Bangalore District Court
M/S Margadarsi Chits (K) Pvt Ltd vs Puttaswamy on 22 November, 2024
C.C.NO.28404/2019
0
KABC030877062019
Presented on : 28-11-2019
Registered on : 28-11-2019
Decided on : 22-11-2024
Duration : 4 years, 11 months, 24 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 22nd DAY OF NOVEMBER-2024
C.C.NO.28404/2019
Complainant: M/s. Margadarsi Chits (K)
Pvt., Ltd., R/o at No.801 & 802,
South Block, Manipal Center,
Dickenson Road, Branch Jayanagar,
R/by its Foreman, Sri.R.Sivakumar.
(By Sri.P.P.Jayakumara.,Adv.,)
V/s
Accused: Mr.Puttaswamy S/o Kalegowda,
Proprietor, M/s. Sneha Marketing,
No.34, 1st Main, 1st Cross, Bhage
Gowda Layout, Veerabadra Nagar,
Bangalore-560085.
Also at : Mr.Puttaswamy S/o Kalegowda,
No.103/104, 4th Main, 2nd Cross,
Near Prasanna School, Muneshwara
Layout, Kaveripura, Bangalore-560079.
(By Sri.Manjunatha.N.,Adv.,)
C.C.NO.28404/2019
1
:JUDGMENT:
This case arises out of the private complaint filed under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant is a reputed chit company registered under the companies act and they are in the business for promoting and conducting chits as per the provisions of the chit funds Act. The accused is a subscriber for a chit No.LT012D JN-02 for a chit value of Rs.25,00,000/- payable at Rs.50,000/- for 50 months. Further stated that the accused is participated in the chit auction and was declared as a prize bidder and received the prize money of Rs.15,00,000/- after deducting the bid amount on 18.11.2013. Thereafter the accused along with other guarantors executed an Ondemand promissory note, surety form, guarantee bond and other relevant documents. After receiving the prize amount the accused was not regular in payment of the chit installments and further he has paid 14 installments, and thereafter he became a defaulter. Since the accused failed to make the payments, the complainant company was forced to issue a letter/legal notice to the accused and other guarantors. Thereafter filed a dispute before the Deputy Registrar of Chits at Bangalore in dispute No.DRB/CZ/CFS/278/2015-16 for C.C.NO.28404/2019 2 recovery of balance amount of Rs.23,65,864/-. The deputy registrar of chits has issued the notice to the accused and guarantors and then passed the award and issued the recovery certificate. Thereafter the complainant filed an execution before the City Civil Court, Bangalore in Ex.No.2569/2017 for executing the said order. After service of the notice the Hon'ble court issued the cause notice against the JDR No.2 to 8, then issued the movable warrants against the JDR No.7, at that time, the accused came forward and issued the cheque No.067109 dated: 31.03.2019 for Rs.16,00,000/- drawn on Allahabad Bank, Banashankari branch, Bangalore towards part payment with respect to execution claim and requested to not to proceed the above said petition. The complainant had presented the said cheque for realization through its banker the Karur Vysys Bank, Jayanagar Branch, Bengaluru. But the said cheque was dishonored on 09.04.2019 as "Funds Insufficient". Thereafter on 25.04.2019 the complainant got issued a demand notice to the accused through its counsel calling upon him to pay the cheque amount within 15 days from the date of receipt of the notice. The said notice was returned on 27.04.2019 as "Door lock intimation delivered". Inspite of issuance of the notice the accused neither reply to the notice nor paid the cheque amount.
As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the C.C.NO.28404/2019 3 present complaint came to be filed before this court on 04.06.2019.
3. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R No.9857/2019. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 28.11.2019 to register the case in Register No.III.
4. Thereafter, summons was issued to the accused and he has appeared before the court through counsel and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. The complainant in support of its case, have examined its Manager as PW.1 and got marked 18 documents at Ex.P.1 to 18 and closed its side.
6. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C., was recorded. He has denied the incriminating evidence appearing against him. In his defence the accused examined himself as DW.1 and no documents were marked on his behalf.
7. I have heard the arguments on both the sides C.C.NO.28404/2019 4 and perused the written arguments submitted by both the parties and also perused the material placed on record.
8. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-Ex.P.11 towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.11 was dishonored for the reason "Funds Insufficient" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5.What order?
9. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
C.C.NO.28404/2019 5 :REASONS:
10. POINT NO.1 AND 2: These points are inter- related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken both points together for common discussion. The case of the complainant is that he was acquainted with the accused. The complainant is a chit company registered under the companies act and they are in the business for promoting and conducting chits as per the provisions of the chit funds Act. The accused is a subscriber for a chit No.LT012D JN-02 for a chit value of Rs.25,00,000/- payable at Rs.50,000/- for 50 months. The accused has participated in the chit auction and was declared as the prize bidder and received the prize money of Rs.15,00,000/- after deducting the bid amount. The accused along with other guarantors executed relevant documents, in favour of the complainant company. After receiving the prize amount the accused was not regular in payment of the chit installments, further he has paid 14 installments, and thereafter he became a defaulter. Since the accused failed to make the payments, the complainant company was forced to issue a letter/legal notice to the accused and other guarantors. Thereafter filed a dispute before the Deputy Registrar of Chits at Bangalore for recovery of balance amount of Rs.23,65,864/-. The deputy registrar of chits has issued C.C.NO.28404/2019 6 the notice to the accused and other guarantors and then passed the award and issued the recovery certificate. Thereafter the complainant filed an execution before the City Civil Court, Bangalore for executing the said order. After service of the notice the Hon'ble court issued the cause notice against the JDR No.2 to 8, then issued the movable warrants against the JDR No.7, at that time, the accused came forward and issued the cheque in question towards part payment with respect to the execution claim and requested to not to proceed above said petition. The complainant had presented the said cheque for realization through its banker. But the said cheque was dishonored as "Funds Insufficient". Thereafter the complainant got issued a demand notice to the accused through its counsel calling upon him to pay the cheque. The said notice was returned as "Door lock intimation delivered". Inspite of issuance of the legal notice the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
11. At this juncture, it is necessary to go through the provisions of N.I.Act before proceeding further. The provisions under Section 118(a) and 139 of the Act., 1881 are extracted and they reads thus;
C.C.NO.28404/2019 7 "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.
(b) as to date:- that every Negotiable Instrument bearing date was made or drawn on such date;
"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."
12. On plain perusal of the provisions under section 118(a) and 139 of the N.I.Act., as extracted hereinabove, it can be seen that initially the presumptions constituted under these two provisions favour the complainant. However, it is open to an accused to raise a defence to rebut the statutory presumptions. An accused can raise a defence, wherein the existence of legally enforceable debt or liability can be contested.
13. It is also well established that an accused for discharging the burden of proof placed upon his under a statute need not examine himself. He may discharge C.C.NO.28404/2019 8 his burden on the basis of the materials already brought on record. An accused have constitutional rights to maintain silence. Standard of proof on part of the accused and that of the prosecution in a Criminal case is different. The prosecution must prove the guilt of an accused beyond all reasonable doubts, the standard of proof so as to prove a defence on the part of an accused is "Preponderance of probabilities".
14. Under the light of above extracted provisions of the Act, I have perused the oral and documentary evidence on record. In support of the case, the complainant's have examined its Manager as P.W.1 and 18 documents were marked at Ex.P.1 to 18. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the resolution dated:06.02.2006. Ex.P.2 is the certified copy of the Authorization letter. Ex.P.3 is the chit agreement executed by the accused. Ex.P.4 is the certified copy of the On demand promissory note executed by the accused and his guarantors. Ex.P.5 is the Voucher. Ex.P.6 is the certified copy of the statement of account. Ex.P.7 is the certified copy of the award dated:
07.08.2017 passed by the Deputy Registrar. Ex.P.8 is the certified copy of the recovery certificate issued by the Deputy Registrar. Ex.P.9 is the certified copy of execution petition No.2569/2017. Ex.P.10 is the certified copy of the order sheet in execution petition.
Ex.P.11 is the cheque issued by the accused in favour C.C.NO.28404/2019 9 of the complainant dated: 31.03.2019 for Rs.16,00,000/-. Ex.P.11(a) is the signature of the accused. Ex.P.12 is the bank memo dated: 09.04.2019 informing the dishonor of the cheque as "Funds Insufficient". Ex.P.13 is the office copy of legal notice dated: 25.04.2019. Ex.P.13(a) and 13(b) are the postal receipts. Ex.P.14 and 15 are the returned legal notices. Ex.P.14(a) and 15(a) are the returned postal covers. Ex.P.16 and 17 are the track consignments. Ex.P.18 is the complaint.
