Bangalore District Court
Mr.Satish Kumar P.S vs Mr. Deepu P.S on 22 May, 2023
KABC0C0167422021
IN THE COURT OF XXXIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL UNIT, BENGALURU. (ACMM-34)
PRESENT: Smt.PARVEEN A BANKAPUR,B.Com.LLB.
XXXIV ADDL. CHIEF METROPOLITAN
MAGISTRATE,
Dated : This the 22nd day of May, 2023.
C.C.No.55133/2021
COMPLAINANT : Mr.Satish Kumar P.S.
S/o. P.E. Surender Rao,
Aged about 47 years,
R/at No.11, 3rd Floor, 9th Cross,
Jaraganahalli, Opp Jaraganahalli
Park, J.P.Nagar 6th phase,
Bengaluru - 78.
(By Mr. H.V. Naveen Kumar Rao &
H.V. Sunil Kumar Rao -Advocates)
V/s
ACCUSED : Mr. Deepu P.S.,
S/o. Mr. Suresh P.N.
R/at Behind Raghavendra Medical
and General Stores, Gadduge Road,
Ganagara Hundi,
Mysore -570 026.
Also at
Galaxy Tailors, Gadduge Road,
Ganagara Hundi,
Mysore -570 026
(By Mr. R.R. Sachin - Advocates)
1 Date of Commencement 05.04.2021
of offence
2 Date of report of offence 29.06.2021
3 Presence of accused
3a. Before the Court 02.12.2021
3b. Released on bail 02.12.2021
4 Name of the Complainant Mr. Satish Kumar P.S.
5 Date of recording of 16.09.2021
2 C.C.No.55133/2021
evidence
6 Date of closure of evidence 06.04.2023
7 Offences alleged U/s 138 of the Negotiable
Instruments Act.
8 Opinion of Judge Accused is found guilty.
JUDGEMENT
The Private Complaint is filed by the complainant under Section 200 of Cr.P.C against the accused alleging that he has committed the offence punishable under Section 138 of Negotiable Instruments Act.
2. The brief facts of the complaint are as follows:
The complainant submits that, the accused being acquaintance to him in the month of July and August 2019 had sought for a handloan for Rs.4 lakhs from him, agreeing to repay the same within a span of 6 months from August 2019 as accused was in dire need of funds for his business and other financial requirements. Considering the request of the accused, he arranged and paid Rs.4 lakhs to the accused, by way of cash on 25.7.2019 a sum of Rs.2 lakhs and on 30.8.2019 paid a sum of Rs.2 lakhs and in total a sum of Rs.4 lakhs was paid to the accused.3 C.C.No.55133/2021
It is further submitted by the complainant that even after the lapse of 6 months, the accused has not paid the said amount. Upon his repeated requests and demands, the accused finally issued 2 cheques bearing No.185378 dtd.5.4.2021 for Rs.2 lakhs and another cheque bearing No.185379 dtd.15.4.2021 for Rs.2 lakhs both drawn on ICICI Bank, V.V.Mohala branch, Mysore.
The Complainant further stated that as per the request of the Accused, he presented the said Cheques issued by the Accused for encashment through his banker i.e., Union Bank of India, Cantonment branch, Bengaluru. However, both the Cheques were returned for the reason for "Payment stopped by drawer" on 17.4.2021. After the endorsement, the Complainant has got issued notice on 20.4.2021 to the accused. But the same was returned with a shara 'refused' on 24.5.2021. Despite knowledge of the Legal Notice, the Accused has not paid the Cheques amount. Hence, the Complainant has filed present complaint against the Accused for the offence punishable u/Sec.138 of N.I. Act.4 C.C.No.55133/2021
3. Based on the complaint, the sworn statement affidavit, and documents etc., took cognizance of an offence punishable Under Section 138 of N.I. Act by following the guidelines of Apex Court issued in Indian Bank Association case and ordered to be registered a criminal case against the accused for the offence punishable Under Section 138 of N.I. Act.
