[ad_1]
Bangalore District Court
Classic Finance vs Santhosh.R on 21 April, 2025
KABC020231082023 Digitally signed by
APPASAB APPASAB RAMAPPA
RAMAPPA NAIK
Date: 2025.04.23
NAIK 13:14:49 +0530
IN THE COURT OF XXIV ADDITIONAL SCJ & ACJM,
(SCCH-26) AT: BENGALURU
DATED THIS THE 21st DAY OF APRIL 2025
PRESENT: Sri. APPASAB NAIK
B.A.L.L.B (Spl)
XXIV ADDL. SCJ & ACJM
BENGALURU.
1. Case Number CC.No.6405/2023
2. The date of 28.07.2022
commencement of
evidence
3. The date of closing 28.11.2024
evidence
4. Name of the M/s. Classic Finance (Reg)
Complainant No.894/1, 1st Floor,
Shreedhara Sankeera,
1st Main Road, Chandra Layout,
(Next to Skyline Apartment),
Represented by its Partner
Sri. Agnyea Shetty,
S/o Dinakara Shetty,
Aged about 28 years,
(By Sri.Naveen Chandra Shetty -
Advocate)
5. Name of the Accused Sri. Santhosh R,
No.42, Ground Floor,
SCCH - 26 2 CC No.6405/2023
5th Cross, Rajeev Gandhi Nagar,
Peenya Small Industries,
Shivaganesh Temple,
Bangalore - 560058.
Also working at:
BMTC Driver
No.17276,
Summanahalli Depot,
Bangalore- 560068.
Also residing at,
Chawenehalli Village,
Near Anjaneyaswamy Temple,
Navale (P), Bagur Hobli,
Channarayapatana, Hassan.
(By Sri.Chethan Kumar B.A. -
Advocate)
6. The offence U/s.138 of the Negotiable
complained of Instruments Act
7. Opinion of the judge Accused found guilty
JUDGMENT
The complainant has filed this complaint Under
Section 200 of Cr.P.C against accused alleging that the
accused has committed the offence punishable Under
Sec.138 of the Negotiable Instruments Act, 1881. (In short
for N.I.Act).
SCCH – 26 3 CC No.6405/2023
2. The brief facts of the complainant’s case are as
under:
It is the case of the complainant that, the complainant
is registered finance corporation and having valid money
lending license from competent authority. Accused and his
friends Sanjeeth C.R. and Chethan Kumar C.L. have
approached the complainant for financial help and have
borrowed a loan of Rs.2,00,000/- from complainant. The
complainant has paid the amount of Rs.2,00,000/- on
17.08.2022 through RTGS to accused friend Sanjeeth C.R.
Bank account and they have executed on demand pronote
and consideration receipt, undertaking letter, loan
application form No.6 etc., on 12.08.2022. accused and his
friend Chetan Kumar and guarantor for prompt repayment
of the said loan and have to clear the said loan within 8
EMI but they have failed to clear installment amount.
Towards the repayment of loan amount for full and final
settlement accused had issued a cheque bearing
No.106662, dated 12.01.2023, for a sum of Rs.1,75,639/-
SCCH - 26 4 CC No.6405/2023 drawn on Sri Sudha Co-Operative bank Ltd.,
Sheshadripuram Branch, Bangalore. On presentation of the
said cheques for encashment through his banker Bank of
Baroda, Chandra Layout Branch, Bengaluru, it was
dishonored for the reason “Funds Insufficient” on
13.01.2023. Aggrieved by the said acts of the accused, he
got issued a legal notice dated 04.02.2023 to the accused
demanding him to come forwards and clear the said legal
liability. The legal notice issued to accused was refused by
the accused 11.02.2023. In spite of it, the accused has not
given any reply to the notice or not paid the balance
amount. Hence, filed this complaint.
3. After filing of this complaint, case has been
registered as P.C.R. and sworn statement of the
complainant has been recorded. Thereafter, the cognizance
of offence punishable u/s 138 of NI Act has been taken and
criminal case has been registered in Crl.Reg.No.III and
issued summons to the accused. In response to summons,
the accused has appeared before this court through his
SCCH – 26 5 CC No.6405/2023
counsel and obtained bail. The plea has been recorded and
read over to the accused. He has pleaded not guilty and
claims to be tried. Hence, the trial has been conducted.
