Bangalore District Court
Ramachandra Reddy.V vs P.S.Kumar on 4 March, 2025
KABC020347542022
IN THE COURT OF THE XXII ADDL. JUDGE, COURT OF
SMALL CAUSES AND ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY (SCCH-24).
Presided Over by Smt. Roopashri, B.Com., LL.B.,
XXII ADDL., SCJ & ACJM,
MEMBER - MACT,
BENGALURU.
Dated: On this day of 4th day of March 2025
CC NO.13494/2022
1. Sl.No. of the Case : C.C.No.13494 of 2022.
2. The date of : 14-09-2022
commission of the
offence
3. Name of the : Sri. Ramachandra Reddy.V.,
Complainant S/o :Late Venkataram Reddy,
Aged about 60 years,
C/o. M.R.Srinivas Reddy,
Keremindally Village,
Ramasagara Hobli,
Kysamballi Hobli,
K.G.F.Taluk,
Kolar District.
(By Sri.N Devaraja, Advocate)
SCCH-24 2 C.C.13494 of 2022
4. Name of the Accused : P.S.Kumar
S/o. Subbanna P.V,
Aged about 41 years,
R/at. No.13,
SLV Complex,
Ananthanagar Main Road,
Huskur Gate, Hebbagodi,
Bengaluru South,
Bengaluru-560100.
(By Kopresh Advocate)
5. The offence complained : Under Section 138 of the
of or proves Negotiable Instrument Act.
6. Plea of the accused and : Pleaded not guilty.
his examination
7. Final Order : Accused is found guilty.
8. Date of such order for : 04-03-2025
the following
JUDGMENT
This complaint is filed under Sec. 200 of Cr. P. C. for
the offence punishable under Section 138 of the
Negotiable Instruments Act.
2. The case of the complainant is that, Accused is
the authorized signatory of M/s Sri Skanda Developers
situated at Electronic city, Bangalore of which the
accused, K R Ramana Reddy, D R Balagurunath and
SCCH-24 3 C.C.13494 of 2022
Yashes are the partners and they are the owners of the
site bearing No.12, measuring E X W 55 feet N X S 30 feet
situated at Dodduru, Karappanahalli, Bangarpet Taluk,
Kolar District (here in after referred to as the schedule
property. In order to meet the financial crisis, the partners
of the said firm came forward to sell the schedule property
and the complainant who was in search of the property
has agreed to purchase the same for a valuable
consideration. On 11-05-2022 sale agreement came to be
entered between the complainant and partners of M/s
Skanda Developers in respect of the schedule property for
a consideration of Rs.29,70,000/-. The complainant has
paid an advance amount of Rs.20,00,000/- through RTGS
to the account of accused. The partners have agreed to
execute the registered sale deed by receiving balance
consideration amount. In the agreement there is clear
mention that if the accused and other partners failed to
execute the sale deed in favour of complainant, they have
to pay Rs.20,00,000/- with interest at 2% on the advance
consideration amount.
3. It is submitted that the complainant was ready to
pay the balance consideration amount and requested the
accused and others to come forward to register the sale
deed in his favour. The partners of M/s Skanda
Developers have postponed the matter and failed to
SCCH-24 4 C.C.13494 of 2022
execute the registered sale deed and thereby failed to
comply the terms and conditions of the sale agreement.
4. When the accused and other partners failed to
execute the register sale deed, in the first week of July
2022 the complainant has contacted the accused and
other partners and requested to execute the sale deed. At
that time all of them told the complainant that no sites
are available at present for sale and assured to repay the
advance consideration amount with interest at 2% and
towards the discharge of the liability the accused has
issued three disputed cheques bearing No. 018717 dated
10.07.2022 for Rs.10,00,000/-, bearing no.018716, dated
15.07.2022 for Rs.10,00,000/- and cheque bearing
no.018715, dated 30.07.2022 for Rs.4,40,000/-. All the
cheques were drawn on Union Bank of India,
Ananthanagar branch, Bengaluru and all the cheques
were duly signed by the accused.
5. As per the instruction of accused, the complainant
has presented the cheque no.018717 for encashment on
14.07.2022 through his banker Karnataka Bank Ltd,
Kolar branch, account maintained at Rajajinagar branch,
Bengaluru but same was dishonored for the reason with
bank endorsement as “Funds insufficient dated
15.07.2022.
