Bangalore District Court
M/S Navkar Inter Fab vs M/S Kriyansh Textiles Fabric And ... on 6 December, 2024
C.C.NO.27551/2023
0
KABC030482722023
Presented on : 26-10-2023
Registered on : 26-10-2023
Decided on : 06-12-2024
Duration : 1 years, 1 months, 11 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., Bangalore City.
DATED; THIS THE 06th DAY OF DECEMBER-2024
C.C.NO.27551/2023
Complainant: M/s Navkar Inter Fab,
(partnership firm), No.133/A,
2nd Cross, Telecom Layout,
K.P.Agrahara, Bengaluru-560053.
R/by its Managing Sales/Authorized person
Goutham Kanunga S/o Neinmal.
Age: 47 years.
(By Sri.S.Chennakesavulu.,Adv.,)
V/s
Accused: 1.M/s.Kriyansh Textiles Fabric,
R/by its Proprietor, Rachana R.Jain.
2. Rachana R.Jain W/o Raj Kumar Jain,
Age: 35 years, Proprietor of
M/s. Kriyanshi Textiles Fabric.
Both are at: No.7, 3rd Cross,
Ramachandrapuram, Bangalore-560021.
(By Sri.S.K.Mohan Kumar.,Adv,.)
C.C.NO.27551/2023
1
:JUDGMENT:
This case arises out of the complaint filed by the complainant against the accused 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 partnership firm being a juristic person has to be represented by a natural person and is represented by one of the Manager sales/Authorized person, who is the person aware of the day today business of the complainant's firm. Further the complainant is the supplier of the fabric interlinings and other materials and the accused is the purchaser from the complainant. Further stated that against the orders placed by the accused, the complainant had supplied the fabric interlinings and other materials and the accused had received the said goods, after receiving the said goods the accused made some part payment. After deducting the said part payment, the accused is due to the complainant for a sum of Rs.12,90,129/-. Further stated that after receiving the said goods the accused had not paid the due amount. After several requests the accused had issued the cheque No.000098 dated:
20.06.2023 for Rs.1,19,300/-, cheque No.000032 dated: 19.07.2023 for Rs.1,84,736/-, cheque No.000034 dated: 15.08.2023 for Rs.1,38,404/- and cheque No.000095 C.C.NO.27551/2023 2 dated: 17.06.2023 for Rs.60,545/- all were drawn on Bank of Baroda, Dr.Rajkumar Road Branch, Bangalore as part payment. As per the request of the accused, the complainant had presented the first three cheques for encashment through its banker Punjab National Bank, Vijayanagar Branch, Bengaluru. But the said cheques were dishonored on 24.08.2023, 09.08.2023 and 17.08.2023 as "Funds Insufficient". Thereafter, on 05.09.2023 the complainant got issued a legal notice to the accused through its counsel, calling upon them to pay the cheques amount within 15 days from the date of receipt of the notice. The said notices were not received by the accused and same were returned on 07.09.2023 with a shara "incomplete address'. Inspite of issuance of the legal notice the accused neither reply to the notice nor paid the cheques 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 on 13.10.2023.
3. After the complaint was filed, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 13.10.2023 to register the case in Register No.III and it was registered as a criminal case.
4. Thereafter, summons was issued to the accused and she has appeared before the court through her C.C.NO.27551/2023 3 counsel and secured bail. She has furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. She has pleaded not guilty and make a defence.
5. The complainant in support of its case, have examined its Manager/Authorized person as PW.1 and got marked 36 documents at Ex.P.1 to 36 and closed its side.
6. After closer of the evidence of the complainant, the statement of the accused under section 313 of Cr.P.C., was recorded. She has denied the incriminating evidence appearing against her. In her defence, the accused was examined as DW.1 and 14 documents were marked at Ex.D.6 to 19. During the course of cross examination of P.W.1 05 documents were marked at Ex.D.1 to 5 by way of confrontation.
