC030906622019
Presented on : 10-12-2019
Registered on : 10-12-2019
Decided on : 21-12-2022
Duration : 3 years, 0 months, 11 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated : This the 21 th day of December 2022.
Present: Sri.N.M. RAMESHA, B'Com.,L.L.M.
XVI Addl.C.M.M., Bengaluru City.
Case No. C.C.No
: C.C.No.29329/2019
Complainant : Sri. Mohan Kumar B.V,
S/o. Sri.B.L.Veerabadrappa,
Aged about 44 years,
Proprietor,
M/s. Mother Dairy,
No.710, Tata Silk Farm,
Bangalore -560 004.
(By Smt. Mamatha.K.R, Adv,)
V/s
Accused : Sri. Bhaskar.N,
No.141, 1st Floor,
5th Main, 1st 'E' Cross,
Girinagar, BSK 3rd Stage,
Bangalore -560 085.
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C.C.No. 29329/2019
Also at:
M/s. Mayyia Caters
(Caterers),
No.3912, C-2, Govardhana Giri,
Kalyani Gardens, BSK 1st Stage,
Bangalore -560 050.
(By Sri.V.Manjunath.,Adv.,)
Case instituted : 14.10.2019
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is acquitted
Date of order : 21-12-2022
JUDGMENT
The Complainant has filed this complaint against the accused under the provisions of Sec.200 of the Code of Criminal Procedure, for the offence punishable U/Sec.138 of the Negotiable Instruments Act.
2. The case of the Complainant is as under:-
The complinant is a distributor of Milk products namely Milk, curd, Kova, Paneer, cream, Butter, Sweet Kova etc., having a mother Dairy booth. The complainant and accused were known to each other from considerable time as friends. In the month of May 2018, the accused has approached the complainant for 3 C.C.No. 29329/2019 financial assistance of Rs.3 lakhs for domestic purpose and assured to repay the loan within six months. The complainant has mobilized the funds and paid Rs.3 lakhs to the accused by way of cash on 5.5.2018. The accused has acknowledged the loan on a written stamp paper duly signed by him before the witnesses.
3. It is further averred in the complaint that the accused has informed the complainant that he has got an offer to supply the Milk products to M/s. Mayyia Caters for the functions that are being conducted by the said caterers and needs to buy the same in bulk orders on credit basis. The complainant has agreed and supplied the same for the utmost satisfaction of the caterers and also to the accused. The accused has assured the complainant that he will pay the amount as and when he receive the payments from the caterers. There was a huge credit outstanding as the orders were in bulk supply. The accused has not cleared the dues and credit raised by him for supply of milk products and was due for a sum of Rs.2 Lakhs to the complainant from the month of October 2018.
4. It is further averred in the complaint that the complainant has demanded the accused for repayment of the purchase of milk products. The accused has 4 C.C.No. 29329/2019 assured that the amount will be paid as and when the bill is passed from the caterers. The complainant believing the version of the accused was supplying the bulk orders of the milk products to the accsued. It was came to the knowledge of the complainant that the accused has already collected the entire amount for the supply of milk products from the caterers. On 18.12.2018, the complainant has demanded the accused to pay the balance credit amount of Rs.2 Lakhs. The accused has assured the complainant that the amount will be paid within a period of 5 months in equal installments and assured to pay the hand loan of Rs.3 Lakhs with an extra additional amount of Rs.25,000/- for the said amount. On 10.05.2019, the complainant has demanded the accused for repayment of credit balance amount of Rs.2 Lakhs along with hand loan amount of Rs.3 lakhs. The accused has issued a post dated cheque towards the repayment of the credit balance. After lapse of stipulated period, the complainant has demanded the accussed for repayment of hand loan of Rs.3 Lakhs and credit balance amount of Rs.2 Lakh. The complainant was informed that the validity of the cheque was lapsed. Inspite of request, the accused did not bothered to repay the amount and the accused has threatened the complainant and his family 5 C.C.No. 29329/2019 members with dire consequnces and hence, the complainant has lodged a complaint on 16.9.2019 before the Girinagar Police station. The accused has appeared before the Inspector of polcie and assured to clear the loan amount. On 17.9.2019, the accused has issued a fresh cheque bearing No.681623 dated 18.09.2019 for Rs.5 lakhs drawn on Canara Bank, Vishveshwarapuram branch, Bengaluru in favour of the complainant for repayment of loan of Rs.5 lakhs. The accused has assured to issue another cheque for Rs.25,000/- after honouring the cheque.
5. It is further averred in the complaint that the complainant has presented the cheque for encashment before the State Bank of India, TATA silk Branch, Bangalore. But the said cheque was dishonoured with an endorsement as "Account Dormant" vide dt:19.9.2019. Therefore, the complainant got issued a legal notice on 23.09.2019 calling upon the accused to pay the cheque amount within 15 days from the date of notice. The said notice was duly served on the accused. But inspite of service of legal notice, the accused has failed to pay cheque amount and thereby committed an offence punishable U/s.138 of N.I.Act. Hence, this complaint.
6C.C.No. 29329/2019
6. After presentation of complaint, it was ordered to be registered as PCR No.12823/2019 vide order dated 18.10.2019.
7. The sworn statement of the complainant has been recorded and the documents were got marked as per Ex.P.1 to P.17.
8. My Learned Predecessor in office having heard the arguments of learned counsel for complainant and having satisfied with the complaint averments, sworn statement of complainant and the documents at Ex.P.1 to P.17 and having satisfied with prima facie materials placed on record has taken the cognizance for the offence punishable U/s.138 of N.I.Act and the case was ordered to be registered as CC.No.29329/2019 and process was ordered to be issued agianst the accused vide order dated 10.12.2019.