SCCH-24 5 C.C.13494 of 2022
6. Again the complainant contacted the accused and
demanded to pay the cheque amount but the accused has
requested to represent the cheque no. 018716. Believing
the words of the accused the complainant has presented
the said cheque for enchashment, but it was dishonored
for the reason Funds Insufficient on 25.07.2022.
7. Again the complainant contacted the accused and
demanded to pay the cheque amount but the accused has
requested to represent the cheque no. 018715. Believing
the words of the accused the complainant has presented
the said cheque on 30.07.2022 for encashment, through
his banker Karnataka Bank Ltd, Kolar branch, but it was
dishonored for the reason Funds Insufficient on
01.08.2022.
8. Thereafter, the complainant got issued legal notice
on 11.08.2022 through RPAD to the accused and the
same was returned as UNCLAIMED, RETURN TO
SENDER on 24.08.2022. In spite of receipt of notice, the
accused did not choose to pay the amount covered under
the above said cheque. Accordingly, the accused has
committed an offence punishable under Sec.138 of N.I
Act, hence, the complaint.
SCCH-24 6 C.C.13494 of 2022
9. After recording the sworn statement of the
complainant and also verifying the documents, cognizance
was taken against the accused for the offence punishable
under Sec. 138 of N.I. Act. The accused on receiving the
summons appeared before the court through his counsel,
he was enlarged on bail and his plea was recorded. The
accused pleaded not guilty and claimed to be tried. Hence,
the case was posted for evidence of the complainant.
10. The complainant got examined himself as PW.1
and got marked documents as Exs.P1 to 10. Then, the
case was posted for recording the statement of accused
under Sec.313 Cr.P.C. In the statement U/s 313 Cr.P.C.,
the accused has denied all the incriminating evidence
appearing against him and claimed to be tried. The
accused has examined himself as DW.1.
11. Heard arguments of learned counsel for
complainant and accused and perused the materials
placed on record. The following points that arise for my
consideration;
POINTS
1. Whether complainant proves beyond
all reasonable doubt that accused
has committed an offence
punishable under Section 138 of
SCCH-24 7 C.C.13494 of 2022
2. What order?
12. My findings to the above points are:
Point No.1:- In the Affirmative.
Point No.2:- As per the final order for the
following ;
REASONS
13. POINT NO.1: It is the case of the complainant
that, accused in discharge of legally recoverable debt of
Rs.24,40,000/- has issued three cheques and when the
cheques were presented for encashment, same were
returned with an endorsement “Funds Insufficient”.
Though the said fact was brought to the notice of the
accused by issuing legal notice but accused has failed to
repay the cheque amount.
14. In order to substantiate the said contention, the
complainant got examined himself as Pw1 and given
evidence in consonance with the averments of the
complaint. If the documents placed on record is perused,
ExP1 to ExP3 are the cheques issued by the accused
which relates to his account . It is deposed by Pw1 that
cheques in question were issued for discharge of liability.
The cheques in question were presented by the
SCCH-24 8 C.C.13494 of 2022
complainant through his banker which was returned with
memos dated: 15.07.2022, 25.07.2022 and 01.08.2022 as
per ExP4, 5 and 6 stating ‘Funds Insufficient’. Hence, he
got issued legal notice through RPAD as per Ex.P.7. The
postal receipt is marked at Ex.P.8. The postal cover is
marked at Ex.P9 and Ex.P10 is the sale agreement.
