Bangalore District Court
Manappuram Finance Ltd vs Subhash Dupargude on 1 March, 2025
1 CC.NO.22469/2021
KABC030616602021
Presented on : 02-09-2021
Registered on : 02-09-2021
Decided on : 01-03-2025
Duration : 3 years, 5 months, 29 days
IN THE COURT OF THE XXVIII ADDL.CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M,
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 01st DAY OF MARCH-2025
C.C.NO.22469/2021
Complainant: M/s.Manappuram Finance Ltd.,
Having its registered office
at Manappuram House, Valappad,
Thrissur, Kerala-680567 and branch
O/at No.21/1, 4th Floor, Jelita Tower,
Mission Road, Bengaluru-560027.
R/by its Assistant Manager
and Authorized Signatory,
Mr.Satheesha.N.
(By Sri.Narthana.G.U.,Adv,.)
V/s
Accused: Subhash Dupargude,
8/30, A Type Cidco Colony Sec 13,
New Panvel Near Kali Mata Mandir,
Raigarh (MH), Maharashtra-410206.
(By Sri.T.L.Nagaraju.,Adv.,)
2 CC.NO.22469/2021
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 company incorporated under provisions
of the Companies Act and licensed by the Reserve Bank
of India under the banking regulations Act. The accused
approached the complainant seeking financial assistance
of Rs.8,77,000/- to purchase LPO1612 vehicle registration
No.MH04FK0487. Further upon request of the accused,
after verification of all the documents the complainant
sanctioned the loan and thereby entered into a loan
contract No.MFMHMFLONS000005112391. Further at the
time of availing the loan the accused has agreed to abide
by the terms and conditions, he would repay the loan
amount by way of monthly installments without any
default/delay. Further stated that subsequent to the
availing of loans amount, inspite of repeated requests and
follow up by the complainant for payment of the
outstanding loan amount, the accused has failed to make
payment and he was a chronic defaulter. It is further
stated that the accused had approached the complainant
for making the payment had issued the cheque
No.141554 dated: 17.09.2020 for Rs.8,64,555/- drawn on
3 CC.NO.22469/2021
Indian Bank, New Panvel, Navi Mumbai Branch. As per
the instructions of the accused the complainant had
presented the said cheque for encashment through its
banker Axis Bank, Cunningham Road, Bengaluru. But the
said cheque was dishonored on 24.09.2020 as “Payees
Endorsement Required”. Thereafter, on 21.10.2020 the
complainant got issued a legal notice to the accused
through its counsel calling upon him to pay the cheque
amount. The said notice was returned as “Addressee left”.
Inspite of issuance of the notice, the accused neither reply
to the notice nor paid the cheque amount. As such, the
accused have committed an offence punishable under
section 138 of N.I.Act. Hence, the present complaint came
to be filed before this court on 27.11.2020.
3. After the complaint was filed, the cognizance of
the offence cited therein was taken and it was registered
as P.C.R.No.9723/2021. Sworn statement of the
complainant was recorded. Since there were sufficient
materials to proceed against the accused, an order was
passed on 02.09.2021 to register the case in Register
No.III.
4. Thereafter, summons was issued to the accused
and he appeared before the court through advocate and
secured bail. He was furnished its necessary papers as
complied under section 208 of Cr.P.C. Thereafter, the plea
4 CC.NO.22469/2021
of the accused was recorded by the court. He has pleaded
not guilty and claimed to be tried.
5. The complainant in support of its case, have
examined its Senior Manager as PW.1 and got marked 10
documents at Ex.P.1 to 10 and closed its side. PW.1 was
fully cross examined by the accused.
6. After closer of the evidence of the complainant,
the statement under section 313 of Cr.P.C., was recorded.
He has denied the incriminating evidence appearing
against him. In his defence, the accused was examined as
DW.1 and no documents were marked on his behalf.
7. I have heard the arguments on the complainant
side and perused the written argument filed by the learned
counsel for the complainant and also perused the material
placed on record.
8. Inspite of sufficient opportunity, the learned
counsel for the accused did not appear before the court
and not address his argument. Hence, the argument on
the defence side taken as nil. Further inspite of sufficient
opportunity the learned counsel for the accused failed to
file written argument.
9. When the case is posted for judgment, the learned
counsel for the accused advanced the case and adduced
further evidence of DW.1 and 05 documents were marked
at Ex.D.1 to 5.
