Bangalore District Court
Sandeep Hemaraj vs N.Shashidhar on 26 December, 2024
KABC030292002022
IN THE COURT OF THE XIX ADDITIONAL CHIEF
JUDICIAL MAGISTRATE AT BENGALURU CITY.
Dated this the 26th day of December 2024.
PRESENT:SMT.RASHMI H.B., B.A.(LAW)LL.B.,LLM.,
XIX ADDL.C.J.M., BENGALURU CITY.
C.C.No.11275/2022
Complainant :- Sri Sandeep Hemaraj,
S/o.G.Hemaraj, aged 45 Years,
R/o.Door No 7B & &C,
'Sampoorna Chambers',
Vasavi Road, V.V.Puram,
Bengaluru- 560 004.
(Rep. By Sri.B.R.G., Advocate)
-V/s-
Accused :- Sri Shashidhar.,
S/o.Narayanappa.A.
Aged 46 years,
R/at No 848, A-17, BDA-II Stage,
Austin Town, Bengaluru- 560047.
And also M/S Siddartha Logistics &
Warehouse, Authorized
Representative
R/at No 848, A-17, BDA-II Stage,
Austin Town, Bengaluru- 560047. i
(Rep. By Sri.H.S.P., Advocate)
2 C.C.No.11275/2022
Date of complaint :- 20-12-2021
Date of Commencement :- 08-04-2022
of evidence
Offence complained :- Section 138 of N.I.Act
Opinion of the Judge :- Accused is found guilty.
JUDGMENT
This is a private complaint filed under section 200
of Cr.P.C., against the accused for the offence
punishable under section 138 of the Negotiable
Instruments Act.
02.The brief facts of the complaint is as
under:
Complainant and accused are business friends
from one year. On 11-03-2021 accused has contacted
complainant for the purpose of setting up Kitchen
facility at property bearing No.250-T in Narasapura
Industrial area in land bearing sy no 95/P and 164/P of
Kardu Bande Hosahalli Village, Kolar Taluk. The agreed
3 C.C.No.11275/2022built up area is 9300 square feet, which has to leased
by the accused to complainant. In that regard a
Memorandum of Understanding (herein after
referred as MOU) entered into between them, on the
same date was executed by accused. As per MOU
complainant has made payment of Rs.9,00,000/- from
his account to the bank account of accused as below:
Date Amount Mode
11-03-2021 Rs 2,50,000/- RTGS/NEFT
March 2021 Rs 2,50,000/- RTGS/NEFT
07-04-2021 Rs 1,00,000/- RTGS/NEFT
10-04-2021 Rs 1,00,000/- RTGS/NEFT
17-04-2021 Rs 1,00,000/- RTGS/NEFT
11-06-2021 Rs 50,000/- RTGS/NEFT
18-06-2021 Rs 50,000/- RTGS/NEFT
Total Rs 9,00,000/-
03. But accused has failed to complete the work
of setting up Kitchen facility in the aforesaid premises
as per the stipulated time mentioned in MOU. Inspite
of repeated request accused failed to complete his
work even in extended time. Therefore complainant
4 C.C.No.11275/2022and accused have agreed to enter into cancellation of
MOU on 15-07-2021.
04. In order to repay the amount, accused has
issued 4 cheques i.e. cheque bearing no.532377 dated
07-10-2021 for Rs 2,00,000/-, cheque bearing
no.532378 dated 07-10-2021 for Rs 2,00,000/-,
Cheque bearing no.532379 dated 12-11-2021 for Rs
2,00,000/- and cheque bearing no.532380 dated 12-
11-2021 for Rs.3,00,000/- all drawn on State Bank of
India, Victoria Road branch, Bengaluru, in favour of
the complainant. The complainant has presented said
cheques bearing no.532377 and 532378 for
encashment through his banker HDFC Bank Ltd,
Richmond road branch and those cheques are returned
unpaid with bank endorsement dated:22-10-2021
showing cheque is dishonoured for the reason “Funds
Insufficient”.
5 C.C.No.11275/2022
05. Again complainant has presented all cheques
through his banker HDFC Bank Ltd, Richmond branch,
Bengaluru on 16-11-2021. The cheque bearing
no.532378 is dishonoured for the reason Payment
Stopped by Drawer and all other three cheques are
dishonoured for the reason “Funds Insufficient” as
per bank endorsement dated 16-11-2021. Thereafter,
the complainant has got issued legal notice to the
accused through his counsel on 25-11-2021 through
registered post and notice returned unserved on 10-
12-2021. But, the accused has failed to make payment
of cheque amount. Hence, complainant has filed this
complaint on 20-12-2021.