4. After issuance of summons, accused appeared before the court and enlarged himself on bail. Plea was recorded, read over and explained to the accused, who pleads not guilty and claims to be tried. Hence, the case is posted for complainant's evidence.
5. The Complainant himself examined as PW-1 and got marked documents Ex.P-1 to Ex.P.9 and closed his side.
6. Accused was examined U/S 313 of Cr.P.C. Incriminating evidence appearing in the complainant's evidence was read over and explained to the accused who denies the same. The Accused himself examined as DW-1 and no documents are marked from his side and closed his side. 5 C.C.No.55133/2021
7. Heard the learned Counsel for Complainant and Accused.
The learned Counsel for Accused has placed the following citations;
1. Basalingappa V/s. Mudibasappa (2019 5 SCC 418 )
2. Rajaram V/s. Maruthachalam (2023 (1) Kar.L.R. 445)
3. K.Subramani V/s. K. Damodara Naidu (2015(1) DCR 5)
4. Syed Sulaiman Shahid V/s N.D. Subramanyam (2020(1)KCCR 458)
5. Virupaxagowda V/s. Basavaraj @ Basavanaepa (2020 (2) DCR 574)
8. Upon hearing the arguments and on perusal of the materials placed on record, the following points arise for my consideration.
1) Whether complainant proves beyond all reasonable doubts that accused in discharge of legally recoverable debt has issued 2 Cheques No.185378 dtd.5.4.2021 for Rs.2 lakhs and another cheque bearing No.185379 dtd.15.4.2021 for Rs.2 lakhs both drawn on ICICI Bank, V.V.Mohala branch Mysore in favour of the complainant which came to be dishonoured with an endorsement "Payment stopped by drawer" on 17.4.2021 and in spite of knowledge of notice accused has not paid the Cheques amount and thereby committed an offence under Section 138 of N.I.Act?
2) What Order?
6 C.C.No.55133/2021
9. My findings on the above points is:
Point No.1: In the Affirmative.
Point No.2: As per final order for the following:
REASONS Point No.1:-
10. Existence of legally recoverable debt is a sine qua non for prosecuting the case under Section 138 of Negotiable Instruments Act. For convenient purpose the essential ingredients to constitute offence under Section 138 of N.I.Act is summarized as below:
(i) That there must be a legally enforceable debt.
(ii) That the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes the legally enforceable debt.
(iii)That the cheque so issued had been returned due to "funds insufficient".
11. The core contention of the Complainant is that, the accused being acquaintance to him in the month of July and August 2019 had sought for a handloan for Rs.4 lakhs from him, agreeing to repay the same within a span of 6 months from August 2019 as accused was in dire need of funds for his 7 C.C.No.55133/2021 business and other financial requirements. Considering the request of the accused, he arranged and paid Rs.4 lakhs to the accused, by way of cash on 25.7.2019 a sum of Rs.2 lakhs and on 30.8.2019 paid a sum of Rs.2 lakhs and in total a sum of Rs.4 lakhs was paid to the accused.
12. It is further submitted by the complainant that even after the lapse of 6 months, the accused has not paid the said amount. Upon his repeated requests and demands, the accused finally issued 2 cheques bearing No.185378 dtd.5.4.2021 for Rs.2 lakhs and another cheque bearing No.185379 dtd.15.4.2021 for Rs.2 lakhs both drawn on ICICI Bank, V.V.Mohala branch, Mysore.
13. The Complainant further stated that as per the request of the Accused, he presented the said Cheques issued by the Accused for encashment through his banker. However, both the Cheques were returned for the reason for "Payment stopped by drawer" on 17.4.2021. After the endorsement, the Complainant has got issued notice on 20.4.2021 to the accused. But the same was returned with a shara 'refused' on 24.5.2021. Despite knowledge of the Legal Notice, the Accused 8 C.C.No.55133/2021 has not paid the Cheques amount. Hence, the Complainant has filed present complaint against the Accused for the offence punishable u/Sec.138 of N.I. Act.
