Bangalore District Court
Ramesh Valecha vs Piyush Todi on 23 December, 2024
1
CC No. 8818/ 2022
KABC030224302022
Presented on : 19-03-2022
Registered on : 19-03-2022
Decided on : 23-12-2024
Duration : 2 years, 9 months, 4 days
IN THE COURT OF XX ADDL.CHIEF JUDICIAL
MAGISTRATE AT BENGALURU CITY
PRESENT: SRI. SHRISHAIL BHIMASHEN BAGADI,
B.Com.,L.L.B.,
XX ADDL. C.J.M., Bengaluru.
Dated this the 23rd day of December 2024
C.C.No. 8818/ 2022
Complainant : Ramesh Valecha,
s/o. Manoharlal Valecha,
Aged about 50 years,
D 502, 5th floor,
Wilson Manor Apratments,
13th Cross, Wilson Garden,
Bangalore - 560 027
(By Sri. Vijay Kumar -Advocate)
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CC No. 8818/ 2022
Accused : 1. Piyush Todi,
Major,
S/o.Sri. Lallan Kumar Todi
Director : Coast Liners Private Limited,
Unit No. 415, 4th Floor, Shree Complex
No.73, St. Johns Road,
Bangalore - 560 042
R/at
Villa No.362, Ferns City,
Doddanekkundi, Outer Right Road,
Marathahalli,
Bangalore - 560 037
2. Coast Liners Private Limited,
Unit No. 415, 4th Floor, , Shree Complex
No.73, St. Johns Road,
Bangalore - 560 042
Represented by Director
(By Smt. Binu M.- Advocate)
Offence complained : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
Final Order : Accused is convicted.
Date of Judgment : 23.12.2024
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CC No. 8818/ 2022
JUDGMENT
The complainant has filed this complaint under
Section 200 of the Code of Criminal Procedure against the
accused, alleging that the accused has committed an
offense punishable under Section 138 of the Negotiable
Instruments Act.
02. The brief facts of the Complainant’s case are as
under;
The accused No.1 being the Director of the accused
No.2 and being well known to the Complainant from past
three years had approached the Complainant in the first
week of February 2020 and had sought for loan of
Rs.7,20,000/- from the Complainant for urgent business
purposes. Accordingly the Complainant paid a sum of
Rs.7,20,000/- to the accused as loan on 14.02.2020 by
way cheque No. 307478 dated 14.02.2020 for
Rs.7,20,000/- drawn on Canara Bank, Bangalore which
was encashed by the accused and accused No.1 and 2
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CC No. 8818/ 2022
executed on demand promissory note and consideration
receipt on 14.02.2020 for Rs.7,20,000/- in favour of
complainant. The accused No.1 and 2 paid a sum of
Rs.86,400/- by way of NEFT transferred to the bank
account of the Complainant on 17.02.2020 to the
Complainant towards interest in respect of the aforesaid
loan. On repeated demand and personal approaches made
by the Complainant, accused No.1 representing accused
No.2 had issued 2 cheques bearing No.118874 dated
14.09.2021 for Rs.60,000/- and another cheque bearing
No.105432 dated 02.12.2021 Rs.3,60,000/- both the
cheques drawn on YES Bank Ltd., Kasturba Road,
Bengaluru – 560 001 in favour of complainant towards part
payment. As per the instructions of the accused, the
complainant presented the cheque on 02.12.2021 for
encashment through Canara Bank, Hombegowdanagar,
Bengaluru, but the aforesaid cheque returned with
endorsement as “Account closed” as per the cheque
return memo dated 03.12.2021. The factam of dishonour of
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CC No. 8818/ 2022
a cheque duly communicated to the accused through legal
notice dated 09.12.2021. The notice issued by the
complainant to the business address was returned as ‘Left’
and the notice sent to the residential address was duly
served on 13.12.2021. Despite the service of notice and
lapse of the statutory period of 15 days, the accused did
not come forward to pay the cheque amount nor issued a
reply notice. Therefore, the accused has committed an
offence punishable under Section 138 of the Negotiable
Instruments Act.