7. I have heard the arguments on both the sides 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 cheques-
C.C.NO.27551/2023 4 Ex.P.1 to 3, towards the discharge of the said legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheques-Ex.P.1 to 3 were dishonored for the reasons "Funds Insufficient" in the account of the accused No.1 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: Partly In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
10. POINT NO.1 AND 2: These two 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 these two points together for common discussion. The case of the complainant is that he was acquainted with the accused. Further the complainant is the supplier of the fabric interlinings and other materials and the accused is the purchaser from the complainant. Further against the orders placed by the accused, the C.C.NO.27551/2023 5 complainant had supplied the fabric interlinings and other materials and she had received the said goods, after receiving the said goods the accused made some part payment, after deducting the said part payment, the accused is due for a sum of Rs.12,90,129/-. After receiving the said goods the accused had not paid the due amount and after several requests, the accused had issued four cheques including cheques in question as part payment. As per the request of the accused, the complainant had presented the cheques for encashment through its banker. But the said cheques were dishonored as "Funds Insufficient" in the account of the accused No.1. Thereafter, the complainant got issued a legal notices to the accused through its counsel, calling upon her to pay the cheques amount within 15 days from the date of receipt of the notice. Inspite of issuance of the legal notice the accused neither reply to the notice nor paid the cheques 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;
"118. Presumptions as to negotiable C.C.NO.27551/2023 6 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 herein above, 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.
C.C.NO.27551/2023 7
13. It is also well established that an accused for discharging the burden of proof placed upon her under a statute need not examine herself. She may discharge her 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 have examined its Manager/Authorized person as P.W.1 and 36 documents were marked at Ex.P.1 to 36. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 to 3 are the cheques issued by the accused dated:20.06.2023, 19.07.2023 and 15.08.2023 in favour of the complainant for total sum of Rs.4,42,440/-. Ex.P.1(a) to 3(a) are the signatures of the accused No.2. Ex.P.4 to 6 are the bank memos dated: 24.08.2023, 09.08.2023 and 17.08.2023 informing of the dishonor of the cheques as "Funds Insufficient". Ex.P.7 is the office copy of the legal notice dated: 05.09.2023. Ex.P.8 are the postal receipts.
C.C.NO.27551/2023 8 Ex.P.9 and 10 are the returned postal covers. Ex.P.9(a) and 10(a) are the returned legal notices. Ex.P.11 to 33 are the tax invoices. Ex.P.34 is the outstanding statement. Ex.P.35 is the Minutes of meeting. Ex.P.36 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 cheques in question were presented for encashment within its validity. The bank endorsements with a shara "Funds Insufficient". The complainant issued a legal notice within one month from the date of receipt of memos. The notices were returned as "incomplete address" on 07.09.2023. The complaint was filed on 13.10.2023, which is within limitation. The transaction with the complainant firm is not seriously disputed. The issuance of the cheques and the signatures on the cheques-Ex.P.1 to 3 is admitted. 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 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 the presumptions. The presumption is that the cheques were issued for legally enforceable debt/liability. However, actual existence debt/liability can be contested. The accused can rebut C.C.NO.27551/2023 9 the presumptions by raising probable defences and proving it relying on the evidence of the complainant or by leading her direct evidence.
16. The case was seriously contested by the accused and the service of notice was disputed. The notice was returned as "incomplete address" on 07.09.2023 as per Ex.P.9 and 10. 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 her; that the accused did not give reply notice as the notice was not served on her; that she did not produce any documents to show that the accused was not doing business at the said address, the notice was not served on her and that the accused did not issue reply notice as she was not doing business 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 doing business at the said address. On the other hand, the counsel for the complainant cross examined DW.1 in length in respect of address of the accused, service of notice. She admitted that the address. She further admitted that after obtaining bail from this court she has given the C.C.NO.27551/2023 10 reply notice. In the notice-Ex.P.7, wherein the name of the accused is appearing, was confronted.
17. On perusal of Ex.P.7, it is clear that the name of the accused and addresses is appearing in the notice. The same notice was sent to the accused. The accused after issuance of the notice not given reply. There is no evidence on record to show that the accused was doing business at some other address other than the addresses mentioned in the notice at Ex.P.7. The above discussion clearly shows that the addresses 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 her through separate RPAD, an inference can be drawn that the notice was served on the accused. But she has not taken the same. 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.