15. I have perused the exhibits on which the complainant have placed their reliance. On perusal of the exhibits, it is clear that the cheque in question was presented for encashment within its validity. The bank endorsement with a shara "Funds Insufficient". The complainant issued the legal notice within one month from the date of receipt of memo. The notice was returned as "Door lock intimation delivered". The complaint was filed on 04.06.2019, which is within limitation. The transaction with the complainant is admitted and issuance of the cheque and the signature on the cheque-Ex.P.11 is also admitted. Therefore, the documents on record clearly shows that the complainant have complied the ingredients of section 138(a) to (c) of the N.I.Act. Therefore, the presumptions under section 118 and 139 of the N.I.Act, arise in favour of the complainant. The presumptions are rebuttable and the burden is on the accused to rebut C.C.NO.28404/2019 10 the presumptions. The presumption is that the cheque was issued for legally enforceable debt/liability. However actual existence debt/liability can be contested. The accused can rebut the presumptions by raising probable defences and proving it relying on the evidence of the complainant or by leading his direct evidence.
16. The case was seriously contested by the accused and the service of notice was disputed. The notice was not served on the accused. It was returned with a shara 'Door lock intimation delivered'. The accused also denied the service of notice. The counsel for the accused cross-examined PW.1 in respect of non service of notice. But PW.1 denied the same. Further contended that the notice sent to the accused not served'; that the accused has no knowledge of the notice as it was not served on him; that the accused did not give reply notice as the notice was not served on him; that he did not produce any documents to show that the accused was not residing at the said address and that the accused did not issue reply notice as he was not residing at the said address. The counsel for the accused argued that no legal presumption can be raised as the notice was sent to the wrong address and the accused was not residing at the said address. When the notice at Ex.P.13, wherein the name of accused is appearing, was confronted.
C.C.NO.28404/2019 11
17. On perusal of Ex.P.13, it is clear that the name of the accused and two addresses is appearing in the notice. The same notice was sent to the accused. The accused not given reply. There is no evidence on record to show that the accused was residing at some other address other than the address mentioned in the notice at Ex.P.13. The above discussion clearly shows that the address mentioned in the notice is the correct address of the accused. As the notice was given to the accused and the same notice was sent to him through separate RPAD, an inference can be drawn that the notice was served on the accused. Further the address mentioned in the notice being the correct address of the accused, the presumption as per Section 27 of General Clauses Act can be drawn. It states that the notice sent through post shall be deemed to be served, if it is properly addressed to a person to whom it is sent. Therefore, even though the notice sent to the accused through separate RPAD and returned with a postal shara 'Door locked intimation delivered', it is to be considered as deemed service of notice. Even otherwise as per the judgment of the Hon'ble Supreme Court of India in Crl Appeal No.767 of 2007 (Arising out of SLP (Crl) No.3910 of 2006 between C.C Alavi Haji V/s Palapetty Muhammed and another decided on 18.05.2007, wherein it has been held para No.17 as under;
C.C.NO.28404/2019 12
17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under section 138 of the Act, cannot obviously contend that there was no proper service of notice as required u/s.138, by ignoring statutory presumption to the contrary under section 27 of the G.C.Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case (supra), if the 'giving of notice' in the context of Clause (b) of the proviso was the same as the 'receipt of notice' a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act.
18. In a nutshell it can be said that the statutory notice is an opportunity given to the accused to make payment and avoid the consequences of 138 of N.I.Act. In the case on hand, the summons issued to the accused returned as "door locked" and "no such person" and thereafter he appeared before the court and contested the case by taking all probable defences. Therefore he cannot take the shelter of C.C.NO.28404/2019 13 statutory requirement of service of notice to avoid the consequences of section 138 of N.I.Act. The complaint was filed on 04.06.2019, which is within limitation. The accused admitted the issuance of cheque in favour of the complainant and signature in the cheque. It is his defence that the blank cheque was issued to the complainant for the purpose of security. Therefore, the documents on record clearly show that the complainant have complied the ingredients of Section 138(a) to (c) of the N.I.Act. Therefore, the presumptions under 118 and 139 of the N.I.Act arise in favour of the complainant. The presumptions are rebuttable and the burden is on the accused to rebut the presumptions. Once the issuance of cheque and signature are proved, the presumption arises in respect of the fact that the cheque was issued for legally enforceable debt/liability. The accused can rebut the presumption by raising probable defence and proving it relying on the evidence of the complainant or by leading his direct evidence.