15. The accused while admitting that he is running
real estate business under the name and style M/s
Skanda Developers, has taken the defence that in the last
of week of June -2021 the complainant and his son in law
by name Srinivas Reddy came to the site where layout
formation was going on and expressed their intention to
purchase the site and they had Negotiation with the
accused. They have collected necessary documents
pertaining to the site. It was agreed to purchase the site
for a consideration of Rs.29,70,000/-, out of which the
complainant had paid sum of Rs.10,00,000/- each on 23-
07-2021 and 10-08-2021 by transferring the said amount
to the account of the accused. At that time the
complainant has collected the disputed three cheques
bearing the signature of accused mentioning the amount ,
name of the complainant etc but not the dates and said
cheques were taken by the complainant as a security for
the sale of the site property for a consideration of
Rs.29,70,000/- and in case accused failed to execute the
SCCH-24 9 C.C.13494 of 2022
registered sale deed in favour of the complainant then
accused is liable to repay advance amount of
Rs.20,00,000/- with interest at 2% on the advance
amount of Rs.20,00,000/- which comes around
Rs.4,40,000/- and for the additional amount of
Rs.4,40,000/- the third cheque was issued to the
complainant. After issuance of three cheques when the
accused demanded the complainant to pay the balance
amount of Rs.9,70,000/- and to get the registered sale
deed in his name, at that time the complainant told that
he had no financial capacity to pay the balance amount
and sought some time to pay the balance amount and
accordingly at the instance of the complainant an
agreement of sale dated 11-05-2022 was executed. The
accused demanded the complainant to return the three
cheques given as security. The complainant told that he
will return the cheque at the time of registration of the
sale deed. When the complainant did not come forward to
get the sale deed registered in his name by paying balance
amount, the accused decided to sell the said property in
favour of third party and agreed to return sum of
Rs.20,00,000/- to the complainant which was received by
him as advance amount. In the mean time, the accused
has presented the said three cheques. It is categorically
stated by the accused that he is always ready either to get
SCCH-24 10 C.C.13494 of 2022
the registered sale deed executed in the name of the
complainant by receiving balance consideration amount
Rs.9,70,000/- or to return the advance amount of
Rs.20,00,000/-. It is submitted that since accused has
not violated the terms and conditions of the agreement
instead complainant himself has violated the terms and
conditions of the agreement, he is not liable to pay the
disputed cheque amount of Rs.4,40,000/- and contended
that he is ready to pay the cheque amount of
Rs.10,00,000/- each .
16. In order to probablise the defense, the accused
got examined himself as DW1.
17. As accused has admitted his signature in the
Ex.P1 to 3, the learned counsel for complainant has
referred the judgment reported in AIR 2020 SC 945
between APS Forex Services Pvt Ltd., vs. Shakti
International Fashion Linkers & Ors., wherein it was
observed that “Once the issuance and signature on
cheque is admitted, there is always a presumption in
favour of complainant that there exist legally enforceable
debt or liability. No evidence led by accused to rebut the
presumption. Plea by accused that cheque was given by
way of security and same has been misused by
SCCH-24 11 C.C.13494 of 2022
complainant is not tenable hence accused is liable to be
convicted”.
18. In 2022 (1) AKR 861 between S N Raju Vs. R Raj
it was observed that ” when issuance of cheque and the
signature in the cheque is not disputed , the complainant
enjoys presumption u/Sec. 118 and 139 of NI Act.
19. In ILR 2008 Kar 1883 between Lath K Nair Vs.
M/s Gold Mohar Food and Feeds Ltd., it was held that ”
cheque issued for repayment of loan or security makes no
difference u/Sec. 138 of NI Act. If the cheque is
dishonoured then the accused is liable to pay the cheque
amount”.
20. In the light of the contention taken by the
complainant and the defence taken by the accused, now
the core point to be decided is whether the complainant
has proved the guilt of the accused beyond all reasonable
doubt and whether the materials placed on record
probablise the defense taken by the accused. In order to
arrive at just conclusion, court has to look in to the
evidence in detail. But before adverting to appreciate the
oral and documentary evidence it is better to have glance
on the present legal position and to see whether
complainant has complied all the requirements contained
SCCH-24 12 C.C.13494 of 2022
in Sec.138 of NI Act so as to bring home the guilt of the
accused. If so, whether accused has rebutted the legal
presumption available to the complainant under Sec.139
of the Act by adducing the probable defense .
21. It is held by the full bench of our Apex Court in
the case of Rangappa Vs. Mohan reported in 2010 (1)
DCR 706 that;
“The Statutory presumption mandated by
sec.139 of the Act, does indeed include
the existence of a legally enforceable debt
or liability. However, the presumption U/S
139 of the Act is in the nature of a rebut-
table presumption and it is open for the
accused to raise a defence wherein the
existence of a legally enforceable debt or
liability can be contested”.
22. In view of the above decision, once the cheque is
admitted, the statutory presumption would automatically
fall in favour of the complainant that the alleged cheque
was issued for discharge of an existing legally enforceable
debt or liability against the accused and the burden will
shift on to the accused to rebut the same.