06. After presentation of complaint, this Court
took cognizance of offence and recorded the sworn
statement of complainant. Thereafter, a criminal
case is registered against accused and summons is
issued to the accused. The accused appeared
6 C.C.No.11275/2022
through his counsel and he is enlarged on bail. The
copies of the complaint and other papers furnished
to the accused. Substance of accusation was read
over to him. Accused has pleaded not guilty and
claimed to be tried.
07. In order to prove the accusation made
against the accused, the complainant examined
himself as PW1 and got marked 24 documents as Ex
P1 to Ex.P24. Thereafter, statement of accused is
recorded under section 313 of Cr.P.C. wherein the
accused has denied the incriminating evidence
found on record as false and he submitted he would
lead defence evidence. He has examined himself as
DW1.
08. Heard the arguments of learned counsel
for complainant and accused. Perused entire case
record carefully. The learned counsel for
7 C.C.No.11275/2022
complainant filed memo with judgements reported
in AIR 2013 SC 5018. Both complainant and
accused have filed notes of arguments.
09. On the basis of contentions raised in the
complaint the points that arises for determination of
this Court are as follows:
1.Whether the complainant proves that,
the accused issued the cheque
towards discharge of legally
enforceable debt?
2.Whether the complainant proves the
guilt of the accused for the offence
punishable under section 138 of
Negotiable Instruments Act?
3.What order?
10. Now, this Court answers to above points
are as follows:
Point No.1: In the Affirmative;
Point No.2: In the Affirmative;
Point No.3: As per final order for
the following:
8 C.C.No.11275/2022
:: R E A S O N S ::
11. POINTS No.1 and 2: Since these points are
inter-relating with each other, they are taken up
together for common discussion to avoid the repetition
of facts and findings.
12. This case is tried as summons case. As this
matter is tried as summons case, this Court relies on
the evidence recorded by learned predecessor in office.
In that regard, this Court relies on decision of Hon’ble
Supreme Court of India in the case of Mehsana
Nagarik Sahkari Bank Ltd., V/s Shreeji Cab Co. &
Others reported in 2014(13) SCC 619. Wherein the
Hon’ble Supreme Court had observed that de-nova
hearing is necessary only when the evidence is
recording in summary manner. Therefore, this Court
has proceeded with the case on the basis of part
evidence recorded previously.
9 C.C.No.11275/2022
13. Before proceeding with the discussion, in
order to prove the guilt of offence under section 138 of
N.I. Act, initial burden casts on the complainant to
prove the following ingredients:
a) The cheque must have been drawn
for discharge of existing debt or
liability.
b) Cheque must be presented within
validity period.
c) Cheque must be returned unpaid due
to insufficient funds or it exceeds the
amount arranged.
d) Fact of dishonour be informed to the
drawer by notice within 30 days.
e) Drawer of cheque must fail to make
payment within 15 days of receipt of
the notice.
14. In order to prove the case, the SPA holder of
complainant, Sri Sandeep Hemaraj, has examined
himself as PW1. The PW1 has filed an affidavit in lieu of
examination-in-chief reiterating entire complaint
averments. In support of his oral evidence, he
10 C.C.No.11275/2022
produced Ex.P1 to 24 documents. The complainant got
marked 4 original cheques as Ex.P1 to 4, signatures of
accused as Ex P1(a), 2(a), 3(a), 4(a), six bank
endorsements as Ex.P 5 to 10, demand notice as
Ex.P11, three postal postal receipts as Ex.P 13 to 15,
postal acknowledgment as Ex.P8, two returned postal
envelops as Ex P 16 and 17, its notices as Ex P 16(a),
17(a), copy of partnership deed as Ex P18, MOU as Ex
P19, Cancellation of MOU as Ex P20, statement of
account as Ex P21, 3 income tax returns
acknowledgment as Ex P 22 to 24.
15. During cross-examination of PW1, defence has
suggested accused has returned all payments received
under MOU. PW1 denied said suggestions as false.
Further defence suggested he is ready to make
payment as per Ex P9. PW1 denied sid suggestions as
not true. The PW1 deposed accused has received
11 C.C.No.11275/2022
security deposit and he did not conducted work ,
therefore they have cancelled the MOU.