19. In order to prove his defence, the accused examined himself as DW.1 and no documents were marked on his behalf. In his evidence he has deposed defence taken by him. Further deposed that he was chit subscriber in chit No.LT12D for a chit value of Rs.25,00,000/- over a period of 25 installments. Further deposed that on 21.07.2013 he was bid the said chit for Rs.15,00,000/-. The complainant has paid the amount of C.C.NO.28404/2019 14 Rs.11,92,000/- and the said chit amount has paid after 4 months. Further deposed that he has paid total 16 installments for Rs.50,000/- each. He further deposed that he has subscribed another chit for Rs.25,00,000/- and he has paid Rs.3,50,000/-. But he has not bid the said chit. Further deposed that the complainant informing him that they will adjust the said amount to this chit. Further deposed that the complainant not paid the dividend amount. Further deposed that in respect of chit transaction he given chit agreement and blank signed cheque for the purpose of security. Further deposed that he is not aware the case filed before the Deputy Registrar of Chits and he had not received any notice in that case. Further deposed that he has not received any notice of this case. Further deposed that he was not residing in the address shown by the complainant. Further deposed that he is residing at Pattegar Palya, Kamakshipaly, Kaveripura, Bengaluru-79. Further deposed that he has already paid entire amount to the complainant. The complainant have misused the security cheque and filed this false case. Therefore, he prays to dismiss the case and acquit him.
20. The accused has taken the contention that he had issued the blank cheque in favour of the complainant company for the purpose of security. Further the complainant's have misused the said blank cheque and filed this false complaint against him. Further he contended that he never admitted regarding C.C.NO.28404/2019 15 repayment of amount and there is no transaction between the complainant and the accused as alleged by the complainant. Further defence that he has already paid entire amount to the complainant. The accused has specifically denied having agree to repay the his outstanding balance amount of Rs.16,00,000/-. But the accused in his defence has not disputed Ex.P.11 being his cheque drawn on the account of the accused. He does not seriously dispute his signature on the said cheque.
21. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused is a subscriber for a chit value of Rs.25,00,000/- payable at Rs.50,000/- for 50 months. The accused participated in the chit auction and was declared as the prize bidder and thereafter he has received the prize money of Rs.15,00,000/- after deducting the bid amount. Further argued that the accused along with other guarantors have executed relevant documents at the time of receiving the amount. Further argued that after receiving the prize amount the accused has paid 14 installments and thereafter he became a defaulter. Hence, the complainant was C.C.NO.28404/2019 16 forced to issue a reminder legal notice to the accused and his guarantors. Thereafter, the complainant filed a dispute before the Deputy registrar for chits. The deputy registrar for chits issued the notice to the accused and guarantors and then passed the award and issued the recovery certificate. Further argued that the complainant filed an execution case before the Hon'ble City Civil at Bangalore in Ex.No.2569/2017 for executing the order. After service of the notice the Hon'ble court issued the cause notice against the accused and JDR No.2 to 8 and then issued the movable warrants against JDR No.7. Further argued that at that time the accused came forward and issued the cheque in question towards part payment to execution claim.
22. He further argued that the accused has not denied Ex.P.11 being his cheque drawn on his account. When the signature is not seriously disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the evidence of the said witness. The defence have failed to rebut the presumption under section 139 N.I.Act. He further argued that the accused has failed to produce any believable evidence that he has already paid entire amount to the complainant and the cheque in question was issued only for the purpose of security. Under section 139 of N.I.Act, there is a C.C.NO.28404/2019 17 presumption that the cheque has been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.11 being his cheque drawn on his account. The said presumption is available to the complainant. Further argued that the accused has failed to prove the very fact that the cheque was misused by the complainant and filed this false case against him. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that he had issued the blank cheque to the complainant for the purpose of security. As such, very defence of the accused is not believable. The complainant proved the case.