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 "insufficient address" and C.C.NO.27551/2023 11 thereafter she appeared before the court and contested the case by taking all probable defences. Therefore she cannot take the shelter of statutory requirement of service of notice to avoid the consequences of section 138 of N.I.Act. The complaint was filed on 13.10.2023, which is within limitation. The accused admitted the issuance of cheques in favour of the complainant and signatures in the cheques. It is her defence that for the purpose of security she had issued the blank cheques to the complainant firm. 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 cheques and signatures are proved, the presumption arises in respect of the fact that the cheques were 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 her direct evidence.
19. In order to prove her defence, the accused examined herself as DW.1 and 19 documents were marked at Ex.D.1 to 19. In her evidence DW.1 deposed that her name is Rachana Lunia not Rachana.R.Jain. She is the C.C.NO.27551/2023 12 proprietor of Kriyansh Textiles Fabric. Further deposed that her office is situated at No.07, 3 rd cross. Ramachandrapur, Bengaluru-21 and her firm GST No.29AXPPJ5219E1Z9. Further deposed that she had business transaction with the Pradeep Jain and she has made approximate business of Rs.33,78,729/-. She has done business from 23/01/2021 to 28/07/2023. Further deposed that on 08.09.2023 itself she has already paid entire amount to the Pradeep Jain. Further deposed that at the time of transaction with the Pradeep Jain he obtained her GST document, PAN Card, Aadhar Card, and 04 blank signed cheques No.000095, 000098, 000032, 000034 of Bank of Baroda for the purpose of security. Further deposed that out of four cheques two cheques are O.D cheques and two cheques are current account cheques. Further deposed that she has not issued those cheques for repayment of the dues. Further deposed that after 08.09.2023 she had no transaction with the Pradeep Jain. Further she has no transaction with P.W.1 and she had not given any purchase order to him. Likewise she has not received any material. Further deposed that invoices produced before this court all are earlier transaction. After she paid all the money to Pradeep Jain, he gave to her a confirmation letter. In the confirmation letter given by the Pradeep Jain it is specifically mentioned that there is no due from M/s.Kriyansh Textiles Fabric.
C.C.NO.27551/2023 13
20. Further deposed that P.W.1 has nothing to do with the complainant company. Further deposed that she had issued the cheques to the complainant for the purpose of security and P.W.1 has obtained the said cheques from Pradeep Jain and filed false case against her. Further P.W.1 got the documents from Pradeep Jain and created a false story. P.W.1 does not do any work in the complainant company, he is not even a Manager. P.W.1 created documents and produced before this court and filed a false case against the accused. Further deposed that Pradeep Jain used to take orders from her and supply the goods. She produced the documents at Ex.D.1 to 19. Ex.D.1 is the letter head documents. Ex.D.2 is the registration certificate. Ex.D.3 is the reply notice. Ex.D.3(a) is the postal cover. Ex.D.4 is the certified copy of Minutes of meeting. Ex.D.5 is the sworn statement and cross examination in C.C.No.14762/2023. Ex.D.6 is the bank statement of the Bank of Baroda. Ex.D.7 to 11 are the cash vouchers. Ex.D.12 is the confirmation of accounts. Ex.D.13 is the GST document. Ex.D.14 is the Notarized copy of Aadhaar card. Ex.D.15 is the Notarized copy of PAN card. Ex.D.16 is the reply notice. Ex.D.17 are the postal receipts. Ex.D.18 is the acknowledgment of complaint filed against the complainant. Ex.D.19 is the certified copies of documents produced in C.C.NO.27551/2023 14 CC.No.14762/2023. Therefore, she prays to dismiss the case and acquit her.