5 CC.NO.22469/2021
10. Inspite of sufficient opportunity, the learned
counsel for the accused not addressed his argument.
Hence, the argument on the defence side taken as nil.
11. Upon hearing the arguments and on perusal of
the material placed on record, the following points arise for
my consideration:
1.Whether the complainant proves the existence of
legally enforceable debt/liability.?
2.Whether the complainant further proves that the
accused had issued the cheque-Ex.P.1, towards
the discharge of the said legally enforceable
debt/liability.?
3.Whether the complainant further proves that the
cheque-Ex.P.1 was dishonored for the reasons
“Payees Endorsement Required” and thereafter the
accused had failed to repay the same within the
statutory period, inspite of receipt of the legal
notice.?
4.Whether the accused have thus committed an
offence punishable under section 138 of N.I.Act.?
5.What order?
12. My answers to the above points are as under:
Point No.1: In the Affirmative
Point No.2: In the Affirmative
Point No.3: In the Affirmative
Point No.4: In the Affirmative
Point No.5: As per final order, for the following;
6 CC.NO.22469/2021
:REASONS:
13. 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, 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
licensed by the Reserve Bank of India under the banking
regulations Act. The accused had approached the
complainant seeking financial assistance of Rs.8,77,000/-
to purchase LPO1612 vehicle bearing registration
No.MH04FK0487. Further upon request of the accused,
after verification of all the documents the complainant
sanctioned the loan and thereby entered into a loan
contract. Further at the time of availing the loan the
accused has agreed to abide by the terms and conditions,
he would repay the loan amount by way of monthly
installments without any default/delay. Subsequent to the
availing of loans amount, inspite of repeated requests and
persistent follow up by the complainant, the accused has
failed to make payment and he was a chronic defaulter.
Thereafter the accused had approached the complainant
for making the payment had issued the cheque in question
in favour of the complainant. As per the instructions of the
accused the complainant had presented the said cheque
for encashment through its banker. But the said cheque
was dishonored as “Payees Endorsement Required”.
7 CC.NO.22469/2021
Thereafter, the complainant got issued a legal notice to the
accused through its counsel calling upon him to pay the
cheque amount. Inspite of issuance of the notice, the
accused neither reply to the notice nor paid the cheque
amount. As such, the accused have committed an offence
punishable under section 138 of N.I.Act. Hence, the present
complaint came to be filed before this court.
14. 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
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
8 CC.NO.22469/2021
cheque of the nature referred to in section 138 for
the discharge, in whole or in part, of any debt or
other liability.”
15. 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.
16. It is also well established that an accused for
discharging the burden of proof placed upon him under a
statute need not examine himself. He may discharge his
burden on the basis of the materials already brought on
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”.
17. Under the light of above extracted provisions of
the Act, I have perused the oral and documentary
evidence placed on record. In support of the case, the
complainant have examined its Senior Manager as P.W.1
9 CC.NO.22469/2021
and 10 documents were marked at Ex.P.1 to 10. In the
chief examination P.W.1 has repeated the contents taken
by the complainant in the complaint. Ex.P.1 is the cheque
issued by the accused in favour of the complainant dated:
17.09.2020 for Rs.8,64,555/-. Ex.P.1(a) is the signature of
the accused. Ex.P.2 is the bank memo dated: 24.09.2020
informing the dishonor of the cheque as “Payees
Endorsement Required”. Ex.P.3 is the office copy of legal
notice dated: 21.10.2020. Ex.P.4 is the postal receipt.
Ex.P.5 is the returned postal cover. Ex.P.5(a) is the
returned legal notice. Ex.P.6 is the complaint. Ex.P.7 is the
loan application. Ex.P.8 is the Hypothecation Agreement.
Ex.P.9 is the Account statement. Ex.P.9(a) is the certificate
under section 65(b) of Indian Evidence Act. Ex.P.10 is the
certified copy of the minutes of meeting extract.
18. I have perused the exhibits on which the
complainant have placed their reliance. On perusal of the
exhibits, it is clear that cheque in question was presented
for encashment within its validity. The bank endorsement
with a shara “Payees Endorsement Required”. The
complainant issued a legal notice within one month from
the date of receipt of memo. The notice was returned as
“left”. The complaint was filed on 27.11.2020, which is
within limitation. The transaction with the complainant is
not seriously disputed. The issuance of the cheque and
the signature on the cheque-Ex.P.1 is admitted.