03. The complainant to prove the material allegations
made in the complaint examined himself as PW1 and got
marked the documents as per Ex.P1 to P13. The court
took cognizance of the offence under Section 138 of the
Negotiable Instruments Act based on the complaint
averments, sworn statement and marked documents and
also registered the criminal case and issued summons to
the accused. On receipt of summons, the accused
appeared before the court through his counsel and was
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CC No. 8818/ 2022
enlarged on bail. The substance of the accusation read over
and explained to him; he did not plead guilty and claimed
to be tried. In compliance with section 145(1) of the
Negotiable Instruments Act, the sworn statement affidavit
of the Complainant treated as chief examination and
posted the matter for cross examination of PW1, thereafter
the accused remained absent before the court, despite
issuing NBW the presence of accused could not be secured
before the court, consequently the cross of PW1 was taken
as Nil and also dispensed recording of statement of
accused under Section 313 of Cr.P.C. as per ratio laid
down by the Hon’ble High Court of Karnataka in Crl.Rev.
Pet.1333/2018 dated 02.02.2023 between Sri.B.N.
Ashwathnarayana V/s. Sri.Shankar, in this case, the
hon’ble High Court has held that, the offense under section
138 of NI Act, has to be tired summarily, and there is no
need to record the statement of the accused under section
138 of the Negotiable Instruments Act, when the accused
intentionally absent before the court to cause delay in
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CC No. 8818/ 2022
disposal of the case, accordingly the statement of the
accused dispensed with and posted the matter for defense
evidence, but the accused remained absent before the
court, hence the defense evidence of the accused taken as
nil.
04. On perusal of the complaint averments and
documents produced along with complaint, the following
points that arise for my consideration;
POINTS FOR CONSIDERATION
1. Whether the complainant proves
beyond all reasonable doubt against
the accused that, the accused had
issued 2 cheques bearing
No.118874 dated 14.09.2021 for
Rs.60,000/- and another cheque
bearing No.105432 dated
02.12.2021 Rs.3,60,000/- both the
cheques drawn on YES Bank Ltd.,
Kasturba Road,, Bengaluru – 560
001, to discharge legally recoverable
debt ?
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CC No. 8818/ 2022
2. Whether the court can dispense
the recording of the statement of the
accused under Section 313 of the
Cr.P.C. in the summary trial ?
3. What Order or sentence ?
05. Heard Arguments from the learned counsel for
Complainant.
06. The learned counsel for Complainant in
support of his arguments placed his reliance on the
judgment of the Hon’ble High Court of Karnataka decided
in Crl.Rev. Pet.1333/2018 dated 02.02.2023 between
Sri.B.N. Ashwathnarayana V/s. Sri.Shankar .
07. Upon hearing arguments and on perusal of oral
and documentary evidences made available by the
Complainant and on going through the ratio laid down in
the decision relied upon by the learned counsel for
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CC No. 8818/ 2022
Complainant, my answers to the above points are as
under.
1. Point No.1: In the Affirmative
2. Point No.2: In the Affirmative
3. Point No.3: As per final order
for the following;
REASONS
POINT No.1 & 2 :
08. These points are inter connected with each
other, hence to avoid repetition of facts and appreciation of
evidences, both points are taken together for common
discussion.
09. The complainant has filed this complaint
against the accused for the offense punishable under
Section 138 of the Negotiable Instruments Act. The
accused No.1 being the Director of the accused No.2 and
being well known to the Complainant from past three
years had approached the Complainant in the first week of
February 2020 and had sought for loan of Rs.7,20,000/-
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CC No. 8818/ 2022
from the Complainant for urgent business purposes.
Accordingly the Complainant paid a sum of Rs.7,20,000/-
to the accused as loan on 14.02.2020 by way cheque No.
307478 dated 14.02.2020 for Rs.7,20,000/- drawn on
Canara Bank, Bangalore which was encashed by the
accused and accused No.1 and 2 executed on demand
promissory note and consideration receipt on 14.02.2020
for Rs.7,20,000/- in favour of complainant. The accused
No.1 and 2 paid a sum of Rs.86,400/- by way of NEFT
transferred to the bank account of the Complainant on
17.02.2020 to the Complainant towards interest in respect
of the aforesaid loan. On repeated demand and personal
approaches made by the Complainant, accused No.1
representing accused No.2 had issued 2 cheques bearing
No.118874 dated 14.09.2021 for Rs.60,000/- and another
cheque bearing No.105432 dated 02.12.2021
Rs.3,60,000/- both the cheques drawn on YES Bank Ltd.,
Kasturba Road,, Bengaluru – 560 001 in favour of
complainant towards part payment. As per the
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CC No. 8818/ 2022
instructions of the accused, the complainant presented the
cheque on 02.12.2021 for encashment through Canara
Bank, Hombegowdanagar, Bengaluru, but the aforesaid
cheque returned with endorsement as “Account closed”
as per the cheque return memo dated 03.12.2021. The
factam of dishonour of a cheque duly communicated to the
accused through legal notice dated 09.12.2021. The notice
issued by the complainant to the business address was
returned as ‘Left’ and the notice sent to the residential
address was duly served on 13.12.2021. Despite of service
of notice the accused failed to discharge his liability.