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 cheques came to be issued by the accused. The learned counsel for the complainant has argued that from the evidence placed on record, it fact that the complainant is the supplier of the fabric interlinings and other materials and the accused is a customer. Further argued that against the orders placed by the accused, the complainant had supplied the fabric interlinings and other materials and the accused had received the same, after receiving the said goods the accused made some part payment. Further argued that after deducting the said part payment, the accused is due of Rs.12,90,129/-. Further argued that after receiving the said goods the accused failed to pay the due amount. Further argued that on several requests made by the complainant, the accused has not paid the amount to the complainant. It is further argued that after repeated request the accused in order to part payment had issued the cheques in question in favour of the complainant. He further argued that the accused No.2 has not denied Ex.P.1 to 3 being her cheque drawn on the account of the accused No.1. When the signatures of the accused C.C.NO.27551/2023 15 No.2 is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused have failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act. He further argued that the accused have failed to produce any believable evidence that she had issued the cheques in favour of the complainant firm for the purpose of security at the time business transaction with the complainant firm and also why she has not returned back the same is not clear. He further argued that section 139 of N.I.Act, there is a presumption that the cheques have been issued for discharge of legally enforceable debt/liability. In the present case, the accused No.2 has not disputed Ex.P.1 to 3 being her cheque drawn on the account of the accused No.1. The said presumption is available to the complainant.
22. Further argued that the accused No.2 has failed to prove the very fact that the cheques-Ex.P.1 to 3 were given to the complainant firm for the purpose of security. Moreover, 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 C.C.NO.27551/2023 16 as per the defence by the accused No.2 that she had given the blank cheques to the complainant firm for the purpose of security only. As such, the very defence of the accused is not believable. He further argued that the complainant had presented the said cheques for encashment as per the instructions of the accused No.2, but same were dishonor as "Funds Insufficient", thereafter the complainant got issued a legal notice to the accused. Inspite of issuance of the legal notice the accused neither reply to the notice nor paid the cheques amount, the complainant having no alternative have filed a complaint before this court. Further argued that the accused after obtaining bail from this court, she has given reply and also given complaint to the concerned police station. The defence of the accused No.2 is that she had issued the cheques to the complainant firm for the purpose of security and further taken up the defence that the complainant have misused the security cheques to harass the accused and to make a wrongful gain. Further she has taken defence that she has already paid entire amount to the complainant firm and there is no due to the complainant. But the accused in order to prove her defence she has not produced any piece of evidence except Ex.D.1 to 19 to rebut the said presumption under section 138 of N.I.Act. Therefore, the accused have committed an offence. Further argued that the C.C.NO.27551/2023 17 accused have taken another defence that the cheques in question had been issued for the purpose security at the time of business transaction with the complainant firm. Even though the issuance of cheques for security, the offence under section 138 of N.I.Act is attracted. Further argued that the amount mentioned in the cheques is the amount payable by the accused in respect of the invoices. Hence, he prays to convict the accused.
23. The learned counsel for the accused has argued that there was no legally enforceable debt/liability to the complainant firm from the accused for which the cheques-Ex.P.1 to 3 were issued. Further argued that the accused No.2 had issued the blank cheques to the complainant firm for the purpose of security at the time of business transaction with the complainant. Further argued that the accused not issued the cheques to the complainant firm for payment purpose, the complainant misused the security cheques issued by the accused. Further argued that till date there is no any due amount from the accused side to the complainant. Further argued that the complainant just to harass the accused and earn more money from the accused filled up the security cheques and presented the same to the bank for illegal gain. Further argued that on 08.09.2023 the accused paid due amount to the complainant through cash, till today there C.C.NO.27551/2023 18 is no any due amount. Further argued that the accused requested the complainant to return back her blank security cheques, but the complainant instead of returning the same misused the cheques and filed this false case. Further argued that after received this legal notice the accused called the complainant for collecting the security cheques, but the complainant instead of returning the cheques threaten from rowdies to the accused. Further argued that at the time of receiving the cheques from the accused, the complainant made a promise that he would not misused the said security cheques and further he undertaken that said cheques will be returned to the accused when stop the business between the complainant and the accused. It is further argued that the complainant had broken the promise that made with the accused, which was given for security purpose cheques by filing date and amount their whims and fancies.