23. The accused can only be held guilty of the
offence under Section 138 NI Act, if the ingredients of
section 138 of NI Act are proved by the complainant co-
extensively. Additionally, the conditions stipulated under
SCCH-24 13 C.C.13494 of 2022
Section 142 NI Act have to be fulfilled. At the outset, an
essential ingredient of Section 138 of N.I Act is that
cheque in question must have been issued towards legal
liability. Under Section 118 of the Act, a presumption
shall be raised regarding consideration, date, transfer,
endorsement and regarding holder in the case of
Negotiable Instruments. Even under Section 139 of the
Act, a rebuttable presumption shall be raised that, the
cheque in question was issued regarding discharge of
legally enforceable debt. These presumptions are
mandatory provisions that are required to be raised in
case of negotiable instruments.
24. If the oral and documentary evidence placed on
record is perused, it is not in dispute that accused and
other partners of M/S Skanda Developers by agreeing to
sell the schedule property in favour of the complainant for
a consideration of Rs.29,70,000/- have executed sale
agreement as per Ex.P10 agreeing to execute the
registered sale deed by getting ready with all the
documents pertaining to the schedule property . It is also
not in dispute that out of the sale consideration of
Rs.29,70,000/-, the complainant had paid sum of
Rs.10,00,000/- on 23-07-2021 and sum of
Rs.10,00,000/- on 10-08-2021 and in all sum of
SCCH-24 14 C.C.13494 of 2022
Rs.20,00,000/- as part sale consideration. The said part
consideration of Rs.20,00,000/- was paid nearly 7
months prior to the sale agreement entered in to between
the complainants and accused. It is not in dispute that in
order to get the sale deed registered in favour of the
complainant, the accused has to be get ready with all
documents pertaining to the schedule property and
complainant has to be ready with balance sale
consideration of Rs.9,70,000/-. It can be gathered that
out of the sale consideration of Rs.29,70,000/-, the
accused had paid major portion of the consideration
amount to the tune of Rs.20,00,000/- and there is meager
portion of sale consideration to the tune of Rs.9,70,000/-
is remained to be paid by the complainant .
25. Though the accused during the cross
examination of PW.1 so also in his evidence in chief in an
unequivocal term has admitted sum of Rs.20,00,000/-
receive by him during the year 2021 towards part sale
consideration , but during the cross examination of PW.1
has posed suggestion that the complainant has not
obtained any receipt from the accused regarding payment
of sum of Rs.20,00,000/- as advance. When accused has
admitted the receipt of Rs.20,00,000/-, even if
complainant has not received any receipt for such
SCCH-24 15 C.C.13494 of 2022
payment and has not produced such receipt before the
court it would not make any difference and it would not
effect the case of the complainant . The Pw1 has deposed
that by reposing trust on the accused he has not insisted
to issue receipt for having paid sum of Rs 20,00,000 /-
26. Admittedly no sale deed has been executed in
favour of the complainant and complainant has not paid
balance sale consideration of Rs.9,70,000/. If the
admitted document at Ex.P10 is perused, wherein there is
clear recital that the balance sale consideration of
Rs.9,70,000/- has to be paid at the time of registration of
sale deed. Hence there is no obligation on the part of the
complainant to pay the balance consideration of
Rs.9,70,000/- earlier to the registration of the sale deed,
but as per the recital of Ex.P10, there is obligation on the
part of the accused to get ready with all the documents
pertaining to the schedule property prior to the execution
of sale deed.
27. The accused has bent upon contended that
complainant had no financial capacity to pay the balance
consideration of Rs.9,70,000/- hence only sale deed was
not yet executed and since the complainant had no money
to pay the balance consideration amount, at his instance
SCCH-24 16 C.C.13494 of 2022
the sale agreement as per Ex.P10 was entered in to. It is
the case of the accused that at the time of Rs.20,00,000/-
given by the complainant, he has collected disputed
cheque as security. The accused has not disputed the fact
of his agreed to pay interest at the rate of 2% on the
advance amount in case if he failed to abide by the terms
and conditions of the agreement. It is true that in the sale
agreement there is no time limit fixed for execution of the
registered sale deed. Hence, in the present case, time is
not the essence of the contract and as and when accused
is ready with the documents he has to execute the sale
deed by receiving balance consideration amount. Merely
because time is not the essence of the contract it does not
mean that accused is at liberty to get the sale deed
executed in favor of the complainant as and when he
pleases . It has to be executed within reasonable time
because major portion of amount is in the hands of
accused and from the month of July 2021 he is enjoying
sum of Rs 20,00,000 of the complainant .