9. On service of summons, the accused has appeared before the court through his learned counsel and obtained the bail by depositing cash surety amount of Rs.5,000/- vide Q.No.20171/19 dt: 13.2.2020. Copies of all the prosecution papers were supplied to the accused.
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10. The plea of accused for the offence punishable U/s.138 of N.I.Act has been recorded and the substance of accusation has been read over and explained to the accused in the language known to him. The accused has pleaded not guilty, but claims to be tried.
11. In order to establish the guilt against the accused, the complainant got himself examined as PW-1 and got the documents marked as Ex.P.1 to P.19. PW.1 was subjected for cross examination by the learned counsel for the accused.
12. The statement of accused as contemplated under the provisions of Section 313 of Cr.P.C has been recorded and the incriminating evidence as such forthcoming against the accused in the evidence of complainant and documents has been read over and explained to the accused in the language known to him. But the accused has denied the entire evidence of complainant and documents. The accused did choose to enter the defence evidence.
13. In order to substantiate his defence, the accused got himself examined as DW.1. However, the accused did not choose to produce any documentary evidence on his behalf.
8C.C.No. 29329/2019
14. I have heard the arguments of learned counsel for both sides. The learned counel for the accused has filed memo with 13 citations.
15. In the light of the arguments canvassed by learned counel for the both sides, I have carefully perused the oral and documentary evidence placed on record and also gone through the principles laid down in the decisions cited on behalf of the accused.
16. Now, the points that would arise for my consideration are as under:-
1. Whether the complainant proves that the accused has issued a cheque bearing No.681623 dt:18.9.2019 for Rs.5 lakhs drawn on Canara bank, Visweswarapuram Branch, Bangalore in his favour towards legally recoverable debt of Rs.5 Lakhs and on presentation of cheque for encashment before the bank, it was dishonoured with an endorsement as "Account Dormant" vide dt:
19.9.2019 and inspite of issuance of legal notice on 23.9.2019 and inspite of service of legal notice, the accused has failed to pay the cheque amount and thereby committed an offence punishable U/s.138 of N.I.Act?
2. What Order?9
C.C.No. 29329/2019
17. On considering and assessing the oral and documentatry evidence placed on record, now my answers to the above points are as under :
Point No.1: In the Affirmative.
Point No.2: As per final order for the following :-
REASONS
18. Point No.1 : The provisions of Sec.118 of Negotiable Instrument Act deals about presumptions as to neogtiable instruments. As per this provisions of law, unit the contrary is proved, the following presumptions shall be made:-(a) of consideration: that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transfered, was accepted, indorsed, negotiated or transferred for considertaion: (b) as to date: that every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance- that every accepted bill of exchange was accpted within a reasonable time after its date and before its maturity. (d) as to time of transfer-that every transfer of a negotiable instrument was made before the maturity; (e) as to order of indorsement; that the indorsements appearing upon a negotiable instrument were made in the order in which they apear thereon; (f) 10 C.C.No. 29329/2019 as to stamps-that a lost promissory note, bill of exchange or cheque was duly stamped and (g) that holder is a holder indue course- that the holder of a negotiable instrument is a holder in due course.
19. The provisions of Sec.138 of Negotiable Instrument Act deals about dishonour of cheque for insufficiency etc., of funds in the accounts. As per this provisions of law, where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or inpart, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other proviosn of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque or with both.
20. As per the proviso attached to the above said provisions of law, nothing contained in this section shall 11 C.C.No. 29329/2019 apply unless-(a) the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier. (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
[ 21. The provisions of Sec.139 of Negotiable Instrument Act deals about presumption in favour of holder. As per this provisions of law, it shall be presumed, unles 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.
22. The provisions of Section 146 of the Negotiable Instruments Act, 1881 deals about the Bank's slip prima facie evidence of certain facts. As per this provisions of 12 C.C.No. 29329/2019 law, the Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved.
23. Now keeping the above said provisions of Section 20, 118, 138, 139 and 146 of N.I.Act, in mind, let us consider as to whether the complainant could able to comply all the mandates, ingredients, terms and conditions of Sec.138 of NI Act so as to raise and to draw the presumption in his favour as contemplated under the provisions of Section 118 and 139 of N.I.Act.
24. It is averred in the complaint and stated by PW-1 in his oral evidence that he is a distributor of Milk producta namely Milk, curd, Kova, Paneer, cream, Butter, Sweet Kova etc., and he and accused were known to each other as friends and in the month of May 2018, the accused has approached him with a reqeust for hand loan of Rs.3 Lakhs for domestic purpose and therefore, he has paid an amount of Rs.3 lakhs to the accused on 5.5.2018 and the accused has agreed to repay the loan within 6 months and thereafter the accused has informed him that he got an offer to supply 13 C.C.No. 29329/2019 the milk products to M/s. Mayyia Caters for which he has agreed and supplied the milk products and the accused has assured to pay the amount as and when he recieve the payments from caterers and there was an outstanding amount of Rs.2 Lakhs from the month of October 2018.
