C.C.No.765 of 2015 1 Dt. 28-03-2024
IN THE COURT OF SPL. JUDICIAL MAGISTRATE OF FIRST CLASS FOR TRIAL
OF CASES UNDER TELANGANA PROHIBITION AND EXCISE ACT-cum-IV
ADDITIONAL JUNIOR CIVIL JUDGE, WARANGAL
Thursday, the 28th day of March, 2024.
Present: Ms. G.Sashee, Spl. J.M.F.C. for Trial of Cases under T.S.Proh. & Excise Act-cum-IV Addl.J.C.J., Warangal.
C.C.No.765 of 2015
Between: Purushotham Mundada, S/o Satyanarayana Mundada, Age: 48 years, Occ:
Business, R/o H.No.8-4-71/72, Sri Krishna Colony, Station Road, Warangal.
… Complainant.
AND
Pollam Shailaja, W/o Raghothotham Reddy, Age: 47 years, Occ: Employee, R/o
H.No.1-7-1001, Hunter Road, Warangal.
...Accused.
Section of Law138 of the Negotiable Instruments Act, 1881.
Plea of the AccusedPleaded not guilty. Finding of the courtFound guilty. Sentence or OrderIn the result, Accused is found guilty for the offence punishable under section 138 of the Negotiable Instruments Act and consequently the Accused is convicted under section 255(2) Cr.P.C. As such Accused is sentenced to undergo Simple Imprisonment for a period of Six (6) months and also to pay fne of Rs.30,10,000/- and in default of payment Accused shall undergo simple imprisonment for a period of (2) months for the offence under section 138 of the N.I. Act. Out of the fne amount of Rs.30,10,000/-, Rs.10,000/- to be paid on the date of judgment and the same shall go to the State and the remaining fne amount of Rs.30,00,000/- shall be paid to the Complainant as compensation under section.357(1)(b) Cr.P.C., within three months from the date of Judgment. A free copy of Judgment shall be given to Accused as per section 363 Cr.P.C r/w Rule 72 of Criminal Rules of Practice and Circular Orders, 1990. As the Accused was not remanded to judicial custody even for a single day before trial or at the time of trial, therefore, Section 428 Cr.P.C was not invoked.
C.C.No.765 of 2015 2 Dt. 28-03-2024
This case coming up before me on this day for fnal hearing in the presence of Sri Chakilam Upender, Counsel for the Complainant and of Sri
M.Sadashivudu, Counsel for the Accused and having stood over for determination till this day, this Court delivered the following:
JUDGMENT
01. This is a complaint fled under Sec.200 Cr.P.C., by Purushotham
Mundada, the Complainant against Accused-Pollam Shailaja for the offence punishable under section 138 of the Negotiable Instruments Act, 1881 (hereinafter be referred to as N.I. Act).
02. The brief facts of the Complaint:- 2.1. The Complainant and the Accused are known to each other through her brother, and out of such acquaintance, the Accused approached the
Complainant with a request to arrange an amount of Rs.25,00,000/- for her necessities agreeing to repay when ever the complainant demands. On 21-10- 2012 the Complainant paid an amount of Rs.8,00,000/- and the Accused had executed a demand promissory note and receipt in favour of the Complainant.
On 22-10-2012 the Accused received an amount of Rs.8,00,000/- from
Complainant by executing demand promissory note and receipt in favour of the
Complainant and on 27-10-2012 the Accused received another Rs.9,00,000/- by executing a demand promissory note and receipt in favour of the Complainant.
Totally the Accused received an amount of Rs.25,00,000/-, but failed to repay the same to the Complainant.
2.2. The Complainant further stated that, after several demands the
Accused had issued two post dated cheques bearing Nos.651591 & 651592,
C.C.No.765 of 2015 3 Dt. 28-03-2024 dt.01-03-2013 for Rs.5,00,000/- & Rs.20,00,000/- respectively, drawn on Karur
Vyshya Bank Ltd., Hanamkonda, Warangal to dishcharge principal liability amount with an assurance that the above cheques will be honoured on presentation. On assurance of the Accuesd, the Complainant had presented the said cheques for collection on 08-04-2013 through his bank i.e., The A.P.Mahesh
Co-operative Bank, Station Road, Warangal and the same were dishonoured and returned through cheque return memos stating “Funds Insufcientn on 08-04- 2013. The Complainant submitted that, without maintaining sufcient funds in account, the Accused had deliberately issued the said cheques.