28. The complainant has bent upon contended that
he is ready to pay the balance consideration at the time of
execution sale deed but since the schedule property is not
available at the location stated by the accused and the
document pertaining to the alleged schedule property is
SCCH-24 17 C.C.13494 of 2022
not in the name of the accused and other partners they
have not come forward to execute the registered sale deed.
Thus the complainant and accused blames each other as
the reason for non execution of the sale deed.
29. It is vehemently submitted by the learned
counsel for accused that if the complainant is ready to
pay the balance consideration amount then they are ready
to execute the registered sale deed and that complainant
has not deposited the balance sale consideration amount
before the court, hence he has no financial capacity to pay
the balance consideration amount and that having no
financial capacity to pay the balance consideration
amount, the complainant has failed to full fill the terms of
the agreement, hence the accused is not liable to pay the
cheque amount of Rs.4,40,000/-. The accused has
categorically stated that he is ready to pay the cheque
amount of Rs.10,00,000/- each as per Ex.P1 and Ex.P2.
30. Per contra, it is vehemently argued by the
learned counsel for complainant that though sum of
Rs.9,70,000/- is not in his bank account, but he has
money with him to pay the balance consideration amount
as he is rearing cows and from that income so also from
the income earned from coolie work he has sufficient
SCCH-24 18 C.C.13494 of 2022
money with him and that since the accused is not ready
with the documents it could not possible to execute the
registered sale deed and it is not at all possible to execute
the sale deed by the accused and others for the reason
that no property is available in the hands of accused and
other partners. It is further argued by the learned counsel
for complainant that if really accused had documents
pertaining to the schedule property in their name they
could have produce the said document before the court
and if accused has document with him then complainant
is ready to get the sale deed registered in his name
without insisting for return of part consideration amount
with interest.
31. Though the accused has submitted that he has
no objection to produce the document before the court
but till this date even after the submission of the counsel
for complainant that they are ready to get the sale deed
executed in their favour provided accused places the
documents pertaining to the schedule property in his
name, but till this date accused has not produced any
document pertaining to the said property. When
complainant has disputed the very existence of schedule
property, nothing prevented the accused from producing
the document pertaining to the said property so also the
document to prove that the said property is in the name of
SCCH-24 19 C.C.13494 of 2022
accused and other partners and to prove that they have
right in the schedule property so as to execute the sale
deed in favour of the complainant. As observed supra, as
per the Ex.P10 the primary obligation is on the part of the
complainant to get ready with the document and the
obligation of complainant to pay the balance
consideration amount comes next.
32. During the cross examination of PW.1,
suggestion was posed by the learned defence counsel that
at the time of Negotiation, the accused had given one set
of document to the complainant and after verifying the
document only the complainant has come forward for
purchase of the schedule property. But the PW.1 has
denied the said fact. If really, one set of document
pertaining to the schedule property was given to the
complainant and if really the original documents are in
the possession of the accused and if really the said
document discloses that accused and others are the
owner of the said property then nothing prevented the
accused from producing the said document and get it
marked as exhibits. So far as the line of argument
canvassed by the learned defence counsel regarding not
depositing part consideration amount of Rs.9,70,000/- by
the complainant and thereby not proving before the court
SCCH-24 20 C.C.13494 of 2022
as to his readiness and willingness to perform his part of
contract under Section 16 (C) of the Specific Relief Act is
concerned, it is not a suit for Specific Performance of
Contract filed by the complainant so as to deposit the part
of sale consideration amount before the court.
33. The accused has contended that cheques in
question was given by him at the time when complainant
has paid the part consideration amount of Rs.20,00,000/-
and the complainant has received the said three cheques
as security for repayment of the advance amount and the
third cheque for Rs.4,40,000/- is towards interest on the
advance amount in case the accused failed to full fill his
part of contract. The DW.1 has admitted his signature in
the three cheques and also admitted his writings in the
three cheques except the writings as to the dates .