10. The complainant to prove his case examined
himself as PW1, in his examination in chief affidavit, he
has reiterated the averments made in the complaint. In
addition to the oral evidence, the complainant has
produced documents as per Ex.P1 to P13. Among these
documents, Ex.P1 and 2 are the cheques issued by
accused in favour of complainant and the signatures of
the accused is marked as Ex.P1(a) and 2(a). Ex.P3 and 4
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CC No. 8818/ 2022are the cheque return memos wherein it is mentioned that
the cheque issued by the accused came to be returned due
to “Account closed”. Ex.P5 is the office copy of the legal
notice issued by the complainant in favour of accused
calling upon him to pay the cheque amount. Ex.P.6 to 8
are the postal receipts, Ex.P9 is the postal
acknowledgment, Ex.P10 and P11 are the closed postal
covers, Ex.P12 is the reply notice, Ex.P13 is the pronote.
The accused remained absent before the court after
recording his plea, thereafter, the court took coercive steps
by dispensing the statement of accused under Section 313
of Cr.P.C. and also taking the defense evidence of accused
as Nil. Now the question that arises before the court is
whether the court can dispense the recording of a
statement under Section 313 of Cr.P.C., In this regard, it is
relevant to see the provisions of law as contemplated under
Section 143 of the Negotiable Instruments Act, which
starts with a non-obstante clause. Section 143 of the
Negotiable Instruments Act speaks that,
13
CC No. 8818/ 2022“notwithstanding anything contained
in the code of criminal procedure
1973, an offenses under this chapter
shall be tried by the Judicial
Magistrate of first class or by
Metropolitan Magistrate and the
provisions of section 262 to 265 (both
inclusive) of the said code shall, as
far as may be, apply to such trials,
provided that in the case any
conviction in summary trial under
this section, it shall be lawful for the
Magistrate to pass sentence of
imprisonment for a term not
exceeding one year and amount of
fine exceeding Rs.5,000/-“. Provided
further that, at the commencement
of, or in the course of, a summary
trial under this section, it appears to
14
CC No. 8818/ 2022Magistrate that the nature of the
case is such that, a sentence of
imprisonment for term exceeding one
year may have to be passed or that it
is, for any other reason, UN-desirable
to try the case summarily, the
Magistrate after hearing the parties
record the order to that effect and
thereafter recall any witnesses who
made have been examined and
proceeded to hear or rehear the case
in the manner provided by the said
code.
11. The provision of Section 143 of the Negotiable
Instruments Act makes it very clear that the offenses under
Section 138 of the Negotiable Instruments Act shall be
tried summarily as per Sections 262 to 265 of the Cr.P.C.
On going through sections 262 to 265 of the Cr.P.C., there
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CC No. 8818/ 2022is no stage for recording the statement of the accused
under section 313 of the Cr.P.C. If for any other reason the
Magistrate forms an opinion that it is undesirable to try the
case summarily and upon passing orders and converting
the case into a summons trial, then only the Magistrate
can record the statement of the accused under Section 313
of Cr.P.C. the same proposition of law has been discussed
in the decision of Hon’ble High Court of Karnataka decided
in Crl.Rev. Pet.1333/2018 dated 02.02.2023 between
Sri.B.N. Ashwathnarayana V/s. Sri.Shankar, wherein
Hon’ble High Court of Karnataka held that, if the accused
remained absent before the court at the time of recording
the statement under section 313 of Cr.P.C. and at the time
of processing judgment and in passing sentence, there is
no requirement of recording statement of the accused
under section 313 of Cr.P.C. as the matter of fact record of
summary trail under section 263 of Cr.P.C. does not
provide for recording of statement under section 313 of
Cr.P.C..
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12. The statement of the accused under Section 313
of the Cr.P.C. in the negotiable instrument act is nothing
but verbatim reproduction of the plea of the accused; if the
accused contests the matter by cross-examining the
complainant and raises a new defence, then only the court
can explain the incriminating circumstances to the
accused other than the verbatim reproduction of his plea.