14. In order to bring home the guilt of the accused, earlier the Complainant himself examined as PW1 and reiterated the contents of the complaint. The Complainant has placed original Cheques bearing No.185378 and No.185379 at Ex.P1 and Ex.P2. bank endorsements at Ex.P3 and 4, Ex.P5 is the office copy of legal notice issued by the Complainant to the Accused on 20.4.2021, Ex.P6 and 7 are the two postal receipts and Ex.P8 and Ex.P9 are returned postal covers.
15. The documents produced by the complainant of course established that the complainant meets out the procedural requirements of Section 138 of Negotiable Instrument Act, but it is to be considered whether all these documents establish the offence committed by the accused.
16. On perusal of the oral and documentary evidence placed by the complainant, it reveals that the present complaint is filed well within time in accordance with the provisions of Negotiable Instruments Act. Moreover, there is no dispute with 9 C.C.No.55133/2021 regard to taking cognizance of the offence punishable under Section 138 of N.I. Act.
17. The Negotiable Instruments Act raises two presumptions. One contained in Section 118 and the other in Sec. 139 thereof. For the sake of convenience Sec 118(1) of the N.I. Act is extracted here below:
118. Presumptions as to negotiable Instruments ---
Until 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 transferred, was accepted, indorsed, negotiated or transferred for consideration.
1. To (g) . . . . . . . . . . . .
Provided that where the instrument has been obtained from its lawful owner, or from an person in lawful custody thereof, by means of an offence of fraud, or has been obtained from the maker or acceptor thereof by means of an offence of fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him". 10 C.C.No.55133/2021
Further Section 139 of the Negotiable Instruments Act reads as under;
"139, Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, of any debt or other liability."
18. Scope and ambit and function of the presumption U/s 118(a) and Sec 139 of NI Act came to be considered by the Hon'ble Apex Court of Indian in Krishna Janardhan Bhat Vs Dattatraya G.Hegde (2008 NIAR (Criminal 151) The Supreme Court has laid down the law in the following phraseology.
"D Negotiable Instruments Act 1881, Secs. 139, 138
--Presumption under-same arises in regard to second aspect of the matter provided under Sec 138
--Existence of legally enforceable debt is not a matter of presumption under Sec 139- It merely raises presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability - Merely an application of presumption contemplated under Section 139 of N.I.Act should not lead to injustice or mistaken conviction."11 C.C.No.55133/2021
19. Further, said decision was followed by Hon'ble High Court of Karnataka in Kempanarasimhaiah Vs P.Rangaraju & Others (2008 (5) KCCR 3371). Relevant paragraph of the said judgment reads as under: -
"12. As to the provisions of Sections 138 of N.I.Act, the following principles emerge from the above observations of Hon'ble Supreme Court at para Nos. 21, 23, 25, 26 and 34 of its Judgment in the above said case of Krishna Janardhan Bhat Vs Dattatraya G.Hegde, AIR 2008 SC 1325.
(i) Section 139 of the Act merely raises a presumption that the cheque was issued towards discharge in whole or in part in any debt or other liability, which presupposed legally enforceable debt. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability." (para 21)
(ii) The question as to whether the presumption stood rebutted or not, must be determined keeping in view the other evidences on record. Where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. (para 26) 12 C.C.No.55133/2021
(iii) An accused, for discharging the burden of proof placed upon him under a statute, need not examine himself. He may discharge his burden on the basis of the materials already brought on records (para 23)
(iv) Standard of proof on the part of an accused and that of the prosecution in a criminal case is different.
Further more where as prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities'"
(para 23 & 25)
(v) Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies (para 25)
(vi) Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be deliberately balanced (para 34)
20. Thus from the observations extracted above, it is clear that presumption Under Section 139 of the N.I,.Act is only to the extent that the cheque was drawn for discharge in full or in part of any debt or other liability and the said presumption do not relate to the existence of legally enforceable debt or liability. 13 C.C.No.55133/2021 Therefore, before drawing the presumption under section 139 of the N.I.Act, it is the duty of the Court to see whether or not the complainant has discharged his initial burden as to existence of legally enforceable debt. No doubt, as per Section 118(a) of the Act, there is a rebuttable presumption that every negotiable instrument, is accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration."