Thereafter statement of accused U/sec.313 of Cr.P.C is
recorded and he denied the incriminating evidence against
him.
4. In view of judgment passed by the Hon’ble Apex
Court in the case of Indian Bank Association and others
V/s. Union of India and others, the sworn statement on
affidavit is treated as evidence of complainant and it is
considered as PW-1 evidence and documents are marked as
Ex.P.1 to Ex.P.15. Thereafter, the statement of the accused
u/s 313 Cr.P.C. has been recorded and he has denied the
incriminating circumstances appearing in the complainant
evidence and he has chosen to lead defence evidence as
DW1 and not got marked any document and closed his side.
5. Heard the arguments from both side. Perused the
materials on records.
The learned counsel for complainant has relied on the
SCCH – 26 6 CC No.6405/2023
following citations:
1) (2002) 6 SCC 426
2) Crl.App 3369/2024
3) (2016) 3 SCC 1
4) (2020) 12 SCC 724
5) Crl.App No. 1020/2010
6) Crl. Revision petition No.932/2021
7) Crl. Revision petition No.176/2011
8) Crl. App No. 803/2018
9) ILR 2019 KAR 493
10)(2019) 10 SCC 287
11) Crl Appeal No. 271/2020
The learned counsel for accused has filed the following
citation:
1. Crl.M.C. No. 3385/2010 between Poonam
V/s. Kotak mahindra Bank Ltd., & Anr
6. The following points would arise for my
consideration:-
POINTS
1. Whether the complainant proves
beyond all reasonable doubt that the
accused had issued cheque bearing
No.106662, dated 12.01.2023, for a
sum of Rs.1,75,639/- drawn on Sri
Sudha Co-Operative bank Ltd.,
Sheshadripuram Branch, Bangalore.
towards partial discharge of the
SCCH – 26 7 CC No.6405/2023
dues and when the said cheque was
presented to the bank for
encashment, it was returned unpaid
with remarks that “Funds
Insufficient” and inspite of service of
demand notice and accused has not
paid the amount and thereby
committed offences punishable
under section 138 of NI Act?
2. What order?
7. 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 :-
REASONS
8. POINT NO.1:- Before keeping the disputed facts it is
appropriate to refer the undisputed facts, which can be
gathered from the material placed before this court. Ongoing
through the rival contention of the parties, oral and
documentary evidence, it is clear that, accused and his
friends Sanjeeth C.R. and Chethan Kumar C.L. have
approached the complainant for financial help and
SCCH – 26 8 CC No.6405/2023
Sanjeet .C.R has borrowed a loan of Rs.2,00,000/- from
complainant. The complainant has paid the amount of
Rs.2,00,000/- on 17.08.2022 through RTGS to accused
friend Sanjeeth C.R. Bank account and they have executed
on demand pronote and consideration receipt, undertaking
letter, loan application form No.6 etc., on 12.08.2022.
accused and his friend Chetan Kumar and guarantor for
prompt repayment of the said loan and have to clear the
said loan within 8 EMI but they have failed to clear
installment amount. Towards the repayment of loan
amount for full and final settlement, accused had issued a
cheque bearing No.106662, dated 12.01.2023, for a sum of
Rs.1,75,639/- drawn on Sri Sudha Co-Operative bank Ltd.,
Sheshadripuram Branch, Bangalore. On presentation of the
said cheques for encashment through his banker Bank of
Baroda, Chandra Layout Branch, Bengaluru, it was
dishonored for the reason “Funds Insufficient” on
13.01.2023. Aggrieved by the said acts of the accused, he
got issued a legal notice dated 04.02.2023 to the accused
SCCH – 26 9 CC No.6405/2023
demanding him to come forwards and clear the said legal
liability. The legal notice issued to accused was refused by
the accused 11.02.2023. In spite of it, the accused has not
given any reply to the notice or not paid the balance
amount.