Therefore, the documents on record clearly show that the
10 CC.NO.22469/2021
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 cheque was issued for legally
enforceable debt/liability. However, actual existence
debt/liability can be contested. The accused can rebut the
presumptions by raising probable defences and proving it
relying on the evidence of the complainant or by leading
his direct evidence.
19. The case was seriously contested by the
accused and the service of notice was disputed. The
notice was returned as “left” as per Ex.P.5. The counsel
for the accused cross-examined PW.1 in respect of non
service of notice. But PW.1 denied the same. Further
contended that the notice sent to the accused not served’;
that the accused has no knowledge of the notice as it was
not served on him; that the accused did not give reply
notice as the notice was not served on him; that he did not
produce any documents to show that the accused was not
residing at the said address, the notice was not served on
him and that the accused did not issue reply notice as he
was not residing at the said address. The counsel for the
accused submitted that no legal presumption can be
raised as the notice was sent to the wrong address and
the accused was not residing at the said address. On the
11 CC.NO.22469/2021
other hand, the counsel for the complainant cross
examined DW.1 in length in respect of address of the
accused, service of notice. He admitted that the address.
He further admitted that he has not given the reply notice.
When the notice at Ex.P.3, wherein the name of the
accused is appearing, was confronted.
20. On perusal of Ex.P.3, it is clear that the name of
the accused and address is appearing in the notice. The
same notice was sent to the accused. The accused not
given reply. There is no evidence on record to show that
the accused was residing at some other address other
than the address mentioned in the notice-Ex.P.3. The
above discussion clearly shows that the address
mentioned in the notice is the correct address of the
accused. As the notice was given to the accused and the
same notice was sent to him through RPAD, an inference
can be drawn that the notice was served on the accused.
Further the address mentioned in the notice being the
correct address of the accused, the presumption as per
Section 27 of General Clauses Act can be drawn. It states
that the notice sent through post shall be deemed to be
served, if it is properly addressed to a person to whom it is
sent. Therefore, even though the notice sent to the
accused through RPAD and returned with a postal shara
‘addressee left’, it is to be considered as deemed service
of notice. Even otherwise as per the judgment of the
Hon’ble Supreme Court of India has held in C.C Alavi Haji
12 CC.NO.22469/2021
V/s Palapetty Muhammed and another, reported in 2007
AIR SCW 3578, wherein it has been held para No.17 as
under;
17. It is also to be borne in mind that the
requirement of giving of notice is a clear departure
from the rule of Criminal Law, where there is no
stipulation of giving of a notice before filing a
complaint. Any drawer who claims that he did not
receive the notice sent by post, can, within 15 days
of receipt of summons from the court in respect of
the complaint under section 138 of the Act, make
payment of the cheque amount and submit to the
Court that he had made payment within 15 days of
receipt of summons (by receiving a copy of
complaint with the summons) and, therefore, the
complaint is liable to be rejected. A person who
does not pay within 15 days of receipt of the
summons from the Court along with the copy of the
complaint under section 138 of the Act, cannot
obviously contend that there was no proper service
of notice as required u/s.138, by ignoring statutory
presumption to the contrary under section 27 of the
G.C.Act and Section 114 of the Evidence Act. In our
view, any other interpretation of the proviso would
defeat the very object of the legislation. As
observed in Bhaskaran’s case (supra), if the ‘giving
of notice’ in the context of Clause (b) of the proviso
was the same as the ‘receipt of notice’ a trickster
cheque drawer would get the premium to avoid
receiving the notice by adopting different strategies
and escape from legal consequences of Section
138 of the Act.
21. 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 “left” and thereafter he appeared before the
13 CC.NO.22469/2021
court and contested the case by taking all probable
defences. Therefore he 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 27.11.2020, which is within limitation. The
accused admitted the issuance of cheque in favour of the
complainant and signature in the cheque. It is his defence
that the blank cheque was issued at the time of loan
transaction as a legal security. Therefore, the documents
on record clearly show that the complainant have
complied the ingredients of Section 138(a) to (c) of the
N.I.Act. Therefore, the presumptions under 118 and 139
of the N.I.Act arise in favour of the complainant. The
presumptions are rebuttable and the burden is on the
accused to rebut the presumptions. Once the issuance of
cheque and signature are proved, the presumption arises
in respect of the fact that the cheque was issued for
legally enforceable debt/liability. The accused can rebut
the presumption by raising probable defence and proving
it relying on the evidence of the complainant or by leading
his direct evidence.
