Bangalore District Court
Madhukumar S. P vs Sri. Raghukumar S L on 22 October, 2021
IN THE COURT OF ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY.
SCCH-6
PRESENT: SMT. K. LAKSHMI, B.A.L, LL.B.,
IV Addl., Small Cause Judge &
ACMM, Court of Small Causes,
BENGALURU.
C.C. No.165/2018
Dated this the 22nd day of October 2021
COMPLAINANT : Madhukumar S. P
S/o Putteshaiah,
Aged 34 years,
R/at No.46, opp. Priyadarshani
School, 10th Cross,
Freedom Fighter Nagara,
laggere, Bengaluru.
(By Advocate Shri. S. Nagesh)
V/S
ACCUSED Sri. Raghukumar S L
Aged 34 years,
S/o Lingadevaru,
Sales Executive,
C.C. No. 165 / 2018
SBI Life Insurance Company Ltd
No.23, 7th Cross,
Opp. Malleshwaram Co-op Bank,
Malleshwaram, Bangalore-560 003.
And also at:
Soppana Halli,
Turuvkere Taluk,
Tumkur District-572 215
And also at:
C/o Basavaraj H S
S/o Late Sadashivaiah
Hodalur Post, Kasaba Hobli,
Gubbi Taluk,
Tumkur District-572223.
(By Advocate Shri.K N Shashidhar)
* * *
-: J U D G M E N T :-
The complainant has filed the present complaint
against the accused under section 200 of Cr.P.C for the
offence punishable under section 138 of Negotiable
Instrument Act.
C.C. No. 165 / 2018
2. According to the Complainant, the accused
approached him and availed a credit facility to the tune of
Rs. 1,00,000/- in the year 2015. He assured that he will
return the amount within six period. Subsequently for
repayment of the said amount the accused issued two
cheques i.e., cheque bearing No. 0000012 dated 25-05-
2017 for Rs. 50,000/- drawn on Kotak Mahendra Bank
Ltd., Basaveshwaranagar Branch, Bengaluru and cheque
bearing No 141844 for Rs. 50,000/- dated 25-05-2017
drawn on IDBI Bank Led,, Rajajinagar, Bengaluru.
Thereafter, the cheques were presented for collection in
the account of the complainant and the said cheques
were dishonored by the said Banks on 02-08-2017 on
the ground that the "funds insufficient".
3. Thereafter, the complainant issued a statutory
notice dated 26-08-2017 under section 138 of the
Negotiable Instrument Act, to the accused. The accused
received the notice. The accused did not even sent any
reply to the said statutory notice. Since the said notice was
C.C. No. 165 / 2018
not complied with, the above said complaint is preferred
by the complainant.
4. In her pre-summoning evidence, complainant was
examined on affidavit. He reiterated the contents of
complainant and got marked twelve documents as per
Ex. P-1 to Ex. P-12. Upon appreciation of pre-summoning
evidence, accused was summoned for an offence
punishable under section 138 of the Negotiable
Instrument Act. After receipt of summons, the accused
appeared before this Court through his counsel and he was
enlarged on bail. Plea of accusation has been read over
and explained to the accused and he pleads not guilty and
claims to be tried. The accused was examined u/Sec.313
of Cr.P.C. He totally denied the entire case of the
complainant.
5. The accused moved an application to cross
examine the complainant and said application came to be
allowed. The opportunity has given to the accused to cross
C.C. No. 165 / 2018
examine the complainant. The accused has cross examined
the complainant. On the other hand, the accused has led
lead evidence as DW-1 and three documents as per Ex. D-
1 to Ex. D-3 got marked on his behalf. Thereafter, the
case is posted for arguments.
6. Heard the arguments.
7. On the basis of the above facts, the following
points arise for my consideration :-
1. Whether the complainant proves beyond all the
reasonable doubt that, the accused has taken
the hand loan of Rs. 1,00,000/- from him and
issued two cheques I.e, cheque bearing No.
0000012 dated 25-05-2015 for Rs. 50,000/-
drawn on Kotak Mahendra Bank Ltd.,
Basaveshwaranagara Branch, Bengaluru and
another cheque bearing No.141844 for a sum of
Rs. 50,000/- dated 25-05-2015, drawn on
IDBI Bank Let., Rajajinagar Branch and when
C.C. No. 165 / 2018
the complainant presented the said cheques for
encashment and the said cheques weres
dishonored due to "funds insufficient ", for
which the complainant has issued a legal notice
through RPAD and the same was served, but
the accused has not repaid the said amount and
thereby the accused has committed the offence
punishable under section 138 of Negotiable
Instruments Act?