25. It is further averred in the complaint and stated by PW.1 in his oral evidence that on 18.12.2018, he has demanded the accused to repay the balance amount of Rs.2 Lakhs and hand loan of Rs.3 Lakhs for which the accused has agreed to pay the amount. On 10.5.2019, he has demanded the accused to repay the amount for which he has issued a psot dated cheque towards the repayment of credit balance amount and after stipulated period, he has demanded the accused for payment of amount and by that time, the validity of cheque was already lapsed and on demand the accused did not bothered to repay the loan amount and threatened with dire consequences and therefore, he has lodged a complaint before Girinagar Polcie station on 10.9.2019 for which the accused has appeared before the police and issued a cheque bearing No.681623 dated 18.09.2019 for Rs.5 lakhs drawn on Canara Bank, Vishveshwarapuram, branch, Bengaluru towards repayment of loan of Rs.5 lakhs and therefore, he has 14 C.C.No. 29329/2019 presented the cheque before the State Bank of India, TATA silk Branch, Bangalore. But the said cheque was dishonoured with an endorsement as "Account Dormant" vide dt:19.9.2019 and therefore, he got issued a legal notice on 23.09.2019 calling upon the accused to repay the cheque amount within 15 days from the date of receipt of notice and the said notice has been duly served on the accused. But inspite of service of legal notice, the accused has failed to pay the cheque amount and therefore, he has presented the complaint before the court on 14.10.2019.
26. The complainant has produced the cheque dt:
18.9.2019, Bank challan dt: 18.9.2019, bank endorsement dt: 19.9.2019, legal notice dt: 23.9.2019, postal receipt dt: 23.9.2019, postal acknowledgement dt:
24.9.2019, postal covers, postal reciepts, postal acknowledgement, police endorsement dt: 16.9.2019, statement of accused and they are marked at Ex.P.1 to P.19.
27. The accused has not seriously disputed either the issuance of cheque or presentation of cheque or dishonour of cheque or issuance of legal notice. Infact, there is no specific material suggestions put to PW.1 either to deny the issuance of cheque or presentation of 15 C.C.No. 29329/2019 cheque or dishonour of cheque or issuance of legal notice. But on the other hand, it is suggested to PW.1 that the accused has issued the blank cheque towards the security purpose.
28. Be that as it may, D.W.1 in his cross examination has admitted that the cheque vide Ex.P.1 shown to him is belongs to his account and his signature also finds a place on the cheque.
29. From these materials placed on record, it is crystal clear that the accused by necessary implications has admitted the issuance of cheque to the complainant, presentation of cheque for encashment, dishonour of cheque and issuance of legal notice.
30. However, on careful perusal of complaint averments, oral evidence of PW1 and the documentary evidence at Ex.P.1 to P.19, it clearly establishes that the complainant and accused were known to each other for considerable time and the cheque vide Ex.P.1 is belongs to the accused and he has drawn the same in an account maintained by him with his banker and issued the same to the complainant and on presentation of cheque for encashment before the State Bank of India, Tata silk branch, Bangalore, it was dishonorued with an endorsement as Account Dormant" vide dt: 19.9.2019 as 16 C.C.No. 29329/2019 per Ex.P.3 and therefore, the complainant got issued a legal notice vide Ex.P.4 dt: 23.9.2019 calling upon the accused to repay the cheque amount within 15 days from the date of reciept of legal notice, but inspite of issuance of legal notice, the accsued neither replied to notice nor made arrangement to pay the cheque amount as demanded by the complainant in his notice and therefore, the complainant has presented the complaint before the court on 14.10.2019.
31. It is pertinent to note here that the cheque vide Ex.P.1 is dt: 18.9.2019. The cheque was presented before the bank for encashment on the same day on 18.9.2019 as per Ex.P.2. The cheque was dishonoured with an endorsement as Account dormant vide Ex.P.3 dt: 19.9.2019. As could be seen from the document at Ex.P.4, the complainant has issued a legal notice within the stipulated period from the date of receipt of legal notice giving 15 days time to the accused to pay the cheque amount. But inspite of issuance of legal notice, the accused neither replied the notice nor made necessary arrangements to pay the cheque amount. Therefore, the complainant without any alternative has presented the complaint before the court on 14.10.2019 which was well within time.
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32. So, it is crystal clear that the complainant has complied the mandates of Sec.138 of NI Act by adducing oral evidence of PW.1 and by producing the documentary evidence at Ex.P1 to P.19. The accused neither disputed the issance of cheque or his signature on the cheque or presentation of cheque for encashment or dishonour of cheque and he has also not disputed the address mentioned in the notice and postal acnowledgement. Under these circumstances, when once the complainant has complied the mandates of sec.138 of NI Act, then this court has no option but to draw the presumption in favour of the complainant under the provisions of Sec.118 and 139 of NIAct.
33. Admittedly, the presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act are not conclusive proof, but they are rebuttable in nature. Therefore, when once the complainant has fulilled the mandates of Sec.138 of NI Act and when once the court has drawn the presumptions in favour of the complainant under the provisions of Sec.118 and 139 of NI Act, then the onus shifts on the accused to raise a probable defence and to prove the same before the court to rebut the pesumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
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34. The learned counsel for the complainant has argued with force that the complainant has complied all the mandates of Sec.138 of NI Act by adducing oral evidence of PW.1 and by producing the documentary evidence at Ex.P.1 to P.19 which establishes the transaction between the complainant and accused with respect to purchase of milk products and lending of loan and issuance of cheque in question towards the legally recoverable debt of Rs.5 Lakhs and dishonour of cheque and service of legal notice and therefore, the presumptions are available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
35. It is further contended that the accused neither disputed the issuance of cheque nor presentation of cheque or dishonour of cheque. But the accused has taken a contention that the complainant was doing chit fund business who requested the accused to subscribe for chit fund busines and the complainant has obtained the cheque in question towards the security purpose of chit fund transaction, but the complainant has failed to start the chit fund business and when the accused has requested the complainant to return the cheque, he has failed to return the cheque and therefore and misused the cheque, but the accused has failed to substantiate his probable defence before 19 C.C.No. 29329/2019 the court and has not produced any documents in this regard and hence, in the absence of proof of probable defence, the accused is liable for conviction and payment of cheque amount as per sec.138 of NI Act.