16. The evidence of PW1 and Ex.P.1 to Ex.P24 clearly
show the complaint is filed within time and all the
ingredients of section 138 of N.I.Act. The cheque is issued
for legally recoverable debt and it is dishonored for
insufficient fund. Only Ex P2 cheque is dishonoured for
reason payment stopped by drawer. Still the said
endorsement of bank raises cause of action for the offence
punishable under section 138 of Negotiable Instruments
Act. The said point is settled by Hon’ble Supreme Court of
India in its reported Judgment in the case of Laxmi
Dyechem Vs State of Gujarath reported in 2012(13)
SCC 375. The said fact is brought to the notice of accused.
But said notice not served to accused. The postal envelope
does not show specific reason. But accused did not contest
the address mentioned in said envelope. The MOU also
suggest same address of accused. The demand notice sent
to correct address. As per section 27 of General clauses Act
12 C.C.No.11275/2022
reciept of demand notice to correct address is sufficient. But
till date the accused did not comply the demand of the
complainant for payment of amount mentioned in the
cheque. Therefore, PW1 has discharged his burden to prove
the ingredients of the offence punishable under section 138
of Negotiable Instruments Act.
17. Another aspect is to consider whether the Ex.P1
to 4 cheques and Ex.P1(a), 2(a), 3(a), 4(a) signatures
belongs to the accused or not. The defense has admitted Ex
P1 to 4 cheques belong to accused and those cheques bears
his signature. These facts clearly shows that the cheques in
dispute is belongs to accused and he has signed the said
documents. Therefore, presumption under section 118 and
139 of N.I. Act lies in favour of the complainant.
18. As per provision of section 118 and 139 of N.I.
Act, the court has to presume liability of the accused and to
such amount mentioned in the cheque to discharge legally
recoverable debt. The said aspect was denied by the
accused. Once the execution of cheque is admitted section
13 C.C.No.11275/2022
139 of the Act mandates a presumption that the cheque
was for the discharge of any debt or other liability.
Thereafter, the onus of proving non existence of debt or
liability is on accused and standard of proof for rebutting
presumption is preponderance of probabilities. To rebut
presumption it is open for the accused to rely on evidence
or the accused can also rely on the materials submitted by
the complainant in order to raise probable defense.
19. In that regard, the Hon’ble Supreme Court of
India in its Judgment reported in 2019(5) SCC 418 in the
case of Basalingappa V/s Mudibasappa discussed the
manner in which accused could rebut the presumption
raised under section 118 and 139 of Negotiable instruments
Act. The Hon’ble Supreme Court of India in the case of
Basalingappa Vs. Mudibasappa reported in 2019 (5)
SCC 418 laid down principles regarding how presumption
under section 118 and 139 of N.I.Act can be rebutted.
20. To rebut the presumptions, accused entered into
witness box as DW1. DW1 has deposed on 2020
14 C.C.No.11275/2022
complainant has approached him to seeking lease of his
shed and he has agreed to lease out the premises. As per
the negotiations, complainant have agreed to pay monthly
rent of Rs 1,20,000/- and advance amount of Rs
10,00,000/-. They have paid only Rs 9,00,000/-. But after
one month complainant has approached him and stated
they want to cancel the lease and sought return of
payments. He has refused to cancel the lease. However he
has issued four cheques by writing its amount and affixing
his signatures and handed over cheques without mentioning
the date. Though he has constructed the building as per
requirement of complainant, they did not came back for
lease. Further he has contended he has transacted with
father of complainant. Further he has stated he is ready to
make payment in installments.
21. During cross examination, he has admitted
execution of MOU and he could not complete work within
stipulated time of MOU. Dw1 has explained as complainant
was making delayed payments he could not complete work
15 C.C.No.11275/2022
for lack of labourers. Further he has admitted the execution
of Cancellation of MOU and he is aware of its contents.
22. In the notes of arguments filed by accused, he
has contended he has transacted with father of complainant
and not with complainant. It is evident to note, Dw1 has
specifically admitted the contents of Ex 19 and 20
documents. The said documents contradict the claim of
Dw1. It is well settled law that documentary evidence
prevails over the oral testimony. Therefore explanation of
Dw1 is not believable. Further Dw1 has admitted the
payments of Rs 9,00,000/-. The statement of account
produced by complainant marked as Ex P21 proves the
payment of Rs 9,00,000/-. Though during cross
examination of PW1, it is suggested said amount is paid, no
document is produced by accused to prove said fact. In fact
Dw1 did not depose said fact in his evidence. Therefore
inconsistent version of Dw1 made in respect of repayment,
defence failed to prove entire Rs 9,00,000/- is paid. In this
case accused has admitted the execution of MOU, receiving
16 C.C.No.11275/2022
payment of Rs 9,00,000/- and issuance of cheque with
mentioning its amount and affixing signatures. Therefore
said admitted version comes within purview of Section 20 of
N.I.Act.