2. What order ?
8. My answers to the above points are as follows :
Point No.1 : In the affirmative,
Point No.2 : As per final order,
for the following:
-: R E A S O N S :-
POINT No.1 :-
9. The complainant has filed his affidavit in lieu of
his oral chief examination. In his affidavit he has
C.C. No. 165 / 2018
testified regarding lending of Rs. 1,00,000/- to the
accused, issuance of the cheques, dishonour of cheques,
issuance of legal notice and failure of the accused to pay
the cheques amount. The complainant has produced the
two cheques i.e., cheque bearing No. 0000012 dated 25-
05-2017 for Rs. 50,000/- drawn on Kotak Mahendra
Bank Ltd., Basaveshwaranagar Branch, Bengaluru and
cheque bearing No 141844 for Rs. 50,000/- dated 25-05-
2017 drawn on IDBI Bank Led, Rajajinagar, Bengaluru
alleged to be issued by the accused in favour of the
complainant. Ex. P-1 and Ex. P-2 stand in the name of the
complainant for 50,000/- each. Ex. P-3 and Ex. P-4 are
the Banker's endorsements. Ex. P-5 is the office copy of
the legal notice, which is dated 26-08-2017. Ex. P- 6 to
Ex. P-8 are the postal receipts. Ex. P-9 is the postal
acknowledgment. Ex. P-10 and Ex. P11 are the postal
covers. Ex. P-12 is the income tax returns.
10. On the other hand, the accused has led evidence
as DW-1. He relied on the lost article reports issued by
C.C. No. 165 / 2018
the Bengaluru Police, mobile bill and aadhar card i.e, Ex.
D-1 to Ex. D-3. He deposed that the disputed cheques
were not issued to the complainant. He never borrowed a
loan from the complainant. The accused has lost the
cheques. The accused has lodged the complaint in respect
of lost cheques. The complainant has misused the cheque
in order to make wrongful gain from him. He is not
liable to pay the cheques amount to the complainant. The
complainant has not come to the Court with clean hands.
The notice issued by the complainant is not served on
him.
11. Learned counsel for the complainant argued that
the complainant has discharged the initial burden of
proving the case by her oral as well as documentary
evidence. It is also contention of the complainant that the
accused has not initiated the legal action against the
complainant to recover the disputed cheque. The accused
was aware of the fact that the disputed cheque was with
the complainant. He has also contended that the benefit
C.C. No. 165 / 2018
of presumption under Sections 118 and 139 of Negotiable
Instruments Act is in favour of the complainant, and
therefore the accused has failed to rebut the presumption.
Hence, the accused is liable to be convicted.
12. According to the accused, there was no
transaction between the complainant and the accused, and
the accused never borrowed a loan of Rs. 1,00,000/- from
the complainant. The notice was not severed on him.
There is no necessity to borrow the loan from the
complainant. It is further contended that though there is
presumption under Sec.118 and 139 of Negotiable
Instruments Act, existence of legally enforceable debt is
not a matter of presumption u/Sec.139 of Negotiable
Instruments Act.
13. In view of rival contentions raised by the
parties, it is necessary to consider the statutory provisions
in this regard and also proposition of law.
C.C. No. 165 / 2018
Section 118 of Negotiable Instrument Act lays
down that:
"Until the contrary is proved, it
shall be presumed that every
Negotiable instrument was made or
drawn for consideration."
Section 139 of N.I. Act contemplates that :
" Unless the contrary is proved,
it shall presume that holder of the
cheque receive the cheque of the
nature referred to section 138 of
the N.I. Act for the discharge, in
whole or in part, of any debt or
other liability."
14. The presumption mandated by Section 139 of
N.I. Act does indeed show the existence of legally
enforceable debt or liability. It is a rebuttal presumption.
It is open to raise the defence, wherein the existence of
C.C. No. 165 / 2018
legally enforceable debt or liability can be contested. For
rebutting presumption accused is not required to adduce
evidence with unduly high standard of proof, but the
standard of proof for doing so is that preponderance of
probability. If the accused is able to raise probable defence,
which creates doubt about the existence of legally
enforceable debt or liability, then the onus shift back to
the complainant. It is also clear that for rebutting the
presumption accused can rely on the material submitted
by the complainant or his cross examination and he need
not necessarily adduce his defence evidence in all the cases.'
15. The specific case of the complainant is that, the
accused has borrowed a loan of Rs. 1,00,000/-. The
accused issued the disputed cheques for discharging of debt
and the said disputed cheques were dishonored.
Thereafter a legal notice was issued and then he filed
complaint. It is further contended that once the cheque
relates to the account of the accused and the signature is
admitted on the cheque, then initial presumption as
C.C. No. 165 / 2018
contemplated u/Sec.139 of N.I. Act has to be raised by
the court in favour of the complainant.
16. In order to prosecute the drawer of the cheque
for the offence punishable under offence Sec.138 of
Negotiable Instrument Act, the following facts are
required to be proved :
That the cheque was drawn for payment of
money for discharging the of a debt or
liability,
The cheque was dishonored,
That the cheque was presented within the
prescribed period,
The payee made a demand for payment of the
money by giving demand notice in writing to
the drawer within stipulated period.