9. As already stated supra the authorized person of
the complainant firm has examined himself as PW.1 and got
marked 15 documents as Ex.P.1 to P.15. PW.1 has filed
affidavit in lieu of examination-in-chief reiterating the entire
averments of his complaint. Ex.P.13 is the certified copy of
deed of partnership, and Ex.P.15 is the certified copies of
money lending license. As per these documents it appears
that the complainant firm is duly registered partnership
firm engaged in the business of money lending. Ex.P.7 and
8 are the loan application along with undertaking letter,
Ex.P.9 is the on demand promissory note, Ex.P.10 is the
consideration receipt, Ex.P.11 is Form No.6. As per these
documents, it appears that the accused along with his
friend Sanjeet. C.R has borrowed sum of Rs.2,00,000/-
SCCH – 26 10 CC No.6405/2023
from the complainant firm on 12-08-2022 and agreed to
repay the same in 8 monthly installments with interest.
Further it appears that the accused and his friend
Sanjeet.C.R and Chethankumar.C.L have executed on
demand promissory note, consideration receipt, and letter of
undertaking and Form No.6 in favour of the complainant
firm. Ex.P.12 is the statement of account. As per this
document it appears that the Sanjeet.C.R. is due by sum of
Rs.1,75,639/- as on 31-12-2022.
10. Ex.P.1 is the cheque dt.12-01-2023 and Ex.P.2 is
the bank endorsement dt.13-01-2023. As per these
documents, it appears that the complainant has presented
the cheque for collection at his banker and the same has
been returned to him with endorsement “Funds
insufficient”. Ex.P.3 legal notice dt.04-02-2023, Ex.P.4 is
postal fee paid receipts and Ex.P.5 and is the postal
acknowledgment and returned notice covers. As per these
documents, it appears that the complainant has issued legal
notice to the accused demanding him to pay the cheque
SCCH – 26 11 CC No.6405/2023
amount within 15 days from the date of receipt of notice.
The notice duly served to the accused on 11-02-2023, but
the endorsement on Ex.P-6 that refused and return to
sender. The authorized person of the complainant firm has
filed the present complaint on 24-03-2023. Therefore, the
present complaint has been filed within time limit.
11. The documents produced by PW.1 clearly show
that he has complied with the mandatory provisions of
Section 138 of NI Act. Therefore, it gives raise to
presumption in favour of complainant u/s 118 and 139 of
NI Act. However, the presumptions available in favour of
complainant are rebuttable in nature.
12. A careful scrutiny of the documents relied
by the complainant goes to show that, the statutory
requirements of section 138 of N.I. Act is complied with and
this complaint is filed within time. The complainant has
discharged his initial burden by examining its officials as
PW1 and by production of documents. Thus, complainant is
entitled to rely on the statutory presumptions enshrined
SCCH – 26 12 CC No.6405/2023
under section 118 read with section 139 of N.I. Act.
13.The Section 118 reads as here: –
“That every negotiable instrument
was made or drawn for consideration
and that every such instrument when
it has been accepted, endorsed,
negotiated or transferred was
accepted, endorsed, negotiated or
transferred for consideration”.
14. Further Section 139 of the Negotiable
Instruments Act provides for presumption in favour of a
holder. It reads as here: –
“It shall be presumed, unless the
contrary is proved, that the holder of
a cheque received the cheque, of the
nature referred to in section 138, for
the discharge, in whole or in part, or
any debt or other liability.”
A combined reading of above said sections raises a
presumption in favour of the holder of the cheque that he
has received the same for discharge in whole or in part of
any debt or other liability.
15. No doubt, the said presumptions of law are
rebuttable in nature. The accused can take probable
SCCH – 26 13 CC No.6405/2023
defence in the scale of preponderance of probability to rebut
the presumption available in favour of complainant. Let me
examine whether the accused has successfully rebutted the
said presumptions of law. In this back drop, this court has
given anxious consideration to the materials available on
record.
16. The learned counsel for the complainant argued
that the accused is a guarantor of the Sanjeeth.C.R, he was
obtained the loan from the complaint of Rs.2,00,000/- on
17-08-2022. The accused and his friend and principal
borrower were executed the documents infavour of
complaint. After receiving the loan amount, the original
borrower Sanjeet.C.R has been irregular in making payment
of the installments and became defaulter, after the accused
has issued cheque, but the said cheque was dishonored and
legal notice issued, even then he has not paid any amount.