23. The learned counsel for the complainant has filed written argument. In his argument he has reiterated the brief facts of the case. Further submits that the accused defense is that security cheque misused by the complainant, but he admits the issuance of cheque and signature in the cheque. Further he paid the entire chit amount, hence question of payment does not arise, but he paid 16 installments only, it shows that he is under the wrong impression. Further submits that as per the registered chit C.C.NO.28404/2019 18 agreement he has to pay 50 installments but he paid only 14 installments, hence his defence is for away from the true fact. Further defence of the accused is that he was the member in another chit and he paid Rs.3 ½ lakhs in said chit and he did not continue in the said chit he demands to adjust the said amount to this chit. But this fact is created for the purpose of this case only, as per law there is no option to adjust the said amount to another chit, if this fact is true, he can claim the said amount before the proper court and under proper law. The accused created cock and bull story for escape from this case, if it is so, he needs to produce any documents to show that he paid Rs.3 ½ lakhs amount to the complainant. Further submits that the complainant company did not pay any dividends, but as per the registered chit agreement says "if the default is continued consecutively for a period of 3 months from the prized subscriber lose the future dividends and the benefits of paying the future subscriptions in installments". Here, he failed to pay the installments from 15th installments, further more up to 14 installments he made a delayed payment, hence the company collected an amount of Rs.9,000/- as penalty. Therefore, question of demand dividends does not arise. Further the complainant made payment after four months, this fact may true but as per the agreement condition, his duty to provide the proper surety then the complainant duty to pay the chit amount, in the above C.C.NO.28404/2019 19 case, the accused provide the surety after two months then immediately, the company paid the chit amount after standard deductions as per law (agreement conditions).
24. It is further submits that the defence of the accused is that he paid the entire amount, it shows that he admits the transaction and his defence is he paid the entire chit amount but he said he paid only 16 installments. Hence, burden lies on the accused to show that how he paid entire chit amount of Rs.25,00,000/-. In this case he did not produce any documents in that regard. Further the defence of the accused is that he did not receive any legal notice from the complainant side and further he had no knowledge about the recovery suit and pending of execution case. But in cross examination of DW.1, he admits the address in RPAD cover and cause title of the complaint and he further the said property belong to him but he said he left the said address, but all the transactions says, he was in said address only. Further he appeared before the Deputy Registrar Court and filed Vakalath and then he appeared before the execution court this fact reflected in marked exhibits in this case. It shows that he played before this court, hence this court may impose the double the cheque amount as penalty. Further the defence of the accused is that he was not received the legal notice, but as per the postal shara C.C.NO.28404/2019 20 the said legal notice served to the accused, furthermore this court issued the summons to same address and he received the same and appeared before this court. Further submits that the complainant company registered company, chit agreement in the above case is also registered before the concerned authority, before filing the present case the complainant issued the proper legal notice to the accused. Hence, the complainant comply all the procedure.
25. It is further submits that in the cross examination he indirectly admits the transaction and he further admits he received the amount and he try to escape from the liability. Further the accused issued the cheque before the court ameena and requested to stop the execution of movable warrant against his surety and they played before this court. Further based on the decree in recovery suit, the complainant filed an execution petition before the City Civil Court at Bengaluru in Ex.No.2569/2017 for claiming an amount of Rs.32,75,329/- as on 15.09.2017, the said petition still pending for executions. Hence, he needs to pay execution claims also. Above disputed cheque issued for part payment in execution petitioner at the time of execute the movable warrant. Further the complainant produce all the recovery suit documents in this case and all are marked as Ex.P.7 to 17. Hence, records reveal that the complainant is entitled to the presumption available under section 118(a) and 138 of C.C.NO.28404/2019 21 N.I.Act. Further in his written argument he has relied upon the citations reported in 2010(1) DCR 706, Crl.R.P.No.814/2021 dated: 24.06.2024, (1999) 8 SCC 221, LAWS (KAR)-2013-6-4 and ILR 2002 KAR 181. In view of the fact and circumstances of the above complaint and case laws laid down by the higher courts, the complaint is maintainable and deserved to be allowed. Hence, he prays to allow the complaint and convict the accused.