That the drawer failed to make the payment
within 15 days of the receipt of notice.
17. According to the accused, he never borrowed a
loan from the complainant and he has not issued the
impugned cheques in favour of complainant. The contents
of cheques are not in the handwriting of the accused. In
this case, the accused has not denied the cheque and also
C.C. No. 165 / 2018
the signature in the cheque. Section 20 of Negotiable
Instrument Act, 1881, states that when a person signs and
delivers blank cheque to another, he thereby gives prima
facie authority to holder thereof to make or complete it
for any amount specified therein and not exceeding the
amount covered by stamp. After combined reading of
said section 20 and 138 of Negotiable Instrument Act, it
appears that to made out an offence in question against the
accused, the necessary ingredient is that the cheque should
be drawn on the account of the drawer and it is immaterial
the contents therein are in whose handwriting as per
section 20 of the Negotiable Instruments Act. After
perusal of said section 20, it appears that the drawer of a
cheque can issue blank cheque to other person and by his
said act he gives an authority to said concern person to fill
up it contents. It enables the holder of the cheque to fill up
the incomplete cheque.
18. In the case of Bir Singh -Vs- Mukesh
Kumar, AIR 2019 SUPREME COURT 2446, our
C.C. No. 165 / 2018
Apex Court held that the complainant can fill up
amount or particulars in blank cheque. If voluntarily
presented to payee towards payment, payee may fill up
amount and other particulars and it in itself would not
invalidate cheque. Onus would still be on accused to
prove that cheque was not issued for the discharge of
debt or liability.
19. In the case of K. N. Beena -Vs- Muniyappan,
(2001) 8 SCC 458. the Hon'ble Apex Court held
that under Section 118 of the Negotiable Instrument
Act, unless the contrary is proved, it is to be presumed
that the negotiable instrument had been made or drawn
for consideration. It is further held that under section
139, the Court has to presume, unless the contrary is
proved, that the holder of the cheque received the cheque
for discharge, in whole or in part, of a debt or liability. It
is further held that the cheque had been issued for debt or
liability. This presumption is rebuttable. However, the
burden of proving that the cheque has not been issued
C.C. No. 165 / 2018
for a debt or liability is on the accused. Further in the case
of Kumar Expots -Vs- Sharma Carpets, (2009) 2 SCC
513, it is held that the accused may adduce evidence to
rebut the presumption, but mere denial regarding
existence of debt shall not serve any purpose.
20. The position of law which emerges is that once
issuance of cheque is admitted, the presumption under
Section 118 (a) of Negotiable Instrument Act would arise
that it is supported by a consideration. Such a
presumption is rebuttal. The accused can prove the non-
existence of a consideration by raising a probable defence.
If the accused is proved to have discharged the initial onus
of proof showing that the existence of debt was
improbable or doubtful or the same was illegal, the onus
would shift to the complainant who will be obliged to
prove it as a matter of fact and upon it failure to prove
would dis-entitle him to grant of relief on the basis of the
negotiable installment. The burden upon the accused of
proving the non-existence of the consideration can be
C.C. No. 165 / 2018
either direct or by bringing on record the preponderance
of probability by reference to the circumstances upon
which he relies. In such event, the complainant is entitled
under law to rely upon all the evidence led in the case. In
case, where the accused fails to discharge the initial onus
of proof by showing the non-existence of the
consideration, the complainant would invariably be held
entitled to the benefit of presumption arising under
Section 118 (a) of Negotiable Instrument Act in his
favour. The Court may not insist upon the accused to
disprove the existence of consideration by leading direct
evidence as the existence of negative evidence. It is neither
possible not contemplated and even of led, is to be seen
with a doubt. The standard of proof evidently is
preponderance of probabilities. Inference of
preponderance of probabilities can be drawn not only
from the materials on records, but also by reference to the
circumstances upon which relies.
C.C. No. 165 / 2018
21. Thus, this Court has to consider whether the
complainant has to prove the existence of legally
recoverable debt. From the statement of the complainant
reveals that the accused borrowed a loan from him and
disputed cheque was issued in favour of complainant. In
the present case, the cheque are dated and 25-05-2017
& 30-05-2017 and the complainant has presented the
disputed cheques within 3 months from the date of the
cheques as it could be seen from endorsement. Ex. P-3
and Ex. P-4 further reveal that the cheques in question
were dishonored. The demand notice was issued to the
accused on 26-08-2017 and the notice issued within a
statutory period. Then the complainant has filed this
complaint within the statutory period.