22. In order disprove the case of the complainant,
the accused examined himself as DW.1 by way of affidavit
and 05 documents were marked at Ex.D.1 to 5. In the
chief examination D.W.1 has repeated the defence taken
by him. Ex.D.1 is the statement of account. Ex.D.2 is the
B-extract. Ex.D.3 is the hypothecation letter. Ex.D.4 is the
14 CC.NO.22469/2021
printout copy of RC book. Ex.D.5 is the certificate
U/s.65(b) of I.E.Act.
23. In order to attract the offence punishable under
section 138 of N.I.Act, the complainant is firstly required to
prove the existence of legally enforceable debt/liability, for
which the cheque came to be issued. The learned counsel
for the complainant has argued that from the evidence
placed on record, the fact that the accused had
approached the complainant for financial assistance of
Rs.8,77,000/- for purchase of LPO1612 vehicle
registration No.MH04FK0487. Accordingly, the
complainant and the accused entered into a loan
agreement as per Ex.P.7. The accused agreeing to repay
the said loan as per terms and conditions of the loan
contract. Thereafter, the accused defaulted in payment of
EMIs in time and as such the officials of the complainant
had approached the accused on several times requesting
him to repay the loan amount. Inspite of repeated request
the accused failed to repay the same. Thereafter, the
accused towards the discharge of the said amount, he had
issued the cheque-Ex.P.1 in favour of the complainant. He
further argued that the accused has not denied Ex.P.1
being his cheque drawn on his account and signature on
the said cheque. When the signature is not disputed, the
presumption under section 139 N.I.Act is to be drawn in
favour of the complainant. The accused has failed to elicit
anything in the cross examination of P.W.1 to disbelieve
15 CC.NO.22469/2021
the case of the complainant. The defence have failed to
rebut the presumption under section 139 N.I.Act.
24. He further argued that the accused has failed to
produce any believable evidence that he had issued the
blank cheque in favour of the complainant at the time of
loan transaction as a legal security and also why he has
not returned back the same is not clear. He further argued
that the accused has failed to produce any documentary
evidence regarding he has already paid entire amount to
the complainant. Further argued that to prove under
section 139 of N.I.Act, there is a presumption that the
cheque have been issued for discharge of legally
enforceable debt/liability. In the present case, the accused
has not disputed Ex.P.1 being his cheque drawn on his
account. The said presumption is available to the
complainant. It is further argued that the accused had
failed to prove the very fact that the blank cheque was
given to the complainant as a loan transaction as a legal
security. Moreover, under section 118 of N.I.Act, there is a
presumption that the Negotiable Instruments is drawn on
the date, for the amount and in favour of the person as
shown in it. It is for the accused to rebut the said
presumption. But, in the case on hand no such evidence
forthcoming. It was also argued by him that as per the
defence by the accused that he had given a blank signed
cheque as a legal security of loan transaction. As such,
very defence of the accused is not believable. Upon
16 CC.NO.22469/2021
careful perusal of the entire evidence of records both the
oral as well as documentary evidence the complainant
have proved their case. The learned counsel for the
complainant has filed detail written arguments. In his
written argument he has relied upon the citations reported
in 2016 SCC Online SC 954 (Satyanarayana Roa Vs.
Indian Renewable Energy Development Agency Limited),
Crl.A.No.1446 OF 2021 between Sunil Todi & Ors V/s
State of Gujarat and Anr. Hence, he prays to convict the
accused.
25. The accused has taken the defence that there
was no legally enforceable debt/liability from the accused
for which the cheque-Ex.P.1 was issued. Further he had
issued the blank signed cheque to the complainant at the
time of loan transaction as a legal security. 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 cheque came to be issued. It is further defence that
the blank cheque was collected from the accused, as was
misused by the complainant. The complainant created all
the documents and filed this false case against the
accused. Further he has paid entire amount to the
complainant, when there is no due from the accused, then
question of issuance of the cheque does not arise at all. It
is further contended that the complainant in order to prove
their case not produced any documents before this court.
17 CC.NO.22469/2021
Therefore, from the evidence placed on record, the very
due amount of Rs.8,64,555/- 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.