Further argued that the legal notice issued to the accused
and thereafter filed this complaint. The complaint has
produced the loan documents and details of the said loan
SCCH – 26 14 CC No.6405/2023
transactions as EX.P-7 to P-11. The accused has himself is
admitted in his cross examination cheque, signature is
admitted and also DW-1/accused is admitted in his cross
examination that loan amount transfer in the name of
Sanjeet C.R on 17-08-2022. The accused has issued the
cheque for repayment of due amounts and complainant has
proved the case on oral and documentary evidence. Hence
he prayed for convict the accused.
17. The learned counsel for accused argued that, the
complaint has filed by the complainant is not maintainable.
There is no transaction between the complainant and
accused. The accused is the guarantor as per the compliant.
The complainant has misused the security cehque of the
accused. The legal notice not duly served to the accused.
The complainant has not taken any steps against accused
for recovery of loan. The complainant has not followed the
procedure under NI Act. Hence he prayed for acquit the
accused.
18. I have perused entire material placed on record.
SCCH – 26 15 CC No.6405/2023
Ex.P-7 is the loan application, Ex.P-9 is the demand
promissory note. Ex.P-10 is the consideration receipt, Ex.P-
11 is the Form No.6, Ex.P-12 is the Ledger account
statement, which discloses that as on 31-12-2022 due sum
of Rs.1,75,639/- .
19. According to the accused, he has guarantor the
accused on loan and security cheque is misused by the
complainant and created the documents. But accused has
not proved his defense. Therefore looking into entire
documentary evidence as well as oral evidence, these
aspects are all proved by way of oral and documentary
evidence. The learned counsel for complainant argued that
once the issuance of cheque and documents were admitted
by the accused, it drawn presumption U/s 139 of NI Act.
20. On careful examination of all the documents of
complainant, it is very clear that the complainant filed this
complaint well within time and complied all the ingredients
of NI Act 1881. The presumption under section 139 of the
Act is a presumption of law, it is not a presumption of fact.
SCCH – 26 16 CC No.6405/2023
This presumption has to be raised by the court in all the
cases once the factum of dishonor is established. The onus
of proof to rebut this presumption lies on the accused. The
standard of such rebuttable evidence depends on the facts
and circumstances of each case. Such evidence must be
sufficient to prove the case. Therefore a mere explanation is
not sufficient to rebut this presumption of law.
21. As per NI Act, the presumption is in favour of holder
of cheque. Here, the holder of cheque is complainant and
presumption is in favour of complainant. It is burden on the
accused to rebut the above presumption. As per section 118
of N.I Act, presumption has to be raised by the court in all
the cases once the factum of dishonour is established, but it
is rebuttal presumption. The onus of proof to rebut this
presumption lies on the accused. The standard of such
rebuttal evidence depends on the facts and circumstances of
each case. Such evidence must be sufficient, cogent and
should prove beyond any reasonable doubt. Therefore, a
mere explanation is not enough to repel this presumption of
SCCH – 26 17 CC No.6405/2023
law. Therefore, it is to appreciate whether accused rebut the
evidence or not?
22. This court carefully gone through the entire case
papers. Accused admitted issuance of cheque. It means,
issuance of cheque is not in dispute. Hence, this court
relied the decision which is reported in
2017 (2) AKR 12
(K.L.Agarwal Vs M/s Paramount Solutions,
Bangalore),
It is held that
“Accused admitted issuing three
cheques and also signature on
cheques-no evidence on record to
rebut the presumption raised
against accused”.
2015 AIR-SCW 3040
(T.Vasanthakumar Vs Vijayakumari),
The Hon’ble Supreme Court held
that,
“cheque as well as signature on in not
disputed by accused presumption u/s
139 would be attracted. Story brought
out by the accused that, cheque was
SCCH – 26 18 CC No.6405/2023
given to complainant long back as
security to a loan, the loan was repaid,
but complainant did not return security
cheque-is unworthy of credit, apart from
being unsupported by any evidence-
Order of high court in acquitting
accused is erroneous”.
The said decision clearly applicable to the case on hand.
Here, also accused admitted cheque as well as signature. He
contended that, it was issued for the purpose of security.
Accused failed to prove the same.