24. It is further argued that the accused not given any instructions to the complainant for presentation of the cheques to the bank. Further argued that the accused is not liable to pay any amount to the complainant and she never defaulted. It is further argued that the complainant in order to prove their case not produced any piece of evidence before this court for supply of materials. It is further argued that after repayment of the entire amount to the complainant the C.C.NO.27551/2023 19 accused has demanded the complainant to return of her cheques, but the complainant not returned the same. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of a legally enforceable debt/liability, for which the cheques came to be issued. It is further argued that the complainant is only in order give trouble to the accused and with an intention to make illegal money from the accused filed false case. This is not permissible under law. Further argued that the cheques were collected from the accused No.2, as security measure. Further argued that the complainant created all the documents and filed this false case against the accused. Further argued that there is no due from the accused to the complainant. Further argued that the accused No.2 has nothing to do with the business of this case. Further argued that the accused is no due to the complainant. The complainant instead of returning the cheques to the accused, they have misused same. When there is no due from the accused, then question of issuance of cheques for repayment of the due amount does not arise at all. Therefore, from the evidence placed on record, very due amount from the accused is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt.
C.C.NO.27551/2023 20
25. He further argued that the complainant have misconceived his purported rights in filing the above complaint on the alleged issuance of cheques by the accused No.2. The cheques were issued by the accused No.2 only for security purpose at the time of business transaction with the complainant. Further argued that the accused entered appearance, this court plea was recorded, readover and explained to the accused No.2, she pleaded not guilty. The complainant examined its Manager/Authorized person as PW.1 and marked Ex.P.1 to 36 documents only. The accused No.2 lead her defence evidence as D.W.1. Further argued that the complainant had received the cheques from the accused No.2 for the purpose of security. Hence, an offence under section 138 of N.I.Act is not attracted. Even as per the complaint that whatever the materials supplied by the complainant to the accused is very well cleared and paid upto date. There is no balance or any mismanagement from the accused. The complainant have not made out any case against the accused for the alleged payment of dues as claimed in its complaint. The complaint is also not in accordance with law. Further argued that the complainant have not followed any mandatory procedure laid-down under law and that the claim of the complainant regarding legally recoverable debt is also not that of the amount claimed in the cheques. Admittedly the said cheques were given C.C.NO.27551/2023 21 as security. By taking undue advantage of possession of the cheques, the complainant have foisted a false complaint against the accused. On this ground alone the complaint requires to be dismissed. Further argued that the notice under section 138 purportedly issued by the complainant is not in accordance with law. As such, notice itself is not admissible in the eye of law. Hence, he prays to dismiss the complaint and acquit the accused.
26. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused No.2 has not seriously disputed that she had issued the cheques in favour of the complainant firm. Further it is not disputed that the cheques issued by the accused No.2 is in the account of the accused No.1. It is not disputed that the complainant is a partnership firm and the accused No.1 is a proprietary concern and the accused No.2 is a proprietor and businesswoman. The accused No.2 in order to repayment of the said amount had issued the cheques-Ex.P.1 to 3 in favour of the complainant firm. Whereas, the accused No.2 has contended that she had given the blank chaques to the complainant firm for the purpose of security. She has specifically denied having debt/liability had issued the cheques-Ex.P.1 to 3 dated: 20.06.2023, 19.07.2023 and 15.08.2023 towards part payment against the C.C.NO.27551/2023 22 transaction. She contends that the security cheques given by her to the complainant as was misused by the complainant and a false complaint was filed against the accused.
27. In order to attract the offence under section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheques drawn on the account of the accused No.1 were given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its Manager/Authorized person as PW.1 and 36 documents were marked at Ex.P.1 to 36. In chief examination, he has repeated the averments made by the complainant in the complaint. In the present case, the accused No.2 has not disputed Ex.P.1 to 3 being her cheque drawn on the account of the accused No.1. The said presumption is available to the complainant.
28. Under 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 have disputed the existence of legally enforceable debt/liability, for which cheques-Ex.P.1 to 3 were issued. PW.1 during his cross-examination has specifically denied the suggestions made to him that C.C.NO.27551/2023 23 the cheques were issued to the complainant firm for the purpose of security. Further he denied that the accused has already paid entire amount to the complainant and there is no due from the accused.