36. Per contra, the learned counsel for the accused has vehemently contended that the oral evidence of PW.1 and the documentary evidence vide Ex.P.1 to P.19 do not establish the transaction between the complainant and accused in respect of purhcase of milk products and lending of loan of Rs.3 Lakhs at any point of time to the accused and the evidence on record do not establish that the cheque was issued towards the legally recoverable debt and the complainant has failed to prove before the court about the alleged transaction including the issuance of cheque in question towards legally recoverable debt and the complainant himself admitted in his evidence that he has not produced any documents before the court to prove the purchase of milk products by the accused.
37. It is further contended that the evidence of DW.1 and the material facts elicited in the cross examination of PW.1 clearly establishes that the complainant was doing chit fund business for which he has requested the accused to subscribe for chit fund 20 C.C.No. 29329/2019 business and the complainant has obtained the cheque in question from the accused towards the security purpose of chit fund business, but the complainant has failed to start and to continue the chit fund business and therefore, the accused has requested the complainant to return the cheque, but the complainant has failed to return the cheque and misused the cheque in question and therefore, the accused is not liable to pay the cheque amount to the complainant. The cheque was not dishonoured for want of sufficient funds in the account of the accussed, but it was dishonoured with an endorsement as Account dormant and there was no existence of debt as on the date of issuance of alleged cheque to the complainant and complainant has failed to establish the guilt against the accused and therefore, the accused is entitled to an order of acquittal.
38. In support of his submission, the learned counsel for the accused has relied upon a decision reported in (2006) 6 SCC 39 in between M.S. Narayana Menon @ Mani Vs. State of Kerala and another., wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble Supreme court has pleased to held that the onus of proof of accused is not as heavy as that of the prosecution, such onus compared with that of a defendant in civil proceedings.
21C.C.No. 29329/2019 On the same principles, the learned counsel for the accused has also relied upon a decision reported in (2013)3 SCC 86 in between Vijay Vs. Laxman and another.
39. The learned counsel for the accused has also relied upon a decision reported in AIR 2009 SCC 278 in between John.K. John Vs. Tom Varghese and Anr., wherein while dealing with the provision of Sec.138 of NI Act, the Hon'ble Supreme court has pleased to held that the presumption raised in terms of Sec.139 of NI Act is rebuttal in nature and the court can take the notice of the conduct of the parties.
40. The learned counsel for the accused has also relied upon a decision reported in ILR 2008 KAR 4629 in between Shivamurthy Vs. Amruthraj., wherein while dealing with the provision of Sec.138 of NI Act, the Hon'ble High court of Karnataka has pleased to held that it is only after satisfying that the complainant has proved the existence of legally enforceable dbet or liability, the courts could have proceeded to draw the presumption under section 139 of NI Act and thereafter find out as to whether or not the accused has rebutted the said presumptions.
22C.C.No. 29329/2019
41. The learned counsel for the accused has also relied upon a decision reported in 2009 0 Supreme (Kar) 265 in between H.R.Nagarthna Vs. Jayashree Prasad., wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble High court has pleased to held that the Presumption U/s 139 of NI Act does not extend to the existence of legally enforceable debt as on the date of cheque and the existence of such detb is to be proved by the complainant beyond reasonable doubt like any other fact.
42. The learned counsel for the accused has also relied upon a decision reported in 2011 O Supreme (Ker) 579 in between Shanthi Vs. Mary Sherly., wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble high court of Kerala has pleased to held that in the absence of proof of drawing of cheque, which is most essential ingredient of the offence U/s.138 of NI Act, execution is different from issuance of cheque, issue means, to give something to some body, issuance of cheque does not mean drawing the cheque.
43. The learned counsel for the accused has also relied upon a decision reported in (2009) 2 SCC 513 in between Kumar Exports Vs. Sharma Carpets., wherein while dealing with the provisions of Sec.138 of 23 C.C.No. 29329/2019 NI Act, the Hon'ble Supreme court has pleased to held that declaration made by the complainant himself to the sales tax department that no sale had taken place, accepted as a valid proof that cheques were not issued by accused in discharge of any debt or liability to complainant, accused, therefore by producing this evidence, held to have displaced the presumption U/s.139 and therefore, offence under Sec.138 N.I.Act is not proved against the accused.
44. The learned counsel for the accused has also relied upon a decision reported in 2012 (3) KCCR 2057 in between Veerayya Vs. G.K.Madivalar., wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble High court has pleased to held that mere issuance of cheque is not sufficient unless it is shown that said cheque was issued towards the dishcarge of a legally recoverable debt. When the financial capacity of complainant is questioned, the complainant has to establish his financial capacity.
45. The learned counsel for the accused has also relied upon a decision reported in (2015) 1 SCC 99 in between K. Subramani Vs.K.Ddamodara Naidu., wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble Supreme court has pleased to held 24 C.C.No. 29329/2019 that when the legally recoverable debt not proved as complainant could not prove source of income from which alleged loan was made to accused, the presumption in favour of holder of cheque stood rebutted.