34. At the cost of repetition, it is bent upon
contended by the accused that he had given disputed
cheques at the time when complainant has given sum of
Rs.20,00,000/- to him as security. Admittedly, the
complainant has given Rs.10,00,000/- on 23-07-2021
and sum of Rs.10,00,000/- on 10-08-2021. It is not made
known by the accused among the two dates mentioned
above on which date he has given the disputed cheques. It
is admitted by accused that the third cheque for
SCCH-24 21 C.C.13494 of 2022
Rs.4,40,000/- was given towards interest at 2% on the
advance amount of Rs.20,00,000/- in case the accused
failed to full fill his part of contract. The case of the
complainant is that the accused had given the said
cheque on the dates mentioned in the cheques in the year
2022 at the time when complainant demanded to execute
the sale deed and when the accused pleaded inability to
execute the sale deed. If the version of the accused is
accepted as true then the question that would arise as to
if really accused has given the said cheques on 23-07-
2021 or on 10-08-2021, then how could the accused
came to know at that time that the interest on the
advance amount would be Rs.4,40,000/- only and how
could he accurately calculated the interest amount on the
part consideration amount would come to Rs.4,40,000/-.
One cannot anticipate or predict the interest accrued to
the said principal amount and duration of the interest etc.
Hence, the very admission of the accused that he had
given all the three cheques by mentioning the amount
would supports the case of complainant and the evidence
given by the accused to the effect that he had given the
said cheques at the time when sum of Rs.20,00,000/-
received by him would falsify his defence . Hence the very
amount of Rs.4,40,000/- mentioned in the Ex.P3 towards
interest would clearly reveals that the said cheques were
SCCH-24 22 C.C.13494 of 2022
given by the accused on the dates mentioned in the
cheques only but not either on 10-08-2021 or on 23-07-
2021. It is because accused has failed to perform his part
of contract by not getting ready with the documents
pertaining to the schedule property, in compliance of the
terms and conditions of the agreement of sale, he has
given the disputed cheques.
35. The learned counsel for accused has much
argued that the agreement of sale is still in force and
when the agreement of sale is not yet canceled the present
complaint is not maintainable. It was further argued by
the learned defense counsel that the case of the
complainant is based on the agreement of sale hence
present proceeding is not maintainable and complainant
ought to have filed civil suit for specific performance of
Contract and that since the complainant has no balance
sale consideration of Rs.9,70,000/- and has no capacity
to pay the court fee, he has avoided to file the civil suit. It
is further submitted that the complainant himself has
deposed that he had seen the property proposed to be
sold in his favour and that without the existence of
property and without verifying the document pertaining to
the property no person would come forward to purchase
the property by paying part consideration amount. The
SCCH-24 23 C.C.13494 of 2022
learned counsel has further argued that the complainant
has not issued any notice to the accused demanding him
to execute the registered sale deed and thereby has not
expressed his ready and willingness to perform his part of
the contract. Hence, it is the complainant who is at fault
and it is he who has not performed his part of contract,
hence the accused is not liable to pay the cheque amount
of Rs.4,40,000/-.
36. In the light of the argument canvassed by the
learned counsel for accused, if the evidence of PW.1 is
perused, it is true that PW.1 in his evidence has deposed
that at the time of Negotiation of sale, the accused had
shown the property which he propose to purchase. He
further admitted that he has not given legal notice to the
accused asking him to execute the sale deed by receiving
the balance amount. But Dw1 has clearly deposed that he
has orally demanded the accused to provide document
pertaining to the schedule property and to execute the
sale deed but since accused had no document with him
pertaining to the schedule property he has not come
forward to execute the sale deed, instead has issued the
disputed cheques. As observed supra, even though the
complainant has categorically stated that the document
pertaining to the schedule property is not in the name of
SCCH-24 24 C.C.13494 of 2022
accused and when the complainant has gone to the extent
of saying that if complainant produces the document
before the court he is ready to withdraw the case and
ready to get the sale deed registered in his name and
when DW.1 in his evidence has deposed that he has no
objection to produce the document before the court,
under such circumstances if really the documents
pertaining to the schedule property is in proper order and
same are in the name of accused , nothing prevented the
accused from producing the said document before the
court. Hence, non production of material documents, an
adverse inference can be drawn against the case of the
accused.
37. The learned counsel for accused has much
argued regarding Sec. 16 (c) of the Specific Relief Act and
Sec. 73 of Indian Contract Act and referring Sec. 73 of
Indian Contract Act, the learned counsel has submitted
that if breach has been committed by the accused then
only accused is liable to pay compensation otherwise not.
38. Even though it is a criminal case but since the
counsel for accused has referred the specific Relief Act
and Indian Contract Act, it is better to have glance on the
said subject.
SCCH-24 25 C.C.13494 of 2022
39. Explanation to Sec.16(c)(i) provides that where a
contract involves the payment of money it is not essential
for the plaintiff to actually tender to the defendant or to
deposit in court any money except when so directed by
the court.