29. Since, the presumption under section 139 of 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 proof required for the accused is not so strict as required for the complainant to prove the case, further the accused have 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 No.2 that she had given blank cheques to the complainant for the purpose of security and she has paid entire amount to the complainant firm and there is no due to the complainant. Except, the said defence, she has not produced any materials to prove such defence. If she had given blank cheques to the complainant firm for the purpose of security only, 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 cheques. On which date she came to knew about the alleged illegal act of the complainant, she did not whisper about on C.C.NO.27551/2023 24 what date she came to know the alleged cheques illegally misused by the complainant. Admittedly the accused is a businesswoman and having knowledge of the financial transaction, why she has given the blank cheques to the complainant firm without anticipating the consequence is not explained by her. So also, she has not stated anything as to what steps the accused took to receive back the security cheques. Moreover, immediately after the alleged cheques misused by the complainant she has not lodge any complaint before concerned police station. No steps have been taken to receive back the cheques, after she came to know about the same. Further on perusal of the documents, its reveals that the accused after obtaining the bail from this court on 08.01.2024 given reply through her counsel as per Ex.D.16. Further on 01.02.2024 the accused given the complaint to the Commissioner of Police, Infantry Road, Bangalore as per Ex.D.18. But after service of the notice the accused not given any reply to the notice. It shows that the accused escape from her legal liability to lodge complaint before the Commissioner of Police.
30. Once issuance of the cheques and signatures are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheques were issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble C.C.NO.27551/2023 25 Supreme Court has held in the case of 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. Off 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 in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheques-Ex.P.1 to 3 the court has to draw the initial presumption that he is the payee of that cheques. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
31. Further the accused No.2 has taken defence that the cheques were given to the complainant firm for the purpose of security only. Further she has paid entire amount to the complainant firm and there is no due to the complainant. The complainant have misused the security cheques issued by her. Hence, an offence under section 138 of N.I.Act is not attracted. In this regard once issuance of cheques and signatures are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that the cheque was issued by C.C.NO.27551/2023 26 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 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 case. Therefore, the contention of the accused No.1 cannot be acceptable that the cheques were given only for security purpose, but without producing any documents, then the accused has to pay the cheques amount when it is presented for encashment which is legally recoverable debt.
32. 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 C.C.NO.27551/2023 27 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.
33. In the case of M/s Kalemani Tex V/s P. Balansubramanian, reported in (2021) 5 SCC 283, the Hon'ble Apex 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.
34. In the present case also, as the accused No.2 never disputed her signatures and did not deny issuing cheques from the account of the accused No.1. She did not dispute the cheques return memos also. The cheques were returned for the reasons "funds insufficient" in the account of the accused No.1. Thus, the act clearly lays down presumptions in favour of the complainant with regard to the issuance of the cheques by the accused towards the discharge of liability in favour of the complainant. Further under scheme of the C.C.NO.27551/2023 28 Act, the onus is upon the accused to rebut the presumption in favour of the complainant by raising a probable defence. Such being the legal position, it would be pertinent to refer to the defences raised by the accused to rebut the presumptions in favour of the complainant in this case.
35. 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 her defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
36. It is not in dispute that bounced cheques belongs to the bank account of the accused No.1. It is also not in dispute that signatures appearing on the bounced cheques is the signatures of the accused No.2. It is also not in dispute that the cheques presented by the complainant came to be dishonored by the banker of the accused No.1 for the reasons stated in the dishonor memos. To consider whether the accused No.2 succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused No.2 has not produced any documents in this regard. It was also contended by the accused No.2 that she had given blank cheques to the complainant for the purpose of security at the time of business transaction with the complainant and the complainant C.C.NO.27551/2023 29 have misused by the same. In order to prove her defence, she has failed to produce any believable evidence before this court.
37. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of blank cheques and filing false case is not possible. The accused No.2 admittedly having knowledge of business. It is implies, she is conversant with financial transaction. If the complainant misused the alleged cheques and had not return the same, inspite of collecting cheques leaves from the accused No.2, as a prudent man, the accused should have inquired with the complainant and demanded to return those cheques. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused No.2 is very unusual, because she did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.1 to 3. Further she could have issued a notice to her banker to stop payment or legal notice to the complainant or she could have given complaint to the police station immediately. No such steps were taken by the accused No.2. She simply makes a bald allegation for misuse of security cheques against the complainant. It appears, just to escape from her legal liability, she has taken such contentions without any valid basis.