22. It is specific defence of the accused that the
complainant is his friend. He never borrowed a loan
from the complainant. It is also the contention of the
accused that the impugned cheques were not issued in
favour of complainant. The accused has lost the impugned
C.C. No. 165 / 2018
cheques. He lodged a complainant in this respect. The
complainant has misused the cheques in order to gain
wrongful gain from him. On the contrary, the
complainant has contended that the accused borrowed a
loan of Rs. 1,00,000/- and accused has issued the
impugned cheque in his favour. In this regard, it is
suggested to PW-1 as here under :-
"ನಮಗ ಚಕಗಳಳ ಸಕಕ ನನತರ ನನವ ಬಬನಕಗ
ಚಕಗಳನಳ
ನ ಸಲಸದರ ಎನದರ ಸಕಯಳ ಅವರಳ
ಚಕಗಳನಳ
ನ ಕಕಟಟದದರಳ ನನಳ ಬಬನಕಗ ಸಲಸದನ
ಎನದಳ ಹನಳಳತತರ. ಆರಕನಪಯಳ ನಮಗ ಯವದನ
ಹಣವನಳ
ನ ಕಕಡಬನಕಗಲಲ, ನನವ ಕನಕನಳ
ಬಹರವಗ ಚಕಗಳನಳ
ನ ಪಡದಳಕಕನಡದರ ಎನದರ
ಸಳಳಳ
ಳ . ಚಕ ಕಳದಳ ಹಕನಗದ ಎನದಳ ದದ
10.05.2017 ರನದಳ ಆರಕನಪಯಳ ದಕರನಳ
ನ ಕಕಟಟ
ನನತರ ನನವ ದದ 26.08.2017 ರನದಳ ಲನಗಲ
ನಕನಟನಸ ಕಕಟಟದರ ಎನದರ ಸಕಯಳ ನನಳ ದದ
26.08.2017 ರನದಳ ಲನಗಲ ನಕನಟನಸ ಕಕಟಟದನ
ಎನದಳ ಹನಳಳತತರ. ನನವ ಕಕಟಟನತಹ ಲನಗಲ
ನಕನಟನಸ ಆರಕನಪಯ ಯವದನ ವಳಸಕಕ
ಜರಯಗಲಲ ಎನದರ ಸಕಯಳ ಜರಯಗದ ಅವರಳ
ತಗದಳಕಕನಡಲಲ ಎನದಳ ಹನಳಳತತರ."
C.C. No. 165 / 2018
The complainant has denied all the suggestions put-
forth by the accused. Mere suggestions are not sufficient
to prove the defence of the accused. Admittedly, in this
case, the accused has not taken any legal action against the
complainant to recover the cheque in issue from him.
Further, the accused has not placed any material to show
that the complainant has stolen the cheques. Mere
allegation is not sufficient to disprove the case of
complainant. The accused has to place the probable
evidence to show that the disputed cheques were not
issued towards debt.
23. Another contention of the accused is that the
demand notice was not severed to the accused. The burden
is on the complainant that the notice was dispatched by
post with correct address. Per contra, Learned Counsel
for complainant argued that the notice was duly severed
on the accused. Admittedly, the requirements of Section
138 (b) of the Negotiable Instrument Act is that notice
C.C. No. 165 / 2018
should be sent to the drawer of the cheque. Clause (b) of
the proviso to Section 138 of the Negotiable Instrument
Act lays down that notice regarding dishonor of the
cheque should be sent to the drawer of the cheque within
15 days of the receipt of intimation regarding the dishonor
of the cheque. Considering the provision contained in
Section 27 of the General Clauses Act once the sender
establishes the fact that the notice was dispatched by post
with correct address written thereon, it should be deemed
to have been served on the sendee unless he establishes that
it was not really served and that he was not responsible for
such non-service. It is not sufficient to show that the letter
was not served upon the sendee, but it is necessary for the
sendee to establish that it was not on account of the fault
on the part of the sendee that the service could not be
effected.
24. In Alavi Haji v. Palapetty Muhammed and
Anr. (2007) 6 SCC 555 the Hon'ble Apex Court has
been held as under:- "Any drawer who claims that he did
C.C. No. 165 / 2018
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). 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 under Section 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."
25. In the case of Mahmuda Khatun -Vs- Ajit
Chandra Deka AIR 1978 NOC 112 (GAU ), Hon'ble
High Court of Gauhati held that the presumption of
service of notice sent under registered post is available
C.C. No. 165 / 2018
under Sections 16 and 114 (e) of Evidence Ac as well as
under Section 27 of the General Clauses Act only when
the plaintiff proves that the letter was properly addressed
and was put into the post office.
26. Admittedly, the presumption service of notice
sent under registered post is available under Section 27 of
the General Clauses Act. The mere fact that the full
address was given in the body of the notice, does not raise
any presumption that the envelop containing the notice
was also correctly addressed. At any rate presumption
under Sections 16 and 114 (e) of the Evidence Act as well
as under Section 27 of the General Clauses Act is a
rebuttable one. When the person on whom the notice is
said to have been served appears before the Court and
denies on oath that the notice was served on him, the
presumption is rebuttal one and in such a case the evidence
of the postman becomes necessary. In this case, the
complainant is relying upon the presumption which are in
his favour. It is specific case of the accused that the
C.C. No. 165 / 2018
demand notice alleged to be issued by the complainant not
served on him. In this regard, it is suggested to DW-1 as
hereunder :-
"ದಕರನಲರಳವ ವಳಸ ಮತಳತ ಲನಗಲ
ನಕನಟನಸ ಕಕಟಟರಳವ ವಳಸ ಎರಡಳ ಒನದನ ಎನದರ
ಸಕಯಳ ದಕರನಲ ನಮಕದಸದನತಹ ವಳಸ
ಸರಯಗದ ಆದರ ಲನಗಲ ನಕನಟನಸ ನಲ
ನಮಕದಸದನತಹ ವಳಸ ಸರ ಇಲಲ ಎನದಳ ಹನಳಳತತರ."