46. The learned counsel for the accused has also relied upon a decision reported in ILR 2014 KAR 6572 in between Sri.H.Manjunath Vs. Sri.A.M. Basavaraju., wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble High Court court has pleased to held that the absence of statement in the complaint as to when the amount was actually given to the accused, absence of material particulars of the transaction in the complaint, except the signature all other entries are in different handwriting, different ink and undoubtedly made at different time metnioning of merely the date of issue of cheque without any material particulars, then the accused is entiteld to an order of acquittal.
47. The learned counsel for the accused has also relied upon a decision reported in 2004 Cri.L.J.2911 in between K.Annaji Rao Vs. N.Krishna Raju Sekhar and another., wherein while dealing with the provision of Sec.138 of NI Act, the Hon'ble Apex court has pleased 25 C.C.No. 29329/2019 to held that when the notice sent by the registered post was unserved on the accused, then the accused is entitled to the benefit of doubt.
48. The learned counsel for the accused has also relied upon a decision reported in 1997 CRI.L.J.4275 in between Mandhadi Ramachandra Reddy Vs. V.Gopume Reddy Ram Reddy and another., wherein while dealing with the provision of Sec.138 of NI Act, the Hon'ble High Court of Andra Pradesh has pleased to held that when the notice returned unserved with endorsement that accused was not found on the address, then no cause of action could be said to have arisen in view of S.138(c) of NI Act, even if notice deemed to have been served on date it was returned unserved, complaint lodged 45 days thereafter was clelarly beyond period prescribed under S.142(b) of N.I. Act and hence, delay cannot be condoned and court is barred from taking cognizance.
49. The learned counsel for the accused has also relied upon a decision reported in 2010 0 Supreme (Kar) 433 in between Amzad Pasha Vs.H.N. Lakshmana., wherein while dealing with the provision of Sec.138 of NI Act, the Hon'ble High court of Karnataka has pleased to held that it was incumbent 26 C.C.No. 29329/2019 upon the complainant to prove the service of notice on the accused, when a notice sent by registered post was not served on the accused and since the notice stated to have been sent by certificate of posting was not properly adddressed, there cannot be a deemed service of notice.
50. Now keeping the arguments canvassed by the learned counsel for both the sides and the principles laid down in the above cited decisons in mind, let us consider as to whether the accused could able to rebut the statutory presumptions available in favour of the complainant under the provision of Sec.118 and 139 of NI Act.
51. It is the evidence of DW.1 that he had not availed any loan from the complainant and also not isused any cheque in favour of the complainant and he do not know about the dishonour of cheque and the complainant has not paid Rs.3 Lakhs to him and he has not obtained any food products from the complainant for Mayyia caters.
52. From the careful perusal of evidence of DW.1, it is crystal clear that the accused has not only denied the availment of loan of Rs.3 Lakhs from the complainant, but also denied the purchase of milk products from the complainant and due amount of Rs.2 27 C.C.No. 29329/2019 Lakhs towards purhcase of milk products and also denied the existance of legally recoverable debt of Rs.5 Lakhs and issuance of cheque in question towards legally recoverable debt of Rs.5 Lakhs.
53. Therefore, heavy burden lies on the complainant to prove that he has lent the loan of Rs.3 Lakhs to the accused and the accused has purchased the milk products to the tune of Rs.2 Lakhs and there was an existence of legally recoverable debt of Rs.5 Lakhs from the complainant and the accused has issued the cheque in question towards the legally recoverable debt of Rs.5 Lakhs. Now let us consider as to whether the complainant could able to prove the lending of loan of Rs.3 Lakhs to the accused on 5.5.2018 and he has sold milk products to the accused to the tune of Rs.2 Lakhs and there was an existence of legally enforceable debt of Rs.5 Lakhs from the complainant and the accused has issued the cheque in question towards legally recoverable dbet of Rs.5 Lakhs.
54. It is suggested to DW.1 that the signature of his wife finds a place on Ex.P.9 postal acknowledgement; that he and his wife jointly doing catering business on a pulling cart near Dhobhighat; that he came in contact with complainant through one Lokesh and purchased 28 C.C.No. 29329/2019 the milk products from the complainant; that he has availed a loan of Rs.3 Lakhs from the complainant in the year 2018; that he has issued the cheque in question vide Ex.P.1 to the complainant towars hand loan and due towards purhcase of milk products; that he has given statement before the police with respect to tranaction of purchase of milk products from the complainant.
55. But all these material suggestions have been specifically denied by DW.1. Therefore, it is said that the denied suggestions are always remained as suggestions only and not come in the way of complainant either to falsify the probable defence taken by the accused or to falsify the oral evidence of DW.1 or to prove that the accused has availed a loan of Rs.3 Lakhs and purchased the milk products to the tune of Rs.2 Lakhs and the accused has issued the cheque in question towards the legally recoverable debt of Rs.5 lakhs.
56. However, there is no specific suggestions to DW.1 as to the exact date on which the accused has approached him for lending of loan of Rs.3 Lakhs and the exact date on which he has sold milk products to the accused and the exact date on which he has raised the invoice to sell the milk products to the accused.
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57. No doubt, PW.1 in his evidence has stated that he had prepared the income and expenditure statement. But he has not produced the said documents before the court. Even according to PW.1 that he is not paying income tax to the concerned department and except income from dairy, he is not doing any other business. The complainant has not produced any documents to show that he was getting that much of income so as to lend Rs.3 Lakhs to the accused. The complainant has also not produced any documents to show that he has sold the milk products to the accused to the tune of Rs.2 Lakhs.