2.3. On 19-04-2013, the Complainant had issued a legal notice to the
Accused, and on 22-04-2013 the same was received by the Accused, but he neither paid the dishonured cheques amount nor replied to the legal notice, dt.19-04-2013. Hence, the complaint by the Complainant.
03. The Complainant fled sworn statement incorporating the contents as mentioned by him in his complaint.
04.Upon consideration of the complaint and sworn statement on 11-12-2015 the cognizance as per Sec.190 (1)(a) of Cr.P .C., for the offence punishable under section 138 of NI Act, 1881 was taken against the Accused by the then court and the Accused was summoned as per Sec.204 Cr.P.C. On appearance of the
Accused, furnished the copies of the case under Section 207 of Criminal
Procedure Code, and the Accused was examined under Section 251 of Criminal
Procedure Code where in the substance of accusation leveled against the
Accused was explained in Telugu for which the Accused understood the same and pleaded not guilty and claimed to be tried.
C.C.No.765 of 2015 4 Dt. 28-03-2024
05. The Complainant in order to prove his case got himself examined as
PW.1 and he fled his examination in chief afdavit incorporating the contents as stated in the complaint. Therefore, narration of those facts over again will not serve any useful purpose. The Complainant got marked Exhibits i.e.,
Ex.P1 to Ex.P5 as documentary evidence. Ex.P1 is the Original Cheuqe bearing
No.651591, dt.01-03-2013, Ex.P2 is the Original Cheque bearing NO.651592, dt.01-03-2013, Ex.P3 is the (02) Cheque return memos, Ex.P4 is the Ofce copy of legal notice, dt.19-04-2013, Ex.P5 is the Postal Receipt, dt.20-04-2013 5.1. During the cross examination of PW.1 stated that, he do commission business. One Hemchander Reddy, who is the brother of the Accused is his friend and he used to work at his friend’s ofce. He admitted that, he have not fled any promissory note or any proof to show that he gave an amount of
Rs.25,00,000/- to the Accused. He stated that, the Accused had executed promissory note on the alleged date and again took back the same and gave two cheques to him. He stated that, he will submit his I.T. returns and he has pan card vide pan card No.ABZEEM2963 and he do not know in which year he obtained the same. He stated that, he do not know the monthly salary details of the Accused and what was the necessity of the Accused to borrow said amount as he have acquaintance with her husband. He stated that, he have not fled any civil case against the Accused. He stated that, he is not running a registered commission business and in the year, 2014 got registered his business in the name Sunitha Enterprises.
5.2.He denied that, he have no fnancial capacity to lend such huge amount and that he have not received any consideration under foot of Ex.P1 and dates mentioned by him in the complaint and chief afdavit are created for
C.C.No.765 of 2015 5 Dt. 28-03-2024 the purpose of this case. He denied that, the Accused did not issue Ex.P1 &
P2/cheques and she did not received legal notice. He denied that, as he have disputes with the brother of the Accused he fled false case against the Accused to harass her and if there is any consideration passed between him and the accused, he ought to have fled the civil suit.
06.Ladda Rajender, got examined as PW.2 deposing that in the second week of February, 2013 when he along with PW.1 were present near Mundada
Bhavan, the Accused came there and in his presence she requested PW.1 that she is not in a position to pay any interest and agreed to pay the principal amount and handed over two post dated cheques of Rs.5,00,000/- &
Rs.20,00,000/- to PW.1 and took three promissory notes from the possession of
PW.1. He saw the promissory notes were executed by Accused in favour of
PW.1 out of which he came to know the Accused name.
6.1. During cross examination of PW.2 stated that, he cannot state annual income of PW.1 and that PW.1 is an income tax assesee and used to fle
IT returns every year. He stated that, PW.1 is his client used to invest in shares and dividends are refected in his income tax. He stated that, he have seen
Accused only once and he do not know other details of the Accused. He denied that, he is deposing falsely at the instance of PW.1 as he is his client in his share business. He denied that, Accused did not execute any cheques in favour of
PW.1 and PW.1 have no fnancial capacity to give amount to the Accused. He further denied all the suggestions made to him.
07. After completion of Complainant evidence, Accused was examined under
Sec.313 Criminal Procedure Code,1973 for which she denied the incriminating
C.C.No.765 of 2015 6 Dt. 28-03-2024 oral and documentary evidence deposed against her and reported defence evidence. Inspite of ample opportunity, the Accused reported no defence evidence. Hence, the defence evidence was closed.