It is further suggested to the DW-1 that,
"ನನವ ನಮಮ ಚಕಗಳಳ ಮತಳತ ನಮಮ ಎಟಎನಗಳಳ
ಕಳದಳ ಹಕನಗರಳವ ಬಗಗ ಸನಬನಧ ಪಟಟ ಬಬನಕನವರಗ
ದಕರನಳ
ನ ಕಕಟಳ
ಟ ಬಲಕ ಮಡಸದರ ಎನದರ
ಸಕಯಳ ಮಡಸದನ ಎನದಳ ಹನಳಳತತರ. ಬಬನಕ ಗ
ದಕರನಳ
ನ ಕಕಟಟರಳವ ಪ ಪತಯನಳ
ನ ನಬಯಲಯದಲ
ಹಜರಳಪಡಸಲಳ ತಕನದರ ಇಲಲ ಎನದರ ಸಕಯಳ
ಹಜರಳಪಡಸಳತತನನ ಎನದಳ ಹನಳಳತತರ."
From the material available on the record, it is clear
that the address of the accused was correctly mentioned in
the envelope. It is not the case of the accused that the
address mentioned in the legal notice as well as postal
C.C. No. 165 / 2018
acknowledgments are incorrect. Absolutely, there is no
an iota of evidence on the record to show that legal notice
has been sent on the incorrect address. Ex. D-2 and Ex.
D-3 were issued in the year 2019. The accused has not
placed any material to show that the address mentioned in
the legal notice are incorrect. The accused has admitted
the fact that the address mentioned in the complaint is
correct. On perusal of legal notice and complaint, the
address mentioned in the cause title of complaint and the
legal notice are one and the same. Therefore, the
contention of accused that the notice was not severed on
him cannot be acceptable.
27. Another contention of the accused that the
impugned cheques were lost and he lodged a complaint in
this respect before the jurisdictional police. It is well
settled that the party who pleads has also to prove his case.
Section 101 of the Indian Evidence Act, 1872 defines
'burden of proof', which clearly lays down that whosoever
desires any Court to give judgment as to any legal right or
C.C. No. 165 / 2018
law dependent on the existence of facts which he asserts,
must prove that those facts exist. When a person is bound
to prove the existence of any fact it is said that the burden
of proof lies on that person. Thus, the Court has to
examine as to whether the person upon whom burden lies
has been able to discharged his burden. Until he arrives at
such conclusion, he cannot proceed on the basis of
weakness of the other party. It is relevant here to mention
that, the accused during the cross examination of
complainant has specifically denied his signature on the
cheque in dispute. But in his evidence he has stated that,
he has not borrowed any loan from the complainant and
has not issued disputed cheque for repayment of alleged
loan and as on the date of alleged issuance of cheque in
question he was not at all in possession of his cheques,
since he had lost ATM card, cheque leaves and cash
which were kept in his perse in the month of February
2017 and to that effect he had lodged the complaint
before the Kengeri and Chandra layout police station.
C.C. No. 165 / 2018
28. In this case, it is relevant here to mention that,
though the Accused has denied his signature on the
cheques in dispute and also issuance of the cheques to the
complainant but in his evidence he nowhere denied the
cheques belongs to his account and he lost signed blank
cheque and which is the subject cheque and also not stated
how the cheque in question came in to the hands of
complainant, in such circumstances it is relevant here to
refer the decisions of Hon'ble Apex Court of India
reported in 1999(3) SCC 376 In the case of "L.C.