21. Factual matrix of the case is required to be tested on the anvil of principles emerging from the above-referred decisions.
22. The defence taken by the Accused is that, he never borrowed any handloan from the Complainant, he submits that on July 2019, Accused came to know that, his Cheque book was lost, therefore, on 17.7.2019 he lodged complaint with ICICI Bank, Mysore branch and in pursuance of complaint made by him, banker made stop payment of the Cheques.
23. In order to substantiate to his claim, the Complainant has examined as PW1. In the cross-examination he stated that, Accused is his distant relative from his mother 14 C.C.No.55133/2021 and Complainant doing tailoring work and earn Rs.30,000/- - Rs.35,000/- per month. In the cross-examination the Complainant stated that Accused residing at Mysore and he do not know the address of the Accused. He further stated that, after obtaining the address of the Accused from his another relative he had sent notice to the Accused. In the cross- examination learned Counsel for accused himself suggested that, the Accused has issued blank signed Cheque to him.
24. In the defence the Accused stated that, his Cheque book was lost and he lodged the complaint before his bank. With this regard, he has not produced copy of complaint nor he has examined the banker. On the other hand, in the cross- examination of PW1, learned Counsel for accused himself suggested that, Accused has issued signed Cheques to the Complainant. As per the contention of Accused, he lodged complaint before the bank for lost of Cheque in the month of July 2019 for stop payment and Cheques were issued in the month of April 2021.
25. The learned Counsel for accused during the course of arguments, vehemently that, the handwritings on the 15 C.C.No.55133/2021 Cheques were not belongs to the Accused. On the other hand, they are not denied the signature of the Accused. During the course of arguments, the learned Counsel for accused took the handwriting of the Accused before court on back side of the memo. It is pertaining to note that, the Accused is admitted signature on both Cheques. On the other hand, his defence is that he lost his Cheque book. Except oral defence, he has not produced any document to show that, he lost his Cheque book and lodged the complaint before banker. Further, he has not taken any legal action against the Accused for misusing of lost Cheques before any authority.
26. The learned Counsel for accused further argued that, the Complainant has no financial capacity to advance the loan of Rs.4 lakhs to the Accused. In this regard, they have relied on 2015 (1) DCR 5 Supreme Court of India, in the case of K. Subramani V/s. K. Damodara Naidu, wherein the Hon'ble Apex Court held that;
"where Complainant had no source of income to lend such huge amount to Accused and failed to prove that, there is legally recoverable debt payable by the Accused to him then, acquittal is just and proper."16 C.C.No.55133/2021
27. He further relied on another decision in the case of Basalingappa V/s. Mudibasappa 2019 (5) SCC 418 wherein Hon'ble High Court held that;
"Drawing of presumption under and how said presumption can be rebutted - Standard of proof - while prosecution must establish its case beyond reasonable doubt, Accused to prove a defence must only meet standard of preponderance of probabilities."
28. In the present case, in the defence one side Accused stated that, the Complainant is unknown to the Accused. But in the cross-examination he admitted that, he is relative of him. Further in the examination in chief the Accused stated that, his Cheque book was lost. Therefore, he lodged the complaint before the bank. In the cross-examination he stated that due to ill health of his father and due to he worked in another place, Accused was handed over the signed Cheques to his mother, which were stolen. Therefore, the version of the Accused himself is different for taking defence. Further, in the cross-examination he stated that, he has not filed any complaint with regard to stolen or missing Cheques and also not given paper publication with respect of those Cheques. 17 C.C.No.55133/2021 Therefore, the defence taken by the Accused is not believable and acceptable.
29. In the present case also the Accused has not placed any credible evidence to rebut the presumption. Further, if the Accused failed to rebut the presumption by adducing any cogent evidence, the presumption u/Sec.139 of N.I. Act shall operate.