26. The learned counsel for the accused argued that the accused had issued the blank cheque to the complainant for the purpose of security. Further the complainant have misused the said blank cheque and filed false complaint against the accused. Further argued that the accused has never admitted regarding repayment of the said amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused has specifically denied having agree to repay the amount of Rs.16,00,000/- to the complainant. Further argued that the accused already paid entire amount to the complainant. Further argued that there is no due from the accused to the complainant. He further argued that the complainant had collected the blank cheque and agreement from the accused for the security purpose. Further the accused has paid entire installments, hence he is not liable to pay the amount covered under the cheque. Further argued that the complainant miserably C.C.NO.28404/2019 22 failed to prove the complaint averments. The complainant unable to prove that the subject cheque was issued in discharge of duly enforceable debt/liability. The complainant have not come with a clean hands before this court. Further argued that the complainant in order to harass the accused fill up the cheque and presented to the bank. Hence, the accused is not liable to pay the cheque amount.
27. It is further argued that the evidence placed before this court clearly shows that the complainant in order to make illegal monetary gain has presented a blank cheque given as security, by filling up the cheque and for the purpose of this case he has created documents and no transaction has been carried out between the complainant and the accused as alleged in the complaint. Hence, the accused has proved that the cheque was issued as a security and not for discharge of any legally enforceable debt/liability. For an offence under section 138 of N.I.Act to attract, the accused must have issued the cheque to discharge any legally enforceable debt/liability. But in the present case, since there is no due from the accused thus there lies no legally enforceable debt. Also the accused has successfully managed to rebut the evidence of the complainant with detailed cross examination and thereby rebutting the presumption under section 139. On the date of presentation of the cheque, the accused was not in due of Rs.16,00,000/-. The complainant has C.C.NO.28404/2019 23 not produced any material documents to show that when the subscriber/accused defaulted monthly installment before presentation of the cheque. Thus the complainant failed to prove that the accused had issued the subject cheque for a sum of Rs.16,00,000/-. The complainant has misused the cheque obtained from the accused as security. Therefore, issuing the subject cheque for repayment of the due is far away from truth. The complainant unable to prove the case that the accused had issued the cheque to them in lieu of liability recoverable debt. Further the accused created doubt against the story putforth by the complainant in the complaint. The pharse "debt or other liability" means a legally enforceable debt or other liability. There was no convincing evidence from the complainant's side as to existence of any existing debt/liability to be discharged by the accused. The accused has discharged the onus that the subject cheque was not received by the complainant for any existing debt/liability. Hence, the accused is entitled to acquittal.
28. The learned counsel for the accused has filed written argument. In the written argument he has submits that the complaint filed by the complainant against the accused under section 200 of Cr.P.C., R/w section 138 of N.I.Act for amount of Rs.16,00,000/-. Further submits that the accused subscribed a chit ticket No.LT012D JN-02 for a chit value of C.C.NO.28404/2019 24 Rs.25,00,000/- which is payable at the rate of Rs.50,000/- per month for a period of 50 months, the accused was successful bidder only Rs.15,00,000/- after deduction of dividend and commission and the complainant chit has paid only Rs.11,92,243/- as per Ex.P.6. Further the accused participate in the auction on 21.07.2013 but the complainant given amount on 18.11.2013 after lapse of 4 months from the date of auction as per Ex.P.5, it is completely violation of chits act but the accused has repaid the entire bid amount and the same is admitted by the complainant and the accused has paid 14 installments in his complaint. Further in para 8 of the complaint he has stated after service of notice Hon'ble City Civil Court issued cause notice against the accused and JDR No.2 to 8 then issued the movable warrant against JDR No.7 not the accused and JDR No.7 no way relationship with the accused at that time the accused came to the complainant company officer and personally issued the cheque but during cross examination of PW.1 the accused has issued the cheque at the time of execution movable warrant at the place of JDR No.7 and court ameena endorsed the same. Further in para 11 of the complaint the legal notice was issued to the accused through RPAD, the said RPAD was served with postal shara "Door locked intimation delivered on 27.04.2019 but as per Ex.P.16 the item returned validity period exceeded and the complainant has sent legal notices to C.C.NO.28404/2019 25 two addresses not one address and another notice has been returned for the reason not delivered no such person in the address as per Ex.P.17. But the accused not residing both address at the time of issued legal notice. Hence, the complainant not complied under section 139 of N.I.Act.