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 has not
seriously disputed he had issued the cheque-Ex.P.1 in
favour of the complainant. It is not disputed that the
complainant is a limited finance company and the accused
was a borrower. Whereas, the accused has contended
that he had given the signed chaque to the complainant at
the time of loan transaction as a legal security. When he
had given the cheque, which was blank. The accused has
specifically denied having debt/liability issued the cheque-
Ex.P.1 on 17.09.2020 in favour of the complainant. He
contends that the blank cheque given by him to the
complainant as was misused and a false complaint was
filed. But during the cross examination of DW.1 he has
specifically admits that he is due to the complainant. It
clearly shows that he is due to the complainant and in
order to repayment of the due he had issued the cheque
in question in favour of the complainant.
27. In order to attract the offence of the section 138
of N.I.Act, the main ingredients of the existence of the
18 CC.NO.22469/2021
legally enforceable debt/liability, for which the cheque
drawn on the account of the accused was given for
discharge of the same, are to be proved. The complainant
in order to prove its case, have examined its Senior
Manager as PW.1 and 10 documents were marked at
Ex.P.1 to 10. In chief examination, P.W.1 has repeated
the averments made by the complainant in the complaint.
In the present case, the accused has not disputed Ex.P.1
being his cheque drawn on the account of the accused.
The said presumption is available to the complainant.
28. As per the section 139 of N.I.Act, there is a
presumption regarding the existence of legally enforceable
debt/liability. Such presumption is a rebuttable
presumption and it is opinion to the accused to raise
defence discharging the existence of a legally enforceable
debt/liability. In the case on hand also the accused has
disputed the existence of legally enforceable debt/liability,
for which cheque-Ex.P.1 was issued. In order to prove his
defence, the accused has failed to produce documentary
evidence before this court. PW.1 during his cross-
examination has specifically denied the suggestions made
to him that the blank cheque was issued in favour of the
complainant as a legal security. Further denied the
suggestions there is no dues from the accused.
29. Since, the presumption under section 139 of
N.I.Act is a rebuttable presumption the accused is firstly
19 CC.NO.22469/2021
required to produce some probable evidence to rebut the
same. Though in the criminal cases, the standard of the
proof required for the accused is not so strict as required
for the complainant to prove the case. Further the accused
has to produced some probable evidence, which creates
doubt about the existence of legally enforceable
debt/liability. In the present case, as per the defence taken
by the accused is that he had given a blank cheque to the
complainant as a legal security. Further he has already
paid entire amount to the complainant. Except, the said
defence, he has not produced any materials to prove such
defence. Except Ex.D.1 to 5. If he had given a blank
signed cheque to the complainant as a legal security, what
prevented the accused to file the complaint immediately
after the alleged illegal act made by the complainant.
Further what prevented the accused to file the complaint
against the complainant for misusing of the alleged
cheque. On which date the accused came to knew about
the alleged illegal act of the complainant, he did not
whisper about on what date he came to know the alleged
cheque illegally misused by the complainant. Admittedly
the accused is having knowledge of the financial
transaction, why he has given the blank cheque to the
complainant without anticipating the consequence is not
explained by him. So also, he has not stated anything as
to what steps he took to receive back the blank cheque.
Moreover, immediately after the alleged blank cheque
20 CC.NO.22469/2021
misused by the complainant the accused has not lodged
any complaint before concerned police station or any
other court. No steps have been taken to receive back the
blank cheque, after he came to know about the same.
30. Once issuance of cheque and signature are
admitted, the statutory presumptions would arise under
sections 118 and 139 of the N.I.Act that the cheque was
issued by the drawer for legally payable debt/liability and
for valid consideration. The Hon’ble 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. Of course, the
presumption under section 139 and 118 of the N.I.Act are
rebuttal presumption. Further it is also held that mere
plausible explanation by the drawer is not sufficient and
proof of that explanation is necessary. The principle of law
laid down in the above decision is applicable to the facts
of this case. In the instant case, since the complainant is
in possession of the cheque-Ex.P.1 the court has to draw
the initial presumption that he is the payee of that cheque.
Once the initial burden is discharged by the complainant,
the onus shifts on the accused to rebut the complainant’s
case.