23. At this stage, it is evident to note in the
Judgement of Hon’ble Supreme Court of India in the case
of Bir Singh Vs Mukesh Kumar reported in 2019(4) SCC
197 observed as follows:
“36. 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 be on the accused to prove that
the cheque was not in discharge of a debt
or liability by adducing evidence.”
24. In the said Judgment itself the Hon’ble
Supreme Court of India further observed as follows:
“In the absence of any finding that
the cheque in question was not signed by
the respondent-accused or not voluntarily
17 C.C.No.11275/2022made over to the payee and in the
absence of any evidence with regard to the
circumstances in which a blank signed
cheque had been given to the appellant-
complainant, it may reasonably be
presumed that the cheque was filled in by
the appellant-complainant being the payee
in the presence of the respondent-accused
being the drawer, at his request and/or
with his acquiescence. The subsequent
filling in of an unfilled signed cheque is not
an alteration. There was no change in the
amount of the cheque, its date or the
name of the payee. The High Court ought
not to have acquitted the respondent-
accused of the charge under Section 138
of the Negotiable Instruments Act.”
25. As per the said Judgment, the complainant could
fill up the other writings of cheque in the presence of
accused if it is voluntarily handed towards some liability.
Therefore, proof of existence of legal liability is to be
existed to do said act. In this case Dw1 has admitted the
liability to pay as per Ex P19 and 20. Payments as per Ex
18 C.C.No.11275/2022
P21 is proved fact. Therefore accused has failed to rebut
the presumptions raised under section 118 and 139 of
N.I.Act.
26. The accused has filed notes of arguments
contending the cheques are not issued in the name of
complainant or his firm and he did not mentioned the dates.
Therefore he contended cheques contains material
alterations and it is void instrument. The term material
alteration is not defined either in the Indian Contract Act,
1872 or in the Negotiable Instruments Act, 1881 even
though documents relating to these acts suffer frequent
alterations. The term material alteration does not appear to
have received any exact definition from legislature in any
enactment in India.
27. The Privy Council in the case of Nathu Lal v.
Gomti Kuar reported in AIR 1940 PC 160 cited the
following paragraph from the Halsbury’s Laws of England,
which explains the term material alteration very succinctly:
19 C.C.No.11275/2022
“A material alteration is one which varies the
rights, liabilities, or legal position of the parties
ascertained by the deed in its original state or
otherwise varies the legal effect of the instrument
as originally expressed, or reduces to certainty
some provision which was originally unascertained
and as such void, or may otherwise prejudice the
party bound by the deed as originally executed,”
28. The Supreme Court of India in the case of Seth
Loonkaran Sethia v. Ivan E. John reported in 1977(1)
SCC 379 has approved the aforesaid proposition of law on
concept of material alteration. In this case accused has
admitted his liability and execution of cancellation of MOU.
The Ex P19 and 20 shows the liability of accused to
repayment. But he did not acted as per the Ex P19 and he
is liable to return the payments as per Ex P 20. Therefore
issuance of signed cheque without mentioning its date and
name of drawer does not amounts an act of material
alteration. The act of filling up name and date by
complainant comes purview of section 20 of N.I.Act. When
accused has admittedly accepted that he has voluntarily
20 C.C.No.11275/2022
handed over signed cheque towards the liability as per Ex
P20, question of material alteration does not arise. Under
these circumstances accused has failed to rebut the
presumptions raised under section 118 and 139 of N.I.Act.