30. It is useful to refer the decision of (2010 ) 11 SCC 441 in the case of Rangappa V/s. Sri Mohan wherein, the Hon'ble Apex Court held that ;
"The Accused has to rebut the presumption u/Sec.139 , the standard of proof of doing so is that of "preponderance of probabilities". Therefore, if the Accused is able to raise a probable defence that creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The Accused can rely on the materials submitted by the Complainant in order to raise such a defence and it is conceivable that in some cases the Accused may not need to adduce evidence of his own."
31. Therefore, complainant has discharged his initial onus laid on him. When he has discharged his initial onus, it 18 C.C.No.55133/2021 raises presumption U/s 118(a) and 139 of Negotiable Instruments Act. Accused has failed to rebut the presumption either by cross-examining PW-1 or in his evidence.
32. In the instant case also, accused has due of loan amount and has failed to keep up his promise which amounts to unjust enrichment for which complainant is to be compensated.
33. Hence, I conclude that complainant is able to prove beyond all reasonable doubts that accused has committed the offence punishable U/s 138 of NI Act.
34. So, far as sentence and compensation is concern, an offence punishable under section 138 of N.I. Act, is a civil wrong and compensatory in nature, punitive is secondary, considering, the above settled principal of law with facts and circumstances of the case, which clearly reveals that, the complainant gave hand loan to the accused and towards repayment of loan amount, cheque in question of issued by the accused to the complainant, therefore, it is issued for legally recoverable debt, therefore considering the nature of transaction, duration of pendency, litigation expenses, I am 19 C.C.No.55133/2021 opinion that, if sentence of Fine of Rs.4,45,600/- (Rupees Four Lakhs Forty-five Thousand and Six Hundred only) is imposed that would meet the ends of justice, accordingly, the accused is hereby sentenced to pay a fine of Rs.4,45,600/- (Rupees Four Lakhs Forty-five Thousand and Six Hundred only), out of that, the complainant is entitled for sum of Rs.4,40,600/- (Rupees Four Lakhs Forty Thousand and Six Hundred only) as a compensation as per Sec.357(1) of Cr.P.C., remaining amount of Rs.5,000/-, is to be appropriated to the state, in case of default the accused shall under go simple imprisonment for a period of 6 months. Accordingly, the Point No.1 is answered in Affirmative.
35. POINT No.2 : In view of discussion held in Point No.1, I proceed to pass the following :
ORDER Acting U/S 255(2) of Cr.P.C., the accused is convicted for the offence punishable Under Section 138 of Negotiable Instrument Act. Accused is sentenced to pay fine of Rs.4,45,600/- (Rupees Four Lakhs Forty-five Thousand and Six Hundred only) in default to undergo simple imprisonment for 6 months.20 C.C.No.55133/2021
Further, it is made clear that out of fine amount, Rs.4,40,600/- (Rupees Four Lakhs Forty Thousand and Six Hundred only) is to be paid to the complainant as compensation and Rs.5,000/- is ordered to be remitted to the State.
Bail bond stands cancelled.
Supply the free copy of this judgement to the Accused forthwith.
(Dictated to the stenographer, transcribed by her, corrected by me and then pronounced in the open court on this 22nd May, 2023) Digitally signed by PARVEEN A PARVEEN A BANKAPUR BANKAPUR Date: 2023.05.24 12:25:19 +0530 (PARVEEN A BANKAPUR) XXXIV ACMM, BENGALURU.
ANNEXURE
1. Witnesses examined on behalf of Complainant:
P.W.1 Mr. Satish Kumar P.S.
2. Documents marked on behalf of complainant:
Ex.P.1& 2 Cheques Ex.P.3 & 4 Bank endorsements Ex.P.5 Office copy of Legal Notice Ex.P.6& 7 Postal receipts Ex.P.8 & 9 Returned RPAD covers
3. Witnesses examined on behalf of Accused :
DW1 Mr. Deepu P.S.
4. Documents marked on behalf of Accused: NIL Digitally signed by PARVEEN A PARVEEN A BANKAPUR BANKAPUR Date: 2023.05.24 12:25:25 +0530 (PARVEEN A BANKAPUR) XXXIV ACMM, BENGALURU.