31. Further the accused has taken the defence that
the cheque was given as a legal security and the
21 CC.NO.22469/2021
complainant have misused the same. Further he has
already paid entire amount. Hence, an offence under
section 138 of N.I.Act is not attracted. In this regard once
issuance of the cheque and signature are admitted, the
statutory presumptions would arise under sections 138 of
N.I.Act that cheque was issued by the drawer for legally
payable debt or liability and for valid consideration. The
Hon’ble Supreme Court has held in Sripati Singh (Since
deceased) through his son Gaurav Singh V/s State of
Jarkhand and another, reported in 2021 SCC Online SC
1002, 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 cannot be acceptable that the cheque was given
only for security purpose, but without producing any
documents, then he has to pay the cheque 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
22 CC.NO.22469/2021
the court to presume that the holder of the cheque
received it for the discharge of any debt or liability. It is
further held that the position of law makes it crystal clear
that when a cheque is drawn out and is relied upon by
drawee, it will raise a presumption that it is drawn towards
a consideration which is a legally recoverable amount;
such presumption of course, is rebuttable by proving to
the contrary. The onus is on the accused to raise a
probable defence and the standard of proof for rebutting
the presumption is on preponderance of probabilities.
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. Applying the above said principles to the present
case and before considering the point whether the
accused succeeded to rebut the presumptions and to
establish his defence to the extent of probabilities, it is just
and necessary to accumulate undisputed facts in this
case.
23 CC.NO.22469/2021
35. It is not in dispute that bounced cheque belongs
to the bank account of the accused. It is also not in
dispute that signature appearing on the bounced cheque
is the signature of the accused. It is also not in dispute
that the cheque presented by the complainant came to be
dishonored by the banker of the accused for the reason
stated in the dishonor memo. To consider whether the
accused succeeded to rebut the presumption and
established the defence to the extent of probabilities, the
accused has not produced any documents in this regard.
It was also contended by the accused that he had given
blank cheque to the complainant as a legal security and
the complainant was misused the same. In this regard the
accused has failed to produce any believable evidence
before this court. Hence, the defence of the accused
cannot be accepted that the blank cheque was issued to
the complainant as a legal security.
36. In the defence there is no ill-will between the
complainant and the accused. Hence, question of misuse
of the cheque and filing the false case is not possible. The
accused admittedly having knowledge of business. It is
implies, he is conversant with financial transaction. If the
complainant misused the said cheque and had not
returned the same, inspite of collecting cheque leaves
from him, as a prudent man, the accused should have
inquired with the complainant and demanded to return that
cheque. No ordinary prudent man would keep quite in
24 CC.NO.22469/2021
such circumstances, without taking any steps. The
conduct of the accused is very unusual, because he did
not take any legal action against the complainant, even
after filing of the complaint based on Ex.P.1. Further he
could have issued a notice to his banker to stop payment
or legal notice to the complainant or he could have given
complaint to the police station or court immediately. No
such steps were taken by the accused. He simply makes
a bald allegation of misuse of blank cheque against the
complainant. It appears, just to escape from his legal
liability, he has taken such contentions without any valid
basis.
37. Moreover, the complainant have got issued a
legal notice to the accused through their counsel by
registered post calling upon the accused to make
repayment of the cheque to the complainant. Before a
person is held to be guilty of an offence punishable under
section 138 of N.I.Act, the complainant have to proved the
compliance of the requirement under section 138 of
N.I.Act. It is not in dispute that Ex.P.1 being his cheque
drawn on account of the accused. In view of the above
discussions, it is also held to be proved that it was drawn
for discharge of legally enforceable debt/liability. From the
evidence of P.W.1 and also cheque return memo-Ex.P.2 it
is established that the cheque was dishonored as “Payee
endorsement required”. A legal notice being issued as per
Ex.P.3 within one month from the date of dishonor of the
25 CC.NO.22469/2021
cheque is also not in dispute. In the case on hand the
accused has not seriously disputed regarding notice send
by the complainant on his address. But the accused has
not given reply to the said notice. Thereby, he could have
asserted his defence at an earliest available opportunity.
In the case on hand the notice is sent to the accused at
his address. When the accused has not seriously disputed
the address, the notice sent to the correct address is
sufficient compliance under section 138 of N.I.Act.
Therefore, there is sufficient proof of due service of the
legal notice.
38. It is not the contention of the accused that
thereafter he has repaid the cheque amount within
stipulated time of 15 days on receiving the notice.