23. Accused clearly admitted that Ex.P.1(a) is his
signature. Regarding defence raised by the accused that he
was issued the duly signed blank cheque for security and no
borrower, only guarantor in the loan, At this point, Learned
counsel for complainant has relied the citations in
2002(6) SCC 426
ICDS Ltd V/s Beena Shabber and another
Negotiable Instruments Act– 1881-
S.138- Dishonour of cheque- SCCH - 26 19 CC No.6405/2023 Compliant against guarantor- Maintainability -Guarantor issuing
cheques towards payment of the dues
outstanding against the principal
debtor( hire -purchase of the car in
this case)-Cheques bouncing- in such
circumstances, compliant under
sec.139 against the guarantor, held
maintainable-Arguments based on
Ss.136 and 128, contract Act held,
not relevant in this regard-words and
phrases-“Any cheque”,other liability-
Scope-Contract Act-1872, ss 126 and
128-Interpretation of status-basic
rules of interpretation-legislature
intent-Taken into consideration.
2016(3) SCC 1
Don Ayengia V/s state of Assam
and another
It is held that
A. Debt, Financial and monetary
Laws- Negotiable Instruments Act–
1881-Ss 138,139 and 118(a)-
Dishonour of cheque issued as
security for discharge of a debt or
SCCH - 26 20 CC No.6405/2023
other liability-Conviction of
guarantor/surety who ha disused
cheques as security for payment of
amount due by principal debtor, as
principal debtor had defaulted,
confirmed.
2020(12) SCC 724
APS Forex Services Private Ltd V/s
Shakti International Fashion
Linkers and others
It is held that
A-Debt, Financial and monetary
laws-Negotiable Instruments
Act,1881-Ss 13,118 and 138-
Dishonour of cheque-Presumption in
favour of holder of cheque under
S.139-Is rebuttable of any such
evidence, version put forward by
accused cannot be accepted-All
ingredients of Ss.138 being satisfied
in present case, conviction
confirmed.
The said decisions clearly applicable to the case on
hand. Here, the complaint U/sec.138 of NI Act is
maintainable against accused.
SCCH – 26 21 CC No.6405/2023
The said decisions clearly applicable to the case on
hand. Here, the complaint U/sec.138 of NI Act is
maintainable against accused.
In this regard the learned counsel for accused
has relied the decision in Cri.M.C No.3385/2010 of the
Hon’ble High court of Delhi, it is held that,
M/s. Rama Dairy products limited was a
legal entity which was undisputedly different
than the petitioner. The petitioner has been
arrayed as an accused in her individual
capacity and not as a director of M/s Rama
Diary products Limited. The respondent seems
to have forgotten that the petitioner was not the
loanee but a guarantor and that the cheque in
question that was given by her was not in
discharge of her primary liability towards any
loan, but was given by her as a guarantor of the
loan agreement. From all this , it appears that
the complainant bank was itself not clear and
that allegations which were setup against the
petitioner are vague and inconstant. A person
named as a guarantor in the loan agreement,
SCCH – 26 22 CC No.6405/2023
cannot be prosecuted as an accused in a case
under section 138 of the Act.
But the above decisions relied by the complainant, the
said decision relied by the accused is not applicable to this
case.
24. The accused contended that issued blank cheque
for security in loan. What is the effect of issuing a blank
cheque is to be considered at this stage. Where the cheque
is signed leaving blank all other particulars and handed
over to the payee authorizing his to fill-up the blanks as
agreed upon, it is valid in law. Therefore, when such a
cheque is dishonoured, section 138 applies. ILR 2001 KAR
4127 in the case of S.R.Muralidhar Vs G.Y.Ashok. In this
regard section 20 of the Act is very clear. Here the stand of
the accused is not maintainable.
25. The accused contended that the cheque is issued
for the purpose of security. The cheque issued as a surety is
also comes under the purview of section 138 of N.I Act. This
SCCH – 26 23 CC No.6405/2023
aspect was observed in the decision which is reported in AIR
2002 SC 3014 (ICDS Ltd., Vs Beena Shabeer and another).
26. Further, above decision reported in (2016) 3 SCC
1 (Don Ayengia Vs State of Assam and another) wherein it is
held that; “Dishonor of cheque issued as a security for
discharge of debt or other liability-conviction of
guarantor/surety, who had issued cheques as security for
payment of amount due by principal debtor, as principal
debtor had defaulted and he is committed offense-Person
who secondly liable, such as security or guarantor may also
be convicted under section 138 of NI Act. If the ingredients
thereof or satisfied. Hence complainant has placed sufficient
oral and documentary evidence to prove that the accused
issued the cheque in discharge of legal liability.