58. It is pertinent to note here that if really the complainant wants to lend a loan of Rs.3 Lakhs to the accused, then he could have paid the same either by way of cheque or NEFT or RTGS or any other online mode. It is not the case of the complainant that he do not have any accounts in any bank or do not have any cheque books in his possession. But, even according to P.W.1 that he is having two accounts in two different banks and he has obtained cheque books from both banks and he has been transacting through cheques only for all his business and there was no impediment for him to lend the loan of Rs.3 Lakhs to the accused by way of cheque on 5.5.2018. But he has not paid the 30 C.C.No. 29329/2019 same either by way of cheque or NEFT or RTGS or any other online mode. So, from these materials placed on record, it is crystal clear that a doubt arises about the alleged loan transaction of Rs.3 Lakhs between the complainant and accused.
59. It is pertinent to note here that in his evidence PW.1 has stated that his mother-in-law had sold property and he has obtained Rs.3 Lakhs from his mother-in-law and paid the same to the accused. But this evidence of P.W.1. do not finds a place either in the notice or in the complaint or in the affidavit in chief examination as admitted by PW.1 in his evidence.
60. Be that as it may, if really the complainant had obtained an amount of Rs.3 lakhs from his mother-in- law which she derived from the sale of her property and paid the same to the accused on 5.5.2018, then the complainant could have either examined his mother-in- law before the court to substantiate the said facts or he could have produced the said sale deed or any other documents before the court. But, PW.1 has stated in his evidence that he do not have any information about the sale deed being registered before the Sub-registrar and he do not know as to where exactly the sale deed was registered and he has also not produced such document 31 C.C.No. 29329/2019 before the court to show that he has obtained an amount of Rs.3 Lakhs from his mother-in-law and paid the same to the accused.
61. Even according to PW.1 that he has not mentioned about Rs.3 lakhs taken by him from his mother-in-law either in his notice or in the complaint or in the affidavit -in-chief examination and there was no impediment for him to mention the same in his notice or in his complaint or in his affidavit in chief examiantion. Even according to PW.1 that he has also not produced the stamp paper on which the accused alleged to have executed the document with respect to availment of loan of Rs.3 Lakhs. In the absence of such documents on record, the case of the complainant that he has paid loan of Rs.3 Lakhs to the accused on 5.5.2018 and he has sold the milk products to the tune of Rs.2 Lakhs is highly doubtful and therefore, cannot be accepted.
62. According to the contents of notice and complaint, the accused stated to have purchased the milk products to the tune of Rs.2 lakhs so as to supply the same to M/s.Mayyia caters and the accused stated to have agreed to repay the amount of Rs.2 Lakhs as and when he receive the same from M/s. Mayyia Caters. If that is so, the complainant could have produced the 32 C.C.No. 29329/2019 ledger accounts, Quotation, invoice or any other documents to substantiate these facts or he could have enquired M/s. Mayyia caters about these fact. But he has not done so. No explanation as such forthcoming in this regard. But, on the other hand, it is forthcoming in the evidence of PW.1 that he has not seen the quotation issued by Mayyia Caters to the accused and also not enquired M/s. Mayyia caters in respect of supply of milk products by the accused to the said Mayyai caters and he has also not produced any documents to show that the accused has agreed to pay the amount of Rs.2 lakhs as and when he receive the same from M/s.Mayyai Caters.
63. PW.1 has stated in his evidence that he has not obtained any documents from the accused with respect to sale of Milk products to the accused and he has also not raised any bills in this regard and also not taken any signature from the accused. Even according to PW.1 that he do not know as to when exactly he has sold the milk products to the accused including the quotations and other particulars of milk products and there was no impediment for him to obtain such documents from the accused. But he has not produced such documents before the court.
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64. It is pertinent to note here that at one point of time, P.W.1 has stated that he has paid a loan of Rs.3 Lakhs to the accused at first instance and therafter, sold the milk products to the tune of Rs.3 Lakhs. But at another point of time, PW.1 has stated that when the accused was due for Rs.2 Lakhs towards purchase of milk products, he has not paid Rs.3 lakhs to the accused and there is no documents to show that the accused agreed to repay the amount of Rs.5,25,000/-. From these evidence of PW.1, it clear that the complainant has kept on chaning his version from stage to stage and thereby laid on the material facats before the court with respect to lending of loan of Rs.3 Lakhs and sale of milk products to the tune of Rs.2 Lakhs to the accused.
65. It is mentioned in the notice and complaint that the accused had issued a cheque towards repayment of loan of Rs.5 Lakhs and when he approached the accused and requested for repayment of loan of Rs.5 Lakhs, the accused threatened him and his family members with dire consequences and therefore, he has lodged a complaint on 16.9.2019 to Girinagar Police station wherein the accused has apepared before police station and assured to clear the amount and issued fresh cheque in question for Rs.5 Lakhs. The 34 C.C.No. 29329/2019 complainant has produced the documents at Ex.P.18 police endorsement and Ex.P.19 statement of accused before police if possible to prove these facts.
66. But, on perusal of documents at Ex.P.18 and P.19, it is no so. On the other hand, it falsify the contents of notice, complaint and affidavit in chief examination of PW.1. Because, as could be seen from the document at Ex.P.18, the complainant stated to have lodged a complaint against the accused for non payment of Rs.2 lakhs towards purchase of milk products. As could be seen from the document at Ex.P.19, the accused stated to have given statement before the police on 20.9.2019 in respect of complaint lodged on 16.9.2019 to the effect that he has not purchased any milk products from the complainant to the tune of Rs.2 lakhs, but he has availed a loan of Rs.1 Lakh from the complainant in the year 2018 and he was due for Rs.72,000/- towards milk products totally Rs.1,72,000/- out of which he has already paid Rs.1,20,000/- to the complainant and he was due of Rs.52,000/- and the complainant has agreed to return the blank cheques on repayment of balance amount of Rs.52,000/- and he was ready to repay the said balance amount of Rs.52,000/-, but the complainant did not 35 C.C.No. 29329/2019 return the cheques. So, the very documents at Ex.P.18 and P.19 falsify the case made out by the complainant.