Therefore, in the case on hand on perusal of the evidence
placed on record, all the essential ingredients under
section 138 N.I.Act, have been complied with. As the
accused has not paid the cheque amount within stipulated
period, as such the accused have committed an offence
punishable under section 138 of Negotiable Instruments
Act. The present complaint is filed before this court within
one month after the accused failed to repay the cheque
amount. Even the accused did not whisper anything about
the defence while his plea was recorded under section
251 of Cr.P.C. In the judgment of the Hon’ble Supreme
Court in the case of Indian Bank Association V/s Union of
India and others, reported in 2010(5) SCC 590, it is clear
26 CC.NO.22469/2021
that while recording the plea under section 251 of Cr.P.C.,
it becomes the duty of the accused to state whether he
has any defence to make or he pleads guilty. Thus, unlike
under section 240 of Cr.P.C, the accused has no option
under section 251 of Cr.P.C, just to deny the allegations
made against him. If he is not willing to plead guilty, he
must explain what are the defences he wants to take. As
such it has to be considered, whatever defence raised by
the accused during the trial are all after thought, just to get
ride of statutory burden cast on him.
39. 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/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 has not been able to
make out a probable case on his behalf.
40. The accused has taken the defence that except
signature other writings on the cheque-Ex.P.1 is not in his
27 CC.NO.22469/2021
handwriting, which was filled up by the complainant and it
amounts to material alterations, so, the complaint is liable
to be dismissed. When the accused admits his signature,
he cannot take up a defence that other contents of cheque
was 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 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.”
28 CC.NO.22469/2021
41. The principles emerging from the above referred
decision make it clear that, it is not mandatory and no law
prescribes that the contents of the 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.
42. As per the version of the accused he has
nowhere denied transaction. The accused himself has
admitted that he is the holder of alleged cheque. It is
sufficient hold that the accused had issued the cheque
and even after he has not repaid the cheque amount the
getting of receipt of notice. However, in any manner as the
complainant have complied all the terms of ingredients of
the provisions of section 138 of N.I.Act. The accused is
liable for dishonor of cheque. In case of dishonor of the
cheque, once the execution of the cheque is admitted by
the accused, then it for him to first rebut presumption
arising out of section 139 of N.I.Act. Accordingly, P.W.1
has established the case of the complainant that the
accused had issued the cheque-Ex.P.1 in order to repay
the legally recoverable amount. Therefore, the accused
29 CC.NO.22469/2021
has failed to probables the defence taken by him that
Ex.P.1 was the blank cheque given to the complainant as
a legal security. Therefore, the accused has failed to rebut
the presumption under section 139 of N.I.Act. In the said
circumstances, the complainant is not at all required to
produce any material as to the financial transaction
between the complainant and the accused, since the initial
presumption is still available, when there is no rebuttal
evidence.
43. PW.1 in his evidence has specifically deposed
that the accused had approached the complainant for
financial assistance of Rs.8,77,000/- for purchase of
LPO1612 vehicle bearing registration No.MH04FK0487.
After verification of all the documents, the complainant
sanctioned the loan and thereby entered into a loan
contract, the accused is agreeing to repay the said loan,
as per the terms and conditions of the loan contract.
Further deposed that thereafter the accused being a
constant defaulter had not paid the EMIs in time and as
such the complainant’s officers had visited the accused
several times requesting the accused to make the
payment and thereafter he had issued the cheque in
question in favour of the complainant for repayment of the
loan. So also it is not in disputed that the complainant and
the accused are known to each other, some point of
period. When the cheque was presented to the bank for
encashment same was dishonored for the reasons payees
30 CC.NO.22469/2021
endorsement required, this is also not seriously disputed
by the accused. The accused has 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 has
failed to probables his defence. With these reasons, I
answer point No.1 and 2 in the Affirmative.
44. POINT NO.3 AND 4: 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, I have taken these two points together
for common discussion. Before a person is held to have
committed an offence punishable under section 138 of
N.I.Act, the complainant have to prove all the
requirements of section 138 of N.I.Act. Ex.P.1 being his
cheque drawn on the account of the accused is not in
dispute. The said cheque having been dishonored, when it
was presented by the complainant before the bank for
encashment is also not seriously disputed by the accused.