08. Heard the oral arguments on both sides. Perused the record.
8.1. The counsel for the Complainant has argued on the same lines based on the complaint and the chief afdavit fled and that the complaint fled by the
Complainant is within limitation. He stated that, no consideration passed on receiving of post dated cheques and the Accused never stated that, she have not executed promissory notes, not denied about the post dated cheques and also not denied the signatures on Ex.P1 & P2, not denied the Ex.P4/Legal Notice and track report of service of Legal Notice fled, and the Accused failed to enter into witness box to disprove the allegations made against her. Hence, presumption under section 139 of N.I.Act can be drawn in favour of the
Complainant as there were no crucial suggestions were made out by the
Accused counsel during the cross examination. Therefore, the Accused is held punishable under section 138 of N.I.Act with double the cheque amounts as compensation. The counsel for the Complainant in support of arguments relied upon the following citation:
(i) The judgment of Hon’ble Supreme Court in Rohitbhai Jivanlal Patel
Vs. State of Gujarat & Anr., in AIR 2019 SC 1876, held that, ‘Rule of presumption of innocence of accused, cannot be applied with same rigour to offence under section 138, pearticularly where presumption is drawn that holder received the cheque for discharge, the debt or liability. All basic iningredients of section 138, 118, 139 are apparent on face of record.
C.C.No.765 of 2015 7 Dt. 28-03-2024
Therefore, it is required to be presumed that cheques in question were drawn for consideration and complainant received it in discharge of an existing debt.
On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non- existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasized that though there may not be sufcient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfll the requirements of rebuttal as envisaged under Section 118 and 139 of the NI Act.’
(ii) The Judgment of Hon’ble Supreme Court in APS Forex Services Pvt.,
Ltd., Vs. Shakti International Fashion Linkers & Ors, in 2020 0 Supreme (SC)
155, held that, ‘Issuance of cheque and signature thereon not disputed by
Accused. Transaction between parties also not disputed. Presumption of a legally enforceable debt or liability under section 139. After dishonour of earlier cheques accused/Respondents again issuing consolidated cheque.
Dishonoured for “stop Paymentn. Courts wrongly acquitting the Accused/
Respondents. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifes a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since
C.C.No.765 of 2015 8 Dt. 28-03-2024 the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confned to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof.
In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in absence of further evidence to rebut the presumption and more particularly the cheque in question was issued for the second time, after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists legally enforceable debt or liability as per Section 139 of the N.I. Act. It appears that both, the Learned Trial Court as well as the High Court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of N.I. Act. As observed above,
Section 139 of the Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence.’
(iii) The judgment of High Court of Calcutta in Radhamani India Limited
Vs. Basukinath Food Processors Lts. & Anr., in C.R.A.No.130/2021, held that, ‘
Section 142 lays down the circumstances when court can take
C.C.No.765 of 2015 9 Dt. 28-03-2024 cognizance of offence under Section 138 of the Negotiable Instruments
Act. According to Section 142 (1) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque.
Clause (b) of sub-Section 1 of Section 142 states that such complaint is made within one month of the date on which the cause of action arises under clause
(c) of the proviso to section 138. Thus, cause of action for lodging a complaint under Section 138 of the Negotiable Instruments Act arises when the drawer of cheque fails to make payment 16 of the said amount of money to the payee within 15 days of the receipt of said notice. During trial, the complainant proved the copy of notice, postal receipt and postal track report in respect of respondent No.1/company. On perusal of the copy of notice (Exhibit-5) it appears that the name and address of the respondent/company were correctly written on it. The postal track report shows that the said notice was duly served upon the respondent No.1/company on 12th April, 2013.’
(iv) The matters under article 227 Nio.7011 of 2023 in Top Filing Point
Proprietor Rakesh Agarwal Vs. State of U.P. & Anr., held that, ‘The main contention of the petitioner is that the complainant could not show, by producing any evidence that in fact the notice was served on him, therefore, the essential condition for taking cognizance, as provided under section 138 clause(c) read with section 142(1)(b) of the NI Act was not fulflled. From perusal of the order passed in revision, it is noticed that the learned court of revision took up the above contention and observed that indeed there was no mention of any specifc date, as regard service of demand notice, however it was found that there was track consignment paper on record, which belied the
C.C.No.765 of 2015 10 Dt. 28-03-2024 submission of the revisionist.. The date of the receipt of notice is very much important but it not necessary that any particular date as regard receipt of demand notice should mandatorily be mentioned in the complaint itself. The day of receipt of demand notice can very will be inferred from the documents/ evidence on record.’ 8.2.The counsel for the Accused orally argued that, except the content in the complaint, there is no evidence in favour lead by the complainant. The
Counsel stated that, there is no legally enforceable debt and the Complainant failed to state the date on which he received post dated cheques, he stated that, there is no attestation by bank and no digital signature. The complainant failed to fle any documentary proof or promissory notes to show the transaction in between PW.1 and the Accused. In Ex.P4/demand notice, there is no mention that the Accused took back the promissory notes and not made any demand to return back the said promissory notes. The counsel stated that, there is a delay of 49 days in fling the present case by the Complainant as
Ex.P4/Legal notice date in 22-04-2013. The counsel stated that, the counsel for the complainant has orally submitted that Ex.P4 was served on the Accused.