40. It is well settled that Readiness and willingness
cannot be treated as a strict Jacket Formula. These have
to be determined from the entirety of facts and
circumstances relevant to the intention and party
concerned.
41. In a ruling reported in 2013(2) KCCR 1102
S.Kashinath / Smt Padmini Ramnath wherein plaintiff
had paid 90% of the sale consideration. Defendant failed
to receive the balance and execute the sale deed.
Defendant took various stands as to transaction but
admitted the execution of the agreement. In the given set
of facts the suit filed by the plaintiff was decreed. In the
said case it was further observed that “the very
transaction between the plaintiff and the defendant and
some of the transactions like borrowing and lending in
times of difficulties between the parties, would
demonstrate that the plaintiff had the capacity to pay the
remaining balance amount.
SCCH-24 26 C.C.13494 of 2022
42. Here in also out of the total consideration,
major portion has already been paid to the accused and
there remains meagre amount of Rs.9,70,000 /- to be
paid.
43. It is relevant to state here that ExP10 was
executed on 11/5/2022 and advance amount of
Rs.20,00,000/- was paid in the month of July and August
2021. The amount of Rs.20,00,000/- is in the hands of
accused since July/ August 2021 without any interest.
The court can take judicial notice that value of the
immovable property in city like Bangalore is raising day
by day. From the date of payment of part consideration
amount in the month of July/ August 2021 till this day
the value of the schedule property may raise to many fold
than the price fixed under the ExP10. Under such
circumstances if really the accused was ready to execute
the sale deed, there is no even remote possibility of
complainant not agreeing to get the sale deed executed in
his name by causing loss to him because if he purchased
the schedule property for a consideration of
Rs.29,70,000/- of which Rs.20,00,000/- he has already
paid, he may sell the said property for much higher price
than the price for which he is purchasing the property.
SCCH-24 27 C.C.13494 of 2022
44. When execution of agreement of sale is proved
and when in the agreement of sale there is recital to the
effect that if the accused failed to execute the sale deed
then he has to pay the interest on the advance amount at
2% and when as per the Ex.P10 it is only after the
accused is get ready with the document the question of
execution of sale deed and payment of balance
consideration would arise and when accused has failed to
prove that he was ready with the document and when the
complainant has proved the existence of contract and
proved that there is breach of contract on the part of the
accused and when accused himself admittedly has issued
the disputed cheques, under such circumstances the
accused is liable to pay the cheques amount and it can be
said that cheques are issued towards discharge of legally
enforceable debt only .
45. So far as the argument canvassed by the
accused as to the agreement of sale is still in force is
concerned , it is true that agreement of sale is still in force
and the question of cancelation of the sale agreement
would come only if the accused repays the advance
amount with interest i.e the amount mentioned in the
ExP1 to ExP3. If sale agreement is cancelled prior to the
repayment of the cheque amount, then complainant has
SCCH-24 28 C.C.13494 of 2022
no remedy to claim either before the criminal court or
before the civil court.
46. So far as the contention taken by the
complainant that he has not gone through the documents
pertaining to the schedule property at the time of sale
negotiation is concerned, it is true that usually the
vigilant purchaser prior to enter in to any agreement /
contract would verify the documents, but as observed
supra the complainant is an aged and village rustic. When
complainant has gone to the extent of paying advance
amount of Rs.20,00,000/- without insisting for receipt
from the accused for having paid such a huge amount
and without entering in to any sale agreement and he has
given such a huge amount to the accused on trust and
confidence which he had with the accused, under such
circumstances there is every reason to believe that by
reposing confidence on the accused only the complainant
has not insisted for providing documents pertaining to the
property and without going through the documents he
proceeded to purchase the property .