But in this case, the learned counsel for the accused did
not come forward to cross-examine the PW.1, and the
accused has not established his defence. Under such
circumstances, postponing the matter for recording of his
statement under Section 313 of the Cr.P.C. is nothing but
wasting the precious time of the court and prolonging the
litigation. If the accused has any valid defense, then he
could have appeared before the court and cross-examined
the complainant; therefore, recording the statement of the
accused under Section 313 of the Cr.P.C. is not mandatory
when the accused is intentionally absent before the court.
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13. The complainant, to fulfill the requirements of
Section 138 of the Negotiable Instruments Act, has
produced the documents as per Ex.P1 to P13. On perusal
of Ex.P1 and 2 discloses that the accused had issued the 2
cheques to discharge a legally recoverable debt of
Rs.60,000/- and Rs.3,60,000/- respectively in favour of
the complainant. On perusal of Ex.P3 and P4 they
discloses that the cheques in question issued by the
accused came to be returned with the endorsement
“Account closed”. Further, on perusal of Ex.P5, it
discloses that the complainant has demanded the cheques
amount by issuing a legal notice to the accused personally,
calling upon him to pay the cheque amount, failing which
they will be liable to face criminal prosecution under
Section 138 of the Negotiable Instruments Act. On perusal
of Ex.P9 it discloses that the demand notice issued by the
complainant in favour of the accused duly served to the
accused, despite of service of legal notice, the accused did
not come forward to pay the cheque amount. Therefore, on
18
CC No. 8818/ 2022perusal of documentary evidence, it is clear that, the
complainant has complied with the mandatory
requirements of Section 138 of the Negotiable Instruments
Act. In order to bring the accused persons into the purview
of Section 138 of the Negotiable Instruments Act, the
complainant is required to prove the issuance of a cheque
by the accused to discharge legally recoverable debt and
also the issuance of demand notice and failure on the part
of the accused to pay the cheque amount after the lapse of
15 days from the date of receipt of legal notice. Section 139
of the Negotiable Instruments Act speaks that, until the
contrary is proved, the court has to presume that the
cheque in question was issued by the accused to pay the
legally recoverable debt. Further, the accused has not
challenged the issuance of a cheque and signature
appearing on the cheque , which itself is sufficient to prove
the guilt of the accused beyond all reasonable doubt.
Further, the accused remained absent before the court
after recording his plea, and his counsel did not come
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CC No. 8818/ 2022forward to cross-examine PW1 to challenge the validity of
the documents marked in favour of complainant, therefore,
the accused persons have not adduced rebuttal evidence.
14. The Hon’ble Supreme Court of India in the latest
decision reported in 2023 SCC Online SC 1275 between
Rajesh Jain Vs Ajay Singh, in this case the Hon’ble
Supreme Court of India has held that, the legal burden is
the burden of proof which remains constant throughout a
trial. On the other hand, the evidential burden may shift
from one party to another as the trial progresses, according
to the balance of evidence given at any particular stage. In
all trials concerning dishonour of cheque, the court are
called upon to consider whether the ingredients of the
offence enumerated in section 138 of the Act have been
met and if so, whether the accused was able to rebut the
statutory presumption contemplated by section 139 of the
Act, further, it said that section 139 is a reverse onus
clause and requires the accused to prove the non-existence
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CC No. 8818/ 2022of the presumed fact, I,e that cheque was not issued in
discharge of a debt/ liability. Further held that, the NI Act
provides for two presumptions, one under section 118 of
the Act, which directs that it shall be presumed, until the
contrary is proved, that every negotiable instrument was
made or drawn for consideration. Further, under section
139, which stipulates that unless the contrary is proved, it
shall be presumed that the holder of the cheque received
the cheque for the discharge of, whole or part of any debt
or liability. The ‘presumed fact’ directly relates to one of the
crucial ingredients necessary to sustain a conviction under
section 138 of the NI Act. Further held that, section 139 of
the NI Act, which takes the form of a ‘shall presume’ clause
is illustrative of a presumption of law. It is obligatory for
the court to raise this presumption has been established.