Presumption Therefore, the under Sec.139 of N.I.Act remain
intact. The complainant has proved the complaint
averments by placing oral and documentary evidence. On
the other hand, the accused failed to prove the defence by
rebutting the above said presumption.
SCCH – 26 24 CC No.6405/2023
27. The complainant has proved that the cheque in
question was issued by the accused towards discharge of
legal liability. The Honble Apex Court in several decisions
starting from Rangappa V/s Mohan and 139 of N.I.Act
comes into operation in favour of the complainant that held
that presentation u/s.118 the cheque in question is issued
towards payment of any legal debt ,placing initial burden on
the accused to rebut the same and establish the
circumstances in which the cheque in question reached the
hands of the complainant. Only after rebutting the above
said presumption, burden, would shift on the complainant
to prove his case.
28. In the light of the above discussion and the material
placed on record, the court is of the opinion that the
complainant has proved existence of legal liability and also
proved that the accused issued the cheque in question
towards discharge of legal liability. The complainant has
proved the ingredients of Sec.138 of N.I.Act. Therefore
considering the entire facts and circumstances of the case
SCCH – 26 25 CC No.6405/2023
and the available evidence on record, the court comes to the
conclusion that the accused committed the offence
punishable under Sec.138 of N.I.Act. The complainant is
entitled for compensation under Sec.357 Cr.P.C. Therefore,
the complainant has proved point No.1 beyond all
reasonable doubt. Hence answered on point No.1 in the
affirmative.
29. POINT No.2 : for the above discussions in point
No.1, I pass to proceed the following
-: ORDER :-
Acting U/s 255(2) of Cr.P.C, the
accused is hereby convicted for the
offence punishable U/s 138 of NI Act
and accused is sentenced to pay fine
of Rs.1,80,639/-.
In default, the accused shall
undergo simple imprisonment for
period of six months. Acting U/s
357(3) of Cr.P.C. out of the total fine
amount payable by the accused, a
sum of Rs.1,75,639/- shall be paid to
the complainant as compensation and
SCCH – 26 26 CC No.6405/2023remaining amount shall be defrayed
as state expense.
It is further made it clear that if the
accused opt to undergo imprisonment,
it does not absolve him from liability of
paying compensation to the
complainant.
Office is hereby directed to supply
free certified copy of this judgment to
the accused forthwith.
(Dictated to the stenographer, directly over computer,
typed by her, corrected by me and then pronounced in the
open Court on this day 21st April, 2025.)(APPASAB NAIK)
XXIV ADDL. SMALL CAUSES JUDGE
& A.C.J.M. BENGALURU.
ANNEXURE
I. WITNESSES EXAMINED ON BEHALF OF THE
COMPLAINANT:
PW.1 : Sri.Agneya Shetty SCCH - 26 27 CC No.6405/2023
II. DOCUMENTS MARKED ON BEHALF OF THE
COMPLAINANT:
Ex.P.1 : Cheque
Ex.P.1(a) : Signature of accused
Ex.P.2 : Bank return memo
Ex.P.3 : Copy of Demand notice
Ex.P.4 : 6 postal receipts
Ex.P.5 : Postal acknowledgment
Ex.P.6 : 6 returned postal covers along with notice
inside open in the open court
Ex.P.7 : Loan Application
Ex.P.8 : Letter of undertaking
Ex.P.9 : Demand Promissory note
Ex.P.10 : Consideration receipt
Ex.P.11 : Form No.6
Ex.P12 : Account statement
Ex.P13 : Certified copy of partnership deed
Ex.P14 : Certified copy of Form C
Ex.P15 : Certified copy of license
III. WITNESSES EXAMINED ON BEHALF OF THE
ACCUSED:
DW.1 : Sri.Santhosh R
SCCH - 26 28 CC No.6405/2023
IV. DOCUMENTS MARKED ON BEHALF OF THE
ACCUSED:
--NIL---
(APPASAB NAIK)
XXIV ADDL. SMALL CAUSES JUDGE
& A.C.J.M. BENGALURU.
[ad_2]
Source link