67. It is pertinent to note here that if really the complainant had lent loan of Rs.3 Lakhs to the accused and if really the accused hasd agreed to pay the said amount of Rs. 3 Lakhs, then he could have mentioned the same in his complaint dt: 16.9.2019 and he could have produced the same before the court to substantiate these facts. But he has not done so. No explanation as such forthcoming in the evidence of PW.1. But, on the other hand, PW.1 has stated that there was no impediment for him to produce the complaint lodged before Girinagar police station. It is also forthcoming in the evidence of PW.1 that the accused had not threatened with dire consequences. But, contrary to the evidence of PW.1, it is mentioned in the notice and complaint that the acused had threatened with dire consequences and thereby the complainant has gobye to his own contents of complaint and notice.
68. Even according to PW.1 that he has not obtained any documents from the accused to show that the accused was due for Rs.5 Lakhs at the time of issuance of cheque in question and the cheque in question was not dishonorued for want of sufficient 36 C.C.No. 29329/2019 funds in the account of the accused, but it was dishonorued with an endorsement as "Dormant Account" and he has not enquired with bank officials after issuance of bank endrosement as to the reasons for dishonour of cheque. PW.1 has stated that he has not enquired as to what happened with respect to issuance of notice to M/s. Mayyia's address.
69. It is also forthcoming in the evidence of P.W.1 that the notice sent to M/s.Mayyia's address was returned with an endorsement as "No such person" and it is also admitted by PW.1 that the signature found on Ex.P.9 is not as that of the accued and he has not produced documents to show that the accused has been residing in the address mentioned in Ex.P.9 and the name and signature do not finds a place on Ex.P.9 in the receiver column and he has not given statement before the police station and he has also not mentioned in his notice and complaint with respect to execution of documents on the stamp paper by the accused. All these inconsistancies and glaring discrepancies found in the evidence of PW.1, notice, complaint including the affidavit in chief examination goes to the very root of the case made out by the complainant and creates a doubt about the alleged lending of loan of Rs.3 Lakhs and purchase of milk products to the tune fo Rs. 2 Lakhs 37 C.C.No. 29329/2019 and existence of loan of Rs.5 Lakhs and issuance of cheque in question towards the legally recoverable debt of Rs.5 Lakhs.
70. On appreciation of entire oral and documentary evidence placed on record, it is found that the oral evidence of PW.1 is not consistant and not inconfirmity with contents of notice and complaint, but contradictory in nature with respect to the exact date on which the accused has approached the complainant for availment of loan of Rs.3 Lakhs and the exact date on which the accused has purchased milk products from the complainant to the tune of Rs.2 Lakhs. The materials on record do not establish about the lending of loan of Rs.3 Lakhs by the complainant to the accused on 5.5.2018 or puchase of milk products by the accused from the complainant for Rs.2,00,000/-. The oral and the documentary evidence placed on record do not establish the existence of legally recoverable debt of Rs.5 Lakhs from the accused and issuance of cheque in question to the complainant towards legally recoverable debt of Rs.5 Lakhs.
71. A perusal of cheque in question vide Ex.P.1 goes to show that the signature and the conents of cheque are in different hand writing and also in different 38 C.C.No. 29329/2019 ink colour. Therefore, the defence taken by the accused that a blank signed cheque was received by the complainant and later on it was filled by the complainant and filed the complaint by using the said blank cheque is appears to be more probable than that of the case made out by the complainant.
72. It is pertinent to note here that from the oral evidence of PW.1 and the documentary evidence at Ex.P.1 to P.19, it is not shown by the complainant as to how and in what manner an amount of Rs.5 Lakhs was due as on 18.9.2019, payable by the accused. The alleged loan of Rs.3 Lakhs stated to have taken by the accused on 5.5.2018. As already stated and noticed above that the contents of the notice, complaint and affidavit in chief examination do not indicate as to the exact date on which the accused has approached the complainant for availment of loan of Rs.3 Lakhs and the exact date on which the complainant has sold milk products to the tune of Rs.2 Lakhs to the accused and the complainant has also not produced any documents before the court to prove the alleged loan transaction of Rs.3 Lakhs and purchase of milk products to the tune of Rs.2 Lakhs. On the other hand, the cheque in question vide Ex.P.1 is dt: 18.9.2019. The alleged complaint stated to have lodged by the accused on 16.9.2019. The 39 C.C.No. 29329/2019 police have issued an endorsement vide Ex.P.18 on 16.9.2019 and the accused stated to have given statement before the polcie vdie Ex.P.19 on 20.9.2019 to the effect that he was due only for Rs.52,000/- and the complainant failed to return the blank cheques issued at the time of availing of loan of Rs.1 Lakh and purchase of milk products to the tune of Rs.72,000/-.
73. Therefore, the complainant ought to have estbalished by the producing the relevant ledger book, invoice, quotation, receipt or any other authenticated documents that the amount mentioned in the cheque was actually due as on the date of issuance of cheque vide Ex.P.1 on 18.9.2019. When PW.1 was a business man doing milk products busienss and when the complainant admitted that he was maintaining income and expenditure documents ought to have produced those documents before the court. But he has not done so. No explanation as such forthcoming in this regard in the evidence of PW.1. In the absence of such an explanation, an adverse inference has to be drawn against the case made out by the complainant.