But this does not preclude the person against whom the
presumption has been established. But this does not
preclude the person against whom the presumption is
drawn from rebutting it and proving the contrary, as is
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CC No. 8818/ 2022clear from the use of the phrase ‘ unless the contrary is
proved’, after taking note of Bir Singh Vs Mukesh Kumar
(2019)4 SCC 197, wherein it was held that presumption
takes effect even in a situation where the accused contends
that ‘ a blank cheque leaf was voluntarily signed and
handed over by him to the complainant, without admitting
the execution of the entire contents in the cheque, is not
sufficient to trigger the presumption. Further held that, as
soon as the complainant discharges the burden to prove
that, the instrument was issued by the accused for
discharge of debt, the presumptive device under section
139 of the Act, that helps to shift the burden on the
accused of proving that the cheque was not received by the
bank towards the discharge of any liability. Until this
evidential burden is discharged by the accused, the
presumed fact will have to be taken to be true, without
expecting the complainant to do anything further. In the
case of Basalingappa Vs Mudibasappa (2019) 5 SCC 418
held that, to rebut the presumption and prove to the
22
CC No. 8818/ 2022contrary, it is open to the accused to raise a probable
defence, wherein the existence of a liability enforceable
debt or liability can be contested. The words ‘ until the
contrary is proved’ occurring in Section 139 do not mean
that accused must necessarily prove the negative that the
instrument is not issued in discharge of any debt/liability,
but the accused has two options. The first option is to
prove that the debt/liability does not exist and conclusively
establish the cheque was not issued in discharge of a
debt / liability. The second option is to prove the non
existence of debt / liability by a preponderance of
probabilities by referring to the circumstances of the case.
The nature of evidence required to shift the evidential
burden need not necessarily be direct I,e oral or
documentary evidence or admissions made by the opposite
party ; it may comprise circumstantial evidence or
presumption of law or fact.
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CC No. 8818/ 2022
15. Therefore, keeping in mind the ratio laid down in the
above-mentioned decision, it is clear that the complainant
has proved the initial burden as contemplated under
Section 139 of the Negotiable Instruments Act regarding
the issuance of cheque by the accused to discharge legally
recoverable debt and also proved the statutory
presumption as provided under Section 118(a) of the
Negotiable Instruments Act that he is the holder in due
course of the cheque issued by the accused to discharge
legally recoverable debt. On perusal of complaint
averments, it is disclosed that, the accused has received an
amount of Rs.7,20,000/-, and for discharge of part
payment of the principle amount, had issued the disputed
2 cheques for Rs.60,000/- and Rs.3,60,000/-; therefore,
the accused is liable to pay the additional compensation
amount of Rs. 50,000/- and litigation expense of
Rs.10,000/-. Therefore, the complainant has proved his
case beyond all reasonable doubt. Further more, the
accused has not contested the matter by cross examining
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CC No. 8818/ 2022
the PW1, therefore it is a fit case to convict the accused.
Accordingly, I answer point No.1 and 2 in the Affirmative.
16. POINT NO.2: In view of the above findings, this
court proceed to pass the following;
ORDER
Acting under Section 255(2) of code
of criminal procedure, the accused No.1
and 2 are hereby convicted for the offense
punishable under Section 138 of
Negotiable Instruments Act.
As per section 357(1)(b) of code of
criminal procedure, the accused No.1
shall pay a fine of Rs.4,85,000/-(Rupees
Four Lakhs Eighty Five thousand only)
(compensation amount and litigation
expenses ) out of that Rs.4,85,000/-
(Rupees Four Lakhs Eighty thousand
only) payable to the Complainant as
compensation and of Rs.5,000/- (Rupees
Five Thousand only) is remitted to the
state of government, in default of
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CC No. 8818/ 2022
payment of fine the accused No.1 shall
under go simple imprisonment for a
period of 3 months.
The bail bond and surety bond
executed by the accused No.1 stands
canceled.
The office is directed to supply free
copy of the judgment to the accused No.1.
{Dictated to the stenographer, transcribed and computerized by her, revised corrected
and then pronounced in the open court on this 23rd day of December 2024}.
(SHRISHAIL BHIMASHEN BAGADI)
XX A.C.J.M., Bengaluru.
ANNEXURE
List of witnesses examined on behalf of complainant:
P.W.1 Ramesh Valecha
List of documents produced on behalf of complainant:
Ex.P.1 and 2 Cheques
Ex.P.1(a) & 2(a) Signatures of the accused
Ex.P.3 & 4 Bankers Return Memos
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CC No. 8818/ 2022
Ex.P.5 Copy of the legal notice
Ex.P.6 to 8 Postal Receipts
Ex.P9 Postal acknowledgment
Ex.P10 and 11 Closed postal covers - 2 Nos.
Ex.P12 Reply notice
Ex.P13 DP note
List of witnesses examined on behalf of accused:
Nil
List of documents produced on behalf of accused:
Nil
XX A.C.J.M.,
Bengaluru.