C.C.NO.27551/2023 30
38. Moreover, the complainant have got issued the legal notice to the accused by registered through its counsel calling upon them to make repayment of the alleged cheques amount to the complainant. Before a person is held to be guilty of the offence punishable under 138 of N.I.Act, the complainant's have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.1 to 3 being her cheques drawn on account of the accused No.1. In view of the above discussions it is also held to be proved that its were drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and also cheques return memos-Ex.P.4 to 6 it is established that the cheques were dishonored for the reasons "Funds Insufficient'' in the account of the accused No.1. A legal notice being issued as per Ex.P.7 within one month from the date of dishonor is also not in dispute. In the case on hand the accused No.2 has not disputed regarding notice sent by the complainant on their addresses. But, the accused No.2 failed to reply to the notice, immediately after issuance of the demand notice. Thereby, she could have asserted her defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at their addresses. When the accused have not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act.
C.C.NO.27551/2023 31 Therefore, there is sufficient proof of due service of the legal notice.
39. It is not the contention of the accused No.2 that thereafter she has repaid the cheques 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 of section 138 N.I.Act, have been complied with. As the accused No.2 has not repaid the cheques amount within stipulated period. Hence, the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheques amount. Even the accused No.2 did not whisper anything about the defence while her plea was recorded under section 251 of Cr.P.C. In the judgment of 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 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 C.C.NO.27551/2023 32 accused during the trial are all after thought, just to get ride of statutory burden cast on him.
40. 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 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 have not been able to make out a probable case on their behalf.
41. The accused No.2 has taken the defence that except signatures other writings on the cheques-Ex.P.1 to 3 is not in the handwriting of the accused, which were filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. When the accused admits her signatures, she cannot take up a defence that other contents of cheques were filled up by the complainant and it amounts to material alteration. In this respect, ruling reported in 2019 SCC On-line (SC) 138), between Bir C.C.NO.27551/2023 33 Singh V/s Mukesh Kumar, the Hon'ble Apex Court held as under:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer, if cheque is otherwise valid, the penal provision of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. 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."
42. The principles emerging from the above referred decision make it clear that it is not mandatory C.C.NO.27551/2023 34 and no law prescribes that the contents of cheque should be written by the signatory to the cheque. A cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under section 139 of N.I.Act arises. The principle of law laid- down in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I.Act, the cheque being an inchoate instrument, if the drawer signs and delivers to the drawee, thereby he gives authority to the drawee thereof to make or complete the instrument.
43. As per the version of the accused No.2 is that she has nowhere denied transaction. The accused No.2 herself has admitted that the accused No.1 is the holder of alleged cheques. Further the accused No.1 is a proprietary concern and the accused No.2 is a proprietor and businesswoman. It is sufficient hold that she had issued the cheques-Ex.P.1 to 3 and even after she has not repaid the cheques 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. The accused is liable for dishonor of cheques. In case of dishonor of cheques, once the execution of cheques is admitted by the accused No.2, then it for her 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 No.2 had issued the C.C.NO.27551/2023 35 cheques-Ex.P.1 to 3 in order to repay the legally recoverable amount. Therefore, the accused have failed to probables the defence taken by her that Ex.P.1 to 3 were given to the complainant firm for the purpose of security. Therefore, the accused have 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.