Goyal Vs. Suresh Joshi(Mrs) and Ors" wherein Hon'ble
Apex Court held that "drawer denied his signature on
the cheque and pleaded that, he could not be held
responsible unless opinion of hand writing expert was
obtained, but when cheque bounced for want of funds, the
plea of forged signature cannot be accepted". In another
decision reported in ILR 2006 KAR 2958 in a case of
"Rajendraprasad Vs. M.Shivaraj" wherein the Hon'ble
High Court held that Negotiable Instrument Act, 1881 -
Sections 138, 139 - signature of the accused on cheque
C.C. No. 165 / 2018
denied - No discrepancy of the signature with the
specimen signature. In the banks intimation- Whether
mere denial of the signature of the accused on the cheque
sufficient for acquittal- competency of persons to speak
about the signature of the accused- HELD - The banker of
the accused is more competent person to say whether it is
the signature of the accused or not with reference to the
specimen signature. In the banks intimation, the
discrepancy of the signature with the specimen signature is
not the ground for dishonour. In the instant case, the
banker does not mention that, the signature is discrepancy
of the signature with the specimen signature is not the
ground for dishonour. In the instant case, the banker does
not mention that, the signature is discrepant and does not
tally with the specimen signature. Therefore, the self-
serving denial of signature in the cheque cannot be a good
evidence to come to the conclusion that, the signature on
the cheque is not that of the accused. The bankers no
objection for the signature in the cheque is one of the
strongest circumstances to corroborate that, the signature
C.C. No. 165 / 2018
on the cheque is that of the accused. The possession of the
lost cheque with the complainant suggests an inference of
endorsement and delivery of inchoate instrument which
impliedly admit the issuance of cheque in favour of the
complainant. Hence on careful reading of principles of law
laid down by the Hon'ble High court of Karnataka in the
above referred decisions, it is clear that, when the accused
disputed his signature on the cheque, then the court can
consider the endorsement issued by the banker on the
Memo and if in the bank's intimation, the discrepancy of
the signature with the specimen signature is not the
ground for dishonour, then the signature appearing on the
cheque is one of the strongest circumstances to
corroborate that, the signature on the cheque is that of
accused and it is also held that, the possession of the
cheque with complainant suggest an inference of
endorsement and delivery of inchoate instrument which
impliedly admits the issuance of cheque in favour of the
complainant.
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28. In the present case also though the accused has
denied his signature and issuance of the cheque in favour
of the complainant, but nothing has been produced by
him to show that, how the cheque in question was come
in possession of the complainant and bank intimation
discloses the fact that, the cheques in question was
dishonoured for the reason of "funds insufficient " but not
"signature differs" therefore in view of the principles of law
laid down by the Hon'ble Apex Court and High Court of
Karnataka in the above referred decisions, it can be safely
held that, the denial of signature by the accused is only self
serving denial of his signature that, cannot be a good
evidence to come to a conclusion that, the signature on
Ex.P1(a) is not that of the accused. In view of the
principles of law laid down in the decisions, even it is not
necessary for the complainant to examine the bank
manager as a witness to prove the fact that, the signature
appearing on the cheque is that of the accused, since the
accused during the cross examination of PW.1 has not
denied the endorsement issued by banker. Therefore the
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complainant has discharged his initial burden that, the
signatures appearing in the cheques are that of the accused.
It is also relevant here to mention that, the accused in his
defence except denial of the claim of the complainant has
not stated how the disputed the disputed cheque entered
into the hands of complainant. If the accused has failed to
explain the circumstances, under which the disputed
cheque came in possession of the complainant, hence
failure to do so also entitles in drawing adverse inference
against the accused. This proposition of law finds support
from the decisions of Hon'ble High Court of Karnataka
reported in 2010(1) KCCR 176 in the case of "Siddappa
Vs. Manjappa". In another decision of Hon'ble Apex
court of India decided in Crl.A.No.664 of 2012 dated:
19.9.2019 in the case of "M.Abbas Haji Vs.
T.M.Chennakeshava" held that, " the Accused has to
explain how the cheque entered into the hands of
complainant". Hence in the present case also the Accused
has failed to explain how the cheque in question was
entered into the hands of complainant.
C.C. No. 165 / 2018
29. It is also relevant here to mention that, as already
held in the above that, the complainant has proved that,
the cheques in question were issued by the accused and
signatures appearing on cheques are that of the accused and
the complainant was presented the said cheque and it was
returned with an endorsement of "funds insufficient",
thereafter the complainant got issued demand notice to the
accused. It is pertinent to note that the accused has not
placed any material to show that the information was
given to the bank to stop the payment in respect of lost
cheques. Ex. D-1 is a lost article report and it shows that
the cheques were lost. In the said report, the cheques
numbers were not mentioned. Mere lodging the F.I.R is
not sufficient to hold that the disputed cheques were lost
or stolen by the complainant. Admittedly, the accused
has not taken legal action against the complainant after
receipt of summons from the Court. It leads inference
that the impugned cheques were issued by the accused in
favour of accused towards the discharge of debt.
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Moreover, the accused has not explained the circumstances
under which the impugned cheques were came into to the
possession of the complainant at the time of the recording
the statement required under Section 313 of Cr. P.C.
Thus, the defence of the accused that the impugned
cheques were lost cannot be accepted.