29. It is further submits that Ex.P.16 and 17 produced by the complainant i.e., postal track consignments, it is xerox copies not put seal and signature from the concerned authorities and not filed any 65B of Indian Evidence Act pertaining to electronic documents. During the cross examination of PW.1 witness also admitted the same. Further the complainant was collected so many documents from the accused and other guarantors and blank signed cheque from the accused at the time of given the bid amount and the complainant was misused the cheque and filed false complaint against the accused and during the cross examination the witness was categorically admitted the documents collected at the time of given the amount. Further the points to be proved the accused is not liable to pay the cheque amount in these points i.e., the complainant is not proved issued legal notice to the accused. The complainant not filed any affidavit under section 65-B of Evidence act regarding Ex.P.16 & 17. Further submits that in the complaint that the accused has came to office and issued cheque but cross examination of the C.C.NO.28404/2019 26 accused issued cheque at the time of execution movable warrant against JDR No.7. As per admission of the complainant the accused paid 14 installments and the complainant deducted the amount another chit No.LT 013 DJ No.2 for Rs.3,50,000/- belongs to the accused and the complainant he has not paid dividend amount to the accused. The complainant not produced any notice before this court and the accused failed to pay the EMIs but during the cross examination of PW.1 has admitted and produced the same. Further all the above points clearly says the accused no dues any cheque amount to the complainant. The accused issued cheque for security purpose only. Hence, he prays to dismiss the complaint and acquit the accused.
30. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he had issued the cheque in favour of the complainant. It is not disputed that the complainant is a private limited chits company and the accused is a chit subscriber and he had issued the cheque in favour of the complainant. Whereas, the accused has contended that the cheque was given for security measure. When he had given the cheque, which was blank. The accused has specifically denied having debt/liability had issued the cheque on 31.03.2019 towards discharge of any debt/liability. He C.C.NO.28404/2019 27 contends that the blank cheque given by him for the purpose of security as was misused by the complainant and a false complaint was filed.
31. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its Manager as PW.1 and 18 documents were marked at Ex.P.1 to 18. In chief examination P.W.1 has repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.11 being his cheque drawn on his account. The said presumption is available to the complainant.
32. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which cheque was issued. In order to prove his defence, the accused has failed to produce any documentary evidence before this court.
33. Since, the presumption under section 139 of C.C.NO.28404/2019 28 N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case. Further the accused has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused is that the cheque was given for security. Further defence taken by the accused is that he has already paid entire chit installments to the complainant. Except, the said defence, he has not produced any materials to prove such defence. If he had paid entire amount to the complainant and further he had given the blank cheque to the complainant for the purpose of security, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the alleged cheque. On which date he came to knew about the alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is having knowledge of the financial transaction, why he has given the blank cheque to the complainant without anticipating the consequence is not explained by him. So also, he has C.C.NO.28404/2019 29 not stated anything as to what steps he took to receive back the blank cheque. Moreover, immediately after the alleged blank cheque misused by the complainant he has not lodge complaint before concerned police station. No steps have been taken to receive back the blank cheque, after he came to know about the same. Further on perusal of Ex.P.3, 4 and 6 it reveals that the accused was a subscriber in chit group No.LT012D JN- 02 for a chit value of Rs.25,00,000/- and monthly subscription of Rs.50,000/- each for 50 months. But the accused has not denied the same. Further the accused in order to prove his defence he has not produce any documents before this court.
34. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt or liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down C.C.NO.28404/2019 30 in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.11 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
35. Further the accused has taken the defence that at the time of receiving the chit amount he has given the blank cheque to the complainant for the purpose of security. Further he has taken the defence that he has already paid entire amount to the complainant. But the complainant instead of returning the security cheque to the accused they have misused the same. Hence, an offence punishable under section 138 of N.I.Act is not attracted. In this regard once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that cheque was issued by the drawer for legally payable debt/liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that; once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this C.C.NO.28404/2019 31 case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, but without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
36. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
37. In the case of Kalamani Tex and another V/s P.Balasubramanian, reported in (2021) 5 SCC 283, the C.C.NO.28404/2019 32 Hon'ble Supreme Court has observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
38. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
39. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reason stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has not produced any documents in this regard.
40. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of the security cheque and filing a false case is not possible.
C.C.NO.28404/2019 33 The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said cheque and had not return the same, inspite of collecting cheque leaves from him, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheque. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.11. Further he could have issued a notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of security cheque against the complainant.
41. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.11 being his cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability.