74. It is forthcoming in the evidence of DW.1 and also documentary evidence at Ex.D.18 and D.19 that the accused had availed a loan of Rs.1 Lakh only and 40 C.C.No. 29329/2019 purchased milk products to the tune of Rs.72,000/- out of which he has already paid Rs.1,20,000/- to the complainant and was due of Rs.52,000/- only and when he requested to return the blank signed cheques after receiving the balance amount of Rs.52,000/-, the complainant has failed to return the blank cheques. It is pertinent to note here that the liability and security are two different entities and both cannot be mixed or acted upon simultaneously. If the act of a person in discharge of liability is not done, then the security comes into picture. If the act of a person in disharge of liability is performed, then the security would not have any legal force. Therefore, when the accused was ready to pay the balance amount of Rs.52,000/-, then the complainant ought to have receive the same and return the blank cheques which was issued at the time of lending of loan of Rs.1 Lakh and at the time of purchase of milk products to the tune of rs.72,000/-. But the complainant has not done so. No explanation as such forthcoming in the evidence of PW.1. In the absence of such an explanation, it cannot be said that there was an existence of legally recoverable debt of Rs.5 Lakhs from the accsued and the accused has issued the cheque in question to the complainant towards the legally recoverable debt of Rs.5 Lakhs.
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75. Under these circumstances, the arguments of the learned counsel for the complainant that the accused has availed a loan of Rs.5 Lakhs on 5.5.2018 and purhcased the milk products to the tune of Rs.2 Lakhs and the accused has issued the cheque in question towards legally recoverable debt of Rs.5 Lakhs and the complainant has proved the guilt against the accused with oral evidence of PW.1 and the documentary evidence at Ex.P.1 to P.19, but the accused has failed to raise a probable defence and failed to prove the same before the court and failed to rebut the statutory presumptions and hence, the accused is liable for conviction and payment of cheque amount U/s.138 of NI Act is not sustainable under law and therefore, cannot be accepted.
76. But, on the other hand, there is some legal and considerable force in the submission of the learned counsel for the accused that the contents of notice, complaint and affidavit in chief examination do not establish the lending of loan of Rs.3 Lakhs by the complainant to the accused and purchase of milk products to the tune of Rs.2 Lakhs by the accused from the complainant and also do not establish the existence of legally recoverable detb of Rs.5 Lakhs and do not establish the issuance of cheque in question towards the 42 C.C.No. 29329/2019 legally recoverable debt of Rs.5 Lakhs and the complainant has failed to produce relevant documents to show the loan transaction and purchase of milk products to the tune of Rs.2 Lakhs and failed to prove the guilt against the accused, but the accused has raised a probable defence and proved the same by adducing oral evidence of DW.1 and by eliciting material facts in the evidence of PW.1 during his cross examination which clearly establishes that the accused has issued the cheque in question towards security purpose for lending of loan of Rs.1 Lakh and purchase of milk products to the tune of Rs.72,000/- only out of which he has already paid Rs.1,20,000/- and he was due for Rs.52,000/- only and when the accused was ready to pay balance amount of Rs.52,000/-, the complainant has failed to return the cheque and therefore, the accused is not liable to pay cheque amount U/s.138 of NI Act and the decisions cited in this regard are also applicable to the facts and circumstances of the case.
77. Therefore, for the reasons discussed above, this court is of the considered view that the materials placed on record do not establish the guilt against the accused U/s.138 of NI Act. Therefore, I hold that the complainant has failed proved the guilt against the 43 C.C.No. 29329/2019 accused for the offence punishable U/s.138 of NI Act. Hence, I answer point No.1 in the 'Negative'.
78. POINT NO.2: In view of my findings on point No.1, I proceed to pass the following:-
O RDE R The accused is found not guilty for the offence punishable U/s.138 of Negotiable Instruments Act.
Hence, acting U/sec.255(1) of Cr.P.C., the accused is hereby acquitted for the offence punishable U/sec.138 of N.I.Act. The bail bonds of the accused shall be in force till the appeal period is over as contemplated under the provisions of Sec.437(A) of Cr.P.C.
The cash surety of Rs.5,000/- deposited by the accused vide Q.No.20171/19 dated 13.2.2020 shall be refunded to the accused after the appeal period is over with due identification and also on proper verification.
(Dictated to the stenographer, transcribed by him, print out taken by him, verified, corrected and then pronounced by me in the open Court on this the 21 st December 2022).
(N.M.RAMESHA) XVI ACMM, Bengaluru City.44
C.C.No. 29329/2019 ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri.Mohan Kumar B.V
2. List of documents exhibited on behalf of the Complainant:-
Ex.P.1 : Original Cheque. Ex.P.1(a) : Signature of the Accused. Ex.P.2 Bank Challan Ex.P.3 : Bank Memo. Ex.P.4 : Office copy of Legal Notice. Ex.P.5 to P.8 : postal receipts Ex.P.9 : Postal acknowledgement
Ex.P.10 & P.11 : returned legal notices Ex.P.12 & P.13 : Postal envelopes Ex.P.14 & P.15 : Postal receipts Ex.P.16 ; Postal acknowledgement Ex.P.17 : Complaint Ex.P.17(a) : Signature of complainant Ex.P.18 : acknowledgement by Police Ex.P.19 : Statement before police
3. List of witness/s examined on behalf of the Accused:-
DW-1 : Bhaskar
4. List of documents exhibited on behalf of the Accused:-
Nil (N.M.RAMESHA) XVI ACMM, Bengaluru City. 45 C.C.No. 29329/2019