30. It is also the allegation of the defence that the
accused has not given authority to complainant to
complete the blanks in the cheque. It is also alleged that
the complainant has completed the blanks in the cheque
without the consent of accused. The complainant
committed an act of forgery by filling the blanks in the
cheque. As regards the defence raised by the accused that
he did not fill the details in the cheque himself and had
handed over signed blank cheque to the complainant and
remaining particulars were not filled by the accused thus
this case is not maintainable, at this juncture it would be
worthwhile to discuss the provisions under Sections 20
C.C. No. 165 / 2018
and 118 of the Negotiable Instruments Act, which is as
under:
20. Inchoate stamped instruments.
Where one person signs and delivers to
another a paper stamped in accordance with
the law relating to negotiable instruments
then in force in [India], and either wholly
blank or having written thereon an
incomplete negotiable instrument, he
thereby gives prima facie authority to the
holder thereof to make or complete, as
then case may be, upon it a negotiable
instrument, instrument, for any amount
specified therein and not exceeding the
amount covered by the stamp. The person
so signing shall be liable upon such
instrument, in the capacity in which he
signed the same, to any holder in due course
for such amount, provided that no person
other than a holder in due course shall
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recover from the person delivering the
instrument anything in excess of the
amount intended by him to be paid
thereunder.
118. Presumptions as to negotiable instruments of
consideration 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 a date was made or
drawn on such date;
(c) as to time of acceptance that every
accepted bill of exchange was accepted
within a reasonable time after its date its
date and before its maturity;
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(d) as to time of transfer. that every
transfer of a negotiable instrument was
made before its maturity;
(e) as to order of endorsements that the
endorsements appearing upon a negotiable
instrument were made in the order in
which they appear thereon;
(f) as to stamps that a lost promissory note,
bill of exchange or cheque was duly
stamped;
(g) that holder is a holder in due course
that the holder of a negotiable instrument
is a holder in due course; provided that,
where the instrument has been contained
from its lawful owner, or form any person
in lawful custody thereof, by means of an
offence or fraud, or for unlawful
consideration, the burden of proving that
the holder is a holder in due course lies
upon him.
31. The bare persual of section 20 of Negotiable
Instrument Act reveals that the holder of the cheque has
implied authority to complete the blanks in the cheque.
The filling of the details in the blank cheque perse does
not attract the provisions of Section 87 of Negotiable
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Instrument Act. In other words, the completing of
blank cheque by the holder cannot be said to be material
alteration in the cheque and also forgery. It is no law that
for a cheque must be said to be valid the contents must be
filled by the drawer. Moreover, nothing contrary has
been proved to show that the complainant does not have
implied authority to fill the blank cheques. Thus, the
defence of the accused that he has not filled the contents in
the impugned cheque is not tenable in the eye of law. In
support of this contention I relied on the following
citations.
32. In the case of Mojj Engineering Systems
Limited & Ors. Vs. A.B. Sugars Ltd.; 154 (2008) Delhi
Law Times 579, the Hon'ble Delhi High Court had
observed as under :-
" Even otherwise, prima facie, it was the petitioners
who had handed over the undated cheque for a certain
amount to the respondent in terms of a contract between
the parties. Since an undated cheque cannot be encashed, it
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can only mean that the petitioners had authorized the
complainant to enter an appropriate date on it. Further
in the case of Young Vs. Grote (1827) 4 Bing. 253 it
was held that when a blank cheque is signed and handed
over, it means the person signing it has given an implied
authority to any subsequent holder to fill it up.
33. Similarly, in Scholfield Vs. Lord
Londesborough (18951899) All ER Rep 282 it was held
that whoever signs a cheque or accepts a bill in blank,
must necessarily intend that either the person to whom he
gives it, or some future holder, shall fill up the blank
which he has left. This common law doctrine was also
affirmed by Hon'ble Justice Macnaghten in Griffiths Vs.
Dalton [1940] 2 KB 264 where it was held that the
drawer of an undated cheque gives a prima facie authority
to fill in the date. This aspect has also been incorporated in
Section 20 of the Negotiable Instruments Act, which deals
with Inchoate Stamped Instruments. The Hon'ble
Supreme Court in T.Nagappa Vs. Y.R.Murlidhar,
C.C. No. 165 / 2018
(2008) 5 SCC 633 while discussing the scope of Section
20 held that by reason of this provision, a right has been
created in the holder of the cheque. Prima facie, the holder
thereof is authorized to complete the incomplete
negotiable instrument.
34. A collective reading of the above provisions
shows that even under the scheme of the Negotiable
Instrument Act, it is possible for the drawer of a cheque
to give a blank cheque signed by him to the said cheque
being filled up at a subsequent point in time and presented
for payment by the drawer. There is no provisions in the
Negotiable Instrument Act which either defines the
differences in the handwriting or the ink pertaining to the
material particulars filled up in comparison with the
signature thereon as constituting a material alteration for
the purpose of Section 87 of Negotiable Instrument Act.
What, however, is essential is that the cheque must have
been signed by the drawer. If the signature is altered or
does not tally with the normal signature of the make, that
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would be a material alteration. Therefore, as long as the
cheque has been signed by the drawer, the fact that the
filling of details in the blank cheque perse does not attract
the provisions of forgery. Thus, the contentions of the
defence counsel that the complainant has committed the
forgery by filling of the details in the blank cheque cannot
be accepted.