The accused has not taken up any contention that
thereafter he has repaid the cheque amount within
stipulated time of 15 days, after issuance of the notice. As
such, in the present case from perusal of documents, the
essential requirements of section 138 of N.I.Act, have
been complied with. In this case, if the accused had
issued the blank cheque in favour of the complainant for
the purpose of legal security why he has not produced any
31 CC.NO.22469/2021
documents. After service of notice he neither reply to the
notice nor paid the cheque amount. Hence, the present
complaint came to be filed before this court on 27.11.2020
within the period of one month from the date of cause of
action. While discussing the point No.1 and 2, this court
has already observed that the complainant have proved
that the cheque was issued for discharge of legally
enforceable liability/debt and in view of the mandatory
requirements under section 138 of N.I.Act, being complied
with. The accused is found to have committed an offence
punishable under section 138 of N.I.Act. With these
reasons, I answer point No.3 and 4 in the Affirmative.
45.POINT NO.5: The accused is held to have
committed an offence punishable under section 138 of
N.I.Act. The complainant have proved its case. The
accused has failed to prove his rebuttal for the reasons
mentioned above and in view of the mandatory
requirements of section 138 of N.I.Act, being complied
with. The accused is found to have committed an offence
punishable under section 138 of N.I.Act. Since, the said
offence is an economic crime, the accused is not entitled
for the beneficial provisions of probation of offenders Act.
In view of the above discussions and the findings on point
No.1 to 4, I proceed to pass the following:
:ORDER:
Acting under section 255(2) of Cr.P.C.,
the accused is convicted for the offence
32 CC.NO.22469/2021
punishable under section 138 of N.I.Act.
The bail bond executed by the accused
is hereby stands canceled.
The accused is sentence to pay fine of
Rs.8,65,000/- (Rupees eight lakhs sixty five
thousand only) to the complainant.
It is further ordered that out of the said
fine amount an amount of Rs.8,55,000/-
(Rupees eight lakhs fifty five thousand only)
shall be paid to the complainant as
compensation as per Section 357(1)(b) of
Cr.P.C., and remaining amount of Rs.10,000/-
(Rupees ten thousand only) shall be remitted
to the State.
In default of the payment of fine amount,
the accused shall undergo simple
imprisonment of six months.
(Dictated to the stenographer directly on computer
typed by her, corrected by me and then judgment
pronounced in the open court on 01 st day of March
2025)(Soubhagya.B.Bhusher)
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.
ANNEXURE
List of witnesses examined on behalf of the complainant:
PW.1 : Mr.Satheesh.N.
List of documents marked on behalf of Complainant:
33 CC.NO.22469/2021
Ex.P.1 : Cheque. Ex.P.1(a) : Signature of the accused. Ex.P.2 : Bank endorsement. Ex.P.3 : Office copy of the legal notice. Ex.P.4 : Postal receipt. Ex.P.5 : Returned postal cover. Ex.P.5(a) : Returned legal notice. Ex.P.6 : Complaint. Ex.P.7 : Loan application. Ex.P.8 : Hypothication agreement. Ex.P.9 : Loan account statement.
Ex.P.9(a) : Certificate U/s.65(b) of I.E.Act.
Ex.P.10 : Certified copy of Minutes of Extract.
List of witnesses examined on behalf of accused:
DW.1 : Mr.Subhash Dupargude.
List of documents marked on behalf of accused:
Ex.D.1 : Statement of account.
Ex.D.2 : B-extract.
Ex.D.3 : Hypothecation letter.
Ex.D.4 : Print out copy of RC book.
Ex.D.5 : Certificate U/s.65(b) of I.E.Act.
(Soubhagya.B.Bhusher)
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.
34 CC.NO.22469/2021
01.03.2025 (Judgment pronounced in the open court
vide separate order sheet)
ORDER
Acting under section 255(2) of
Cr.P.C., the accused is convicted for the
offence punishable under section 138 of
N.I.Act.
The bail bond executed by the
accused is hereby stands canceled.
The accused is sentence to pay fine
of Rs.8,65,000/- (Rupees eight lakhs sixty
five thousand only) to the complainant.
It is further ordered that out of the
said fine amount an amount of
Rs.8,55,000/- (Rupees eight lakhs fifty
five thousand only) shall be paid to the
complainant as compensation as per
Section 357(1)(b) of Cr.P.C., and
remaining amount of Rs.10,000/- (Rupees
ten thousand only) shall be remitted to the
State.
In default of the payment of fine
amount, the accused shall undergo
simple imprisonment of six months.
XXVIII A.C.J.M, Bengaluru City.
[ad_1]
Source link