47. So far as the contention taken by the accused as
to issuance of the said cheque as security is concerned,
admittedly the accused has not repaid the amount
mentioned in the cheques which were allegedly given as
SCCH-24 29 C.C.13494 of 2022
security. At this juncture it would be relevant to refer here
the judgment referred in Crl.Appeal No.1269-1270/2021
between Sripati Singh (Since deceased) Through his son
Gaurav Singh Vs., The State of Jharkhand & Anr., the
Hon’ble Supreme Court has observed that “a cheque
issued as a security pursuant to a financial transaction
cannot be considered as a worthless piece of paper under
every circumstance, ‘Security’ in its true sense is the state
of being safe and the security given for a loan is
something given as a pledge of payment. It is given,
deposited or pledged to make certain the fulfillment of an
obligation to which the parties to the transaction are
bound. If in a transaction, a loan is advanced and the
borrower agrees to repay the amount in a specified time
frame and issues a cheque as security to secure such
repayment. If the loan amount not repaid in any other
form before the due date or if there is no other
understanding or agreement between the parties to defer
the payment of amount, the cheque which is issued as
security would mature for presentation and the drawee of
the cheque would be entitled to present the same. On
such presentation, if contemplated under Section 138 and
the other provisions of N.I.Act would flow”.
“When a cheque is issued and is treated as ‘security’
towards repayment of an amount with a time period being
SCCH-24 30 C.C.13494 of 2022stipulated for repayment, all that it ensures is that such
cheque which is issued as ‘security’ cannot be presented
prior to the loan or the installment maturing for
repayment towards which such cheque is issued as
security. Further, the borrower would have the option of
repaying the loan amount or such financial liability in any
other form and in that manner if the amount of loan due
and payable has been discharged within the agreed
period, the cheque issued as security cannot thereafter be
presented. Therefore, the prior discharge of the loan or
there being an altered situation due to which there would
be understanding between the parties is a sine qua non to
not present the cheque which was issued as security.
These are only the defences that would be available to the
drawer of the cheque in a proceedings initiated under
Section 138 of the N.I.Act. Therefore, there cannot be a
hard and fast rule that a cheque which is issued as
security can never be presented by the drawee of the
cheque”.
48. In the back ground of aforesaid observation,
when complainant has proved that accused has issued
cheques as per ExP1 to Ex.P3 then presumption under
section 139 of NI Act can be raised. Though presumption
under section 139 NI Act is rebuttable presumption but
accused for the reason stated above failed to rebut the
SCCH-24 31 C.C.13494 of 2022
presumption. In the light of the discussion herein above,
this court is of the considered opinion that complainant
has proved that accused has committed offence
punishable under Section 138 of Negotiable Instruments
Act. Accordingly, I answer point No.1 in the affirmative.
49. POINT No.2 :- The Negotiable Instruments Act is
a special enactment, and the provisions of the Act prevail
over the general provisions contained in Code of Criminal
Procedure. Therefore, keeping the relevant provisions of
the Act in mind the sentence is to be passed. In the light
of the reasons on the point No.1, I proceed to pass the
following;
ORDER
Acting under Sec. 255 (2) of Cr.PC, the
accused is found guilty of the o/p/u/s 138
read with section 142 of NI Act and he is
sentenced to pay fine of Rs.24,50,000/-
(Rupees Twenty Four Lakh Fifty Thousand
Only) out of which Rs.24,45,000/- shall be
paid as compensation to the complainant
under Sec.357 of CRPC and Rs.5,000/- shall
be payable to the State.
SCCH-24 32 C.C.13494 of 2022
In the event of default in payment within a
period of 2 months, the accused shall be
convicted to simple imprisonment for a period
of 6 months.
The bail bond of accused and that of
surety stands cancelled.
Supply free copy of the judgment to
the accused.
(Dictated to the stenographer directly on the computer, corrected and then
pronounced by me in open court, on this the 4th day of March 2025)
(ROOPASHRI)
XXII Addl. SCJ & ACJM
Bengaluru.
:ANNEXTURE:
LIST OF WITNESSES EXAMINED ON BEALF THE COMPLAINANT
P.W.1 : Sri. Ramachandra ReddyLIST OF DOCUMENTS MARKED ON BEHALF F COMPLAINANT:
Ex.P.1 to 3 : Original three Cheques
Ex.P 1(a) : Signatures of the accused
to 3(a)
Ex.P.4 to 6 : Bank endorsements
Ex.P.7 : Legal Notice
Ex.P.8 : Postal receipt
Ex.P.9 : Postal cover
SCCH-24 33 C.C.13494 of 2022
Ex.P.10 Sale agreement dated 11-05-2022
LIST OF WITNESSES EXAMINED BY THE ACCUSED
DW.1 : – Mr.P.S.KumarLIST OF DOCUMENTS MARKED ON BEHALF OF ACCUSED:
NIL
XXII Addl. SCJ & ACJM
Bengaluru.
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