35. Once the cheque relates to the account of the
accused and he accepts and admits his signature on the
cheque, then initial presumption as contemplated
u/Sec.139 of N.I. Act has to be raised by the court in
favour of the complainant. The presumption referred to
u/Sec.139 of N.I. Act is a mandatory presumption and
not a general presumption. But, the accused is entitled to
rebut the said presumption by probable and acceptable
evidence. On perusal of records, it also shows that the
accused appears to be aware of the fact that the cheques
were with the complainant. Further, the very fact that the
accused has failed to reply to the notice under Sec.138 of
C.C. No. 165 / 2018
N.I. Act and he had also not taken any legal action against
the complainant after receipt of the summons leads to the
inference that there is a material in the complainant's
version. Furthermore, the accused had not taken legal
action against the complainant on the ground that the
complainant did not return the disputed cheque even after
the discharge of the debt. In the present case, the
complainant proves that the existence of legally
enforceable debt. If really the impugned cheques were not
issued in favour of complainant for the discharge of debt,
immediately the accused would have given the complaint
against the complainant after the receipt of the summons.
Apart from that, the accused failed to contest the
existence of legally enforceable debt or liability. Since the
accused admitted the issuance of cheque and also signature
in the cheque, then the statutory presumption comes into
play and the same has not been rebutted by the accused.
Hence, I answer point No.1 in the Affirmative.
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POINT No.2:-
36. Section 139 of N.I. Act creates presumption that
the cheque received in the nature referred to Section 138
of N.I. Act is always issued in discharge of debt or other
liability. In this case, the complainant proves the fact that
the accused had issued the cheques in issue for discharge
of legally enforceable debt. The accused failed to prove
the fact that he has not issued the impugned cheques in
favour of the complainant towards discharge of debt. In
view of my findings to the above point, I proceed to pass
the following :
ORDER
The accused is found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is convicted acting Under Section 255(2) of Cr.P.C of the charges leveled against him for the offence Under Section 138 of Negotiable Instruments Act and he is sentenced to pay fine of Rs. 1,05,000/-. In default of payment of fine, he has to undergo simple imprisonment for the period of Six months.
C.C. No. 165 / 2018 Out of fine amount recovered under Section 357 of Criminal Procedure Code a sum of Rs.1,00,000/- shall be paid to the complainant which includes the cheque amount as a compensation. Remaining fine amount of Rs. 5,000/- shall be forfeited to State.
Bail bond of accused is canceled and surety stands discharged.
Supply free copy of this judgment to the accused.
(Dictated to the Stenographer, transcribed and typed on Lap-top, then corrected by me, Print out taken, signed and then pronounced by me in the open court on this the 22nd day of October 2021.) (K. LAKSHMI) IV Addl. SCJ & ACMM., Bengaluru.
C.C. No. 165 / 2018 ANNEXURE List of witnesses Examined for Prosecution:
PW.1. : Madhukumar S P List of documents marked for prosecution :
Exp.1 &2 : Cheques
Exp.1(a) &
2(a) : Signatures of accused
Exp.3 & 4 : Banker's endorsement
Exp.5 : Office copy of Legal notice
Exp.6 to 8 : Three Postal receipts
Exp.9 : Postal endorsement
Exp.10 & 11 : Two RPAD covers
Exp.12 : Income Tax returns of the year
2016-17, balance sheet and Certificate List of witnesses Examined for accused :
DW.1 : Raghu Kumar List of documents marked for prosecution :
ExD.1 : Complaint dated: 10.05.2017 C.C. No. 165 / 2018 ExD.2 : Mobile bill ExD.3 : Aadhar card (K. LAKSHMI) IV Addl. SCJ & ACMM., Bengaluru.
C.C. No. 165 / 2018 Dt: 22.10.2021 C-
A-
For Judgment (Order pronounced in open court vide separate judgment) ORDER The accused is found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is convicted acting Under Section 255(2) of Cr.P.C of the charges leveled against him for the offence Under Section 138 of Negotiable Instruments Act and he is sentenced to pay fine of Rs.
C.C. No. 165 / 2018 1,05,000/-. In default of payment of fine, he has to undergo simple imprisonment for the period of Six months.
Out of fine amount recovered under Section 357 of Criminal Procedure Code a sum of Rs.1,00,000/- shall be paid to the complainant which includes the cheque amount as a compensation. Remaining fine amount of Rs. 5,000/- shall be forfeited to State.
Bail bond of accused is canceled and surety stands discharged.
Supply free copy of this judgment to the accused.
(K. LAKSHMI) IV Addl. SCJ & ACMM, Bengaluru.
C.C. No. 165 / 2018 C.C. No. 165 / 2018 C.C. No. 165 / 2018 C.C. No. 165 / 2018 C.C. No. 165 / 2018 C.C. No. 165 / 2018