C.C.NO.28404/2019 34 From the evidence of P.W.1 and also cheque return memo-Ex.P.12 it is established that the cheque was dishonor for the reasons "Funds Insufficient''. A legal notice being issued as per Ex.P.13 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice send by the complainant on his address. But, the accused failed to reply the notice, immediately after he received the demand notice. Thereby, he could have asserted his defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his address. When the accused has not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
42. It is not the contention of the accused that thereafter he has paid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period, as such the accused has committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within C.C.NO.28404/2019 35 the period of one month after the accused failed to repay the cheque amount. Even he did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In view of judgment of the Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, reported in 2010 (5) SCC 590, it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he wants to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
43. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under C.C.NO.28404/2019 36 section 139 of N.I.Act, cannot be discharged. The principle of law laid-down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
44. As per the version of the accused is that he has nowhere denied transaction. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that he has issued the cheque-Ex.P.11 and even after he has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. In case of dishonor of the cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant that the accused had issued the cheque-Ex.P.11 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him. Therefore, the accused has failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
C.C.NO.28404/2019 37
45. PW.1 in his evidence has specifically deposed that the accused is the subscribed for a chit bearing No.LT012D JN-02 for a chit value of Rs.25,00,000/- payable at Rs.50,000/- for 50 months. Further deposed that the accused participated in the chit auction and was declared as the prize bidder and received the prize money of Rs.15,00,000/- after deducting the bid amount. Further deposed that the accused along with other guarantors have executed an Ondemand promissory note, surety form, guarantee bond and other relevant documents in favour of the complainant. Further deposed that after receiving the prize amount the accused was not regular in payment of the chit installments and further the accused paid 14 installments and thereafter became defaulter. Further deposed that in order to towards part payment with respect to execution claim the accused had issued the cheque in question. The accused has failed to get the tender, this is not disputed by the accused. So also it is not in disputed that the complainant and the accused are known to each other, some point of period. Further the accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction and other documents no consequences to disbelieve the case of the complainant. With these reasons, I answer point No.1 and 2 in the Affirmative.
C.C.NO.28404/2019 38
46. POINT NO.3 AND 4: In order to avoid repetition of facts, these points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. Ex.P.11 being his cheque drawn on the account of the accused is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after service of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case if the accused has issued the blank cheque in favour of the complainant for the purpose of security and why he has not produced any documents. After service of notice the accused has not paid the said amount and failed to give reply to the said notice. Hence, the present complaint came to be filed before the court on 04.06.2019 within the period of one month from the date of cause of action. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements under section 138 C.C.NO.28404/2019 39 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
47. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond of the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.16,50,000/- (Rupees sixteen lakhs fifty thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.16,35,000/-
C.C.NO.28404/2019 40 (Rupees sixteen lakhs thirty five thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.15,000/- (Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 22 th day of November 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.11.26 10:05:39 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.Sivakumar.
List of documents marked on behalf of the complainant:
Ex.P.1 : Resolution.
Ex.P.2 : Certified copy of authorization.
Ex.P.3 : Chit agreement.
Ex.P.4 : Certified copy ondemand promissory note.
Ex.P.5 : Voucher.
Ex.P.6 : Certified copy of statement of account.
Ex.P.7 : Certified copy Award.
Ex.P.8 : Certified copy of the recover certificate.
Ex.P.9 : Certified copy of the execution petition.
C.C.NO.28404/2019
41
Ex.P.10 : Certified copy of the order sheet.
Ex.P.11 : Cheque.
Ex.P.11(a) : Signature of the accused.
Ex.P.12 : Bank endorsement.
Ex.P.13 : Office copy of legal notice.
Ex.P.13(a) & 13(b) : Postal receipts. Ex.P.14 & 15 : Returned legal notices. Ex.P.14(a) & 15(a) : Returned postal covers.
Ex.P.16 & 17 : Track consignments. Ex.P.18 : Complaint.
List of witnesses examined on behalf of the accused:
DW.1 : Mr.Puttaswamy List of documents marked on behalf of the accused:
-Nil-.
Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.11.26 10:05:48 +0530 XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.28404/2019 42 22.11.2024 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond of the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.16,50,000/- (Rupees sixteen lakhs fifty thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.16,35,000/- (Rupees sixteen lakhs thirty five thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.15,000/- (Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.