29. The Full bench judgement of Hon’ble Supreme Court
of India in the case of Rangappa vs Sri Mohan reported in
2010(11) SCC 441 held that presumption mandated by
section 139 of N.I.Act does indeed include the existence of
legally enforceable debt or liability. Therefore, once the
initial burden is discharged by the complainant that the
cheque is issued by accused and the signature, the burden
casted on the accused to prove the contrary that cheque is
not issued for any debt or other liability. The said
proposition of law is laid down by Hon’ble Supreme Court of
India in the case of the P Rasiya vs Abdul Nazer and
another. In the Judgement of Hon’ble Supreme Court of
India reported in 2021 (5) SCC 283 in the case of M/S
Kalamani Tex vs P. Balasubramanian. In the para 13 of
21 C.C.No.11275/2022
said Judgement the Hon’ble Supreme Court observed as
follows:
“13. Adverting to the case in hand, we find on a
plain reading of its judgement that the trail court
completely overlooked the provisions and failed to
appreciate the statutory presumption drawn under
section 118 and section 139 of N.I.Act. The statute
mandates that once the signature(s) of an accused
on the cheque/negotiable instrument are
established, then these “reverse onus” clause
become operative. In such a situation, the
obligation shifts upon the accused to discharge the
presumption imposed upon him. The point of law
has been crystallized by the court in Rohitbhai
Jivanlal Patel vs State of Gujarath…”
30. Considering aforesaid legal proposition, burden
casted on accused to disprove the case of complainant and
his defence must be found more probable. Once the initial
burden is discharged by the complainant that the cheque is
22 C.C.No.11275/2022
issued by accused and the signature, the burden casted on
the accused to prove the contrary that cheque is not issued
for any debt or other liability. However in this case accused
has failed to make probable defence to rebut the
presumptions. The defence of accused is found self serving
statement and it is not sufficient to rebut the presumptions.
Hence, on the basis of the evidence of PW1 and Ex.P1 to 24
documents, the complainant has proved the case and
complainant is entitled for recovery of the amount as
compensation.
31. On considering the facts and circumstances of
the case, the complainant has able to establish that
cheques are issued to discharge liability of repayment of
Rs.9,00,000/- to complainant by the accused. Ex.P1 to 4
cheques are dishonoured and complainant is entitled for
the cheque amount as compensation. Further, complainant
is entitled for compensation of Rs.10,000/- as cost of the
proceedings. The accused is not a repeated offender.
Hence, there is no need to award imprisonment term.
23 C.C.No.11275/2022
However, accused is liable to pay the fine amount of
Rs.10,000/- to the state towards litigation expenses. Under
these circumstances, this Court answers Points No.1 and 2
in the Affirmative.
32. POINT No.3: For the foregoing reasons stated
in the Points No.1 and 2, this Court proceeds to pass the
following:
ORDER
The accused found guilty for the offence
punishable under section 138 of Negotiable
Instruments Act.
Acting under section 255(2) of Cr.P.C,
the accused is convicted for the offence
punishable under section 138 of the
Negotiable Instruments Act. The accused is
sentenced to pay a fine of Rs 9,20,000/- and
in case of default he shall undergo simple
imprisonment for 6 months.
Out of the fine amount, Rs 9,10,000/-
shall be paid to the complainant as
compensation as per section 357(1)(b) of
Cr.P.C. The remaining amount out of fine
24 C.C.No.11275/2022amount of Rs.10,000/- shall be defray to the
State.
In view of section 437(A) of Cr.P.C. bail
bonds stand extended for 6 months from this
date.
Supply free copy of Judgment to the
accused.
(Dictated to the stenographer directly on computer, typed by her, revised and corrected by me
th
26 day of December, 2024
and signed, pronounced in the Open Court this )
Digitally signed
RASHMI by RASHMI H B
HB Date: 2024.12.27
11:07:51 +0530
(SMT.RASHMI H.B.,)
XIX ADDL.C.J.M., Bengaluru City.
::ANNEXURE::
List of Witnesses examined for Complainant:
PW1 :- Sandeep Hemaraj
List of Documents marked for Complainant:-
Ex.P1 to 4 :- 4 Original Cheques,
ExP1a,2a,3a,4a :- Signatures of Accused,
Ex.P 5 to 10 :- Six Bank Endorsements,
Ex.P11 :- Office copy of the Legal Notice,
Ex.P12 :- Letter,
Ex.P13 to 15 Three Postal Receipts,
Ex.P16 &17 :- Two returned postal covers,
Ex.P16(a)&17(a) :- Legal Notice in Exp16 & 17,
Ex.P18 :- Copy of partnership deed,
25 C.C.No.11275/2022
Ex.P19 :- Memorandum of Understanding,
Ex.P.20 :- Cancellation of MOU,
Ex.P21 :- Statement of Bank Account,
Ex.P22 to 24 :- Income tax returns acknowledgments.
List of Witnesses examined for Accused:
Dw1 :- Shashidahar
List of Documents marked for Accused:
- Nil - Digitally signed
RASHMI by RASHMI H B
HB Date: 2024.12.27
11:07:59 +0530
(SMT.RASHMI H.B.,)
XIX ADDL.C.J.M., Bengaluru City.
26 C.C.No.11275/2022