The counsel argued that, unless contra is proved, under section 139 of N.I.Act does not arise. The counsel stated that, the Complainant failed to fle civil suit against the complaint for recovery of money and the complainant has failed to show his fnancial capacity by fling IT returns or his bank statement. The
Counsel submitted that, the Accused need not fle any evidence or step into the witness box, as she can prove her case with the material on record. The counsel
for the Accused in support of arguments relied upon the following citations:
C.C.No.765 of 2015 11 Dt. 28-03-2024
(i) The judgment of High Court for A.P., in G.Ashok Kumar Goud Vs. P.
Anjili Bai & Anr., 2012 (2) ALD (Crl.) 126 AP, held that, ‘Presumption under section 139 of N.I.Act is rebuttal by accused need not be by adducing any positive evidence. It is enough on his part to show circumstances in his favour from material available on record. Standard of proof required is that of preponderance of probabilities. From the ratio laid down by the Supreme Court in the reportable judgments above referred, it is therefore obvious that a presumption which has to be raised by Courts, as required u/s 139 of the Act in favour of the complainant need not be rebutted by the accused by adducing any positive evidence. It is enough on his part to show the circumstances in his favour from the material available on record and the standard of proof required is that of the preponderance of probabilities. Therefore, the contention advanced on behalf of the complainant that there is no positive evidence adduced by the frst respondent/accused to disprove the case of the complainant has no foundation in law. The appellant though an income tax assessee failed to fle any income tax returns nor did he produce any books of accounts. The frst respondent issued legal notice Ex.D-2 indicating therein the circumstances under which the blank cheque and the promissory note were obtained and calling upon the appellant to return those documents. But, in spite of receiving the said notice, the appellant presented the cheque for encashment. The appellant was unable to produce any document showing that the frst respondentss husband borrowed from him an amount of Rs.4 lakhs.
From all these materials available on record, the frst respondent could be able to rebut the presumption available to the appellant u/s 139 of the Act and the learned trial Court rightly held that the frst respondent could be able to rebut
C.C.No.765 of 2015 12 Dt. 28-03-2024 the presumption as aforesaid available in favour of the appellant. Even if it is considered that from the facts and evidence two views are possible, this Court while exercising appellate jurisdiction against the judgment of acquittal shall not interfere with the fndings recorded by the trial Court. The judgment rendered by the learned trial Court being based on evidence and not being perverse shall not be interfered with in this appeal against acquittal.’
(ii) The judgment of Madras High Court in P.Krishnaswamy vs.Delta Knit
Wearables, 2012(1) Bankmann 599, held that, ‘When it is specifc case of
Respondents that a sum of Rs.3,00,000/- was borrowed by all accused, it is for complainant to positively prove the same beyond any doubt. Complainant has failed to do so. By all means, there was no liability at all on part of the company to pay any amount to complainant. Complainant has failed to discharge its initial burden to prove that there was legally enforceable liability. Prosecution has failed to prove that cheque was duly executed in favour of complainant.
(iii) The judgment of Rajasthan High Court in Kanahiya Lal Ghamandi Lal vs. Subhash, 2012 0 Supreme (Raj) 229, held that, ‘Presumption in favour of holder of cheque is rebuttal presumption. Proof of a fact may require the production of certain documentary evidence. Where the relevant evidence is withhold by the Plaintiff, section 114 Evidence Act enable the Court to draw a presumption that, if produced the said accounts would be unfaouvrable to the plaintiff. Adverse presumption under section 114 of the Evidence Act drawn against the appellant. Presumption under section 139 of the Act of 1881 is rebutted.’
C.C.No.765 of 2015 13 Dt. 28-03-2024
(iv) The Judgment of High court of Karnataka in A.U.Narayana Gowda
Vs. K.R.Some Gowda, in Crl.Appeal No.1036 of 