44. PW.1 in his evidence has specifically deposed that the complainant is the supplier of the fabric interlinings and other materials and the accused is the purchaser from the complainant. Further deposed that against the orders placed by the accused, the complainant had supplied the goods i.e., fabric interlinings and other materials, the accused had received the said goods, after receiving the said goods from the complainant the accused made some part payment, after deducting the said part payment, the accused are due to the complainant for a sum of Rs.12,90,129/-. Further deposed that after receiving the said goods the accused had not paid the due amount. On several requests made by the complainant, the accused had issued the cheque No.000098 dated:
20.06.2023 of Rs.1,19,300/-, cheque No.000032 dated:
C.C.NO.27551/2023 36 19.07.2023 of Rs.1,84,736/-, cheque No.000034 dated: 15.08.2023 of Rs.1,38,404/- and cheque No.000095 dated: 17.06.2023 of Rs.60,545/- drawn on Bank of Baroda, Dr.Rajkumar Road Branch, Bangalore in favour of the complainant as part payment. Further deposed that the accused is well known to the complainant some point of period, no documents could have been existence the evidencing financial transaction. This factor will not affect case of the complainant to disbelieve the financial transaction between the complainant and the accused. When the accused have failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused have failed to probables their defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
45. POINT NO.3 AND 4: In order to avoid repetition of facts, these two 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's have to prove all the requirements of section 138 of N.I.Act. Ex.P.1 to 3 being drawn her cheques drawn on the account of the accused No.1 is not in dispute. The said cheques having been dishonored, when its were presented by the complainant before the bank for encashment is also C.C.NO.27551/2023 37 not seriously disputed by the accused No.2. Thereafter, the notice-Ex.P.7 being sent by the complainant not seriously disputed by the accused. The accused have not taken up any contention that thereafter she had paid the cheques amount within stipulated time of 15 days, after service of legal notice. As such, in the present case on perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. When the accused immediately after issuance of the notice, she has not paid the cheques amount. The accused have not taken up the any contention that after she had paid the cheques amount within stipulated time of 15 days, after receipt of the notice. As such, in the present case on perusal of the documents, the essential requirements of section 138 of N.I.Act have been complied with. Hence, the present complaint came to be filed before the court on 13.10.2023 within the period.
46. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheques were issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. Hence, the accused is found to have committed an offence punishable under section 138 of N.I.Act. With these observations, I answer point No.3 4 in the Affirmative.
C.C.NO.27551/2023 38
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 have failed to prove their 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 are convicted for an offence under section 138 of N.I.Act.
The bail bond of the accused No.2 hereby stands canceled.
The accused are sentence to pay fine of Rs.4,55,000/- (Rupees four lakhs fifty five thousand only) to the complainant company.
It is further ordered that out of the said fine amount an amount of Rs.4,45,000/- (Rupees four lakhs forty five thousand only) shall be paid to the complainant company C.C.NO.27551/2023 39 as compensation as per section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused No.2 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 06th day of December 2024) (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Mr.Goutham Kanunga.
List of documents marked on behalf of the complainant:
Ex.P.1 to 3 : Cheques. Ex.P.1(a) to 3(a) : Signatures of the accused No.2. Ex.P.4 to 6 : Bank endorsements. Ex.P.7 : Office copy of legal notice. Ex.P.8 : Postal receipt. Ex.P.9 & 10 : Returned postal covers. Ex.P.9(a) & 10(a) : Returned legal notices. Ex.P.11 to 33 : Tax invoices. Ex.P.34 : Outstanding statement. Ex.P.35 : Minutes of meeting. Ex.P.36 : Complaint.
List of witnesses examined on behalf of the accused:
DW.1 : Smt.Rachana Lunia.
List of documents marked on behalf of the accused:
Ex.D.1 : Letter head document.
C.C.NO.27551/2023
40
Ex.D.2 : Registration certificate.
Ex.D.3 : Reply notice.
Ex.D.3(a) : Postal cover.
Ex.D.4 : Certified of Minutes of meeting.
Ex.D.5 : Sworn statement and cross examination in
CC.No.14762/2023.
Ex.D.6 : Bank statement.
Ex.D.7 to 11 : Cash vouchers.
Ex.D.12 : Confirmation of accounts.
Ex.D.13 : GST document.
Ex.D.14 : Notarized copy of Aadhaar card.
Ex.D.15 : Notarized copy of PAN card.
Ex.D.16 : Reply notice.
Ex.D.17 : Postal receipts.
Ex.D.18 : Acknowledgment of complaint.
Ex.D.19 : Certified copies of documents produced in
CC.No.14762/2023.
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.
C.C.NO.27551/2023
41
06.12.2024 (Judgment pronounced in the Open
Court Vide Separate Sheet)
:ORDER:
Acting under section 255(2) of
Cr.P.C. the accused are convicted for an offence under section 138 of N.I.Act.
The bail bond of the accused No.2 hereby stands canceled.
The accused are sentence to pay fine of Rs.4,55,000/- (Rupees four lakhs fifty five thousand only) to the complainant company.
It is further ordered that out of the said fine amount an amount of Rs.4,45,000/- (Rupees four lakhs forty five thousand only) shall be paid to the complainant company as compensation as per section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused No.2 shall undergo simple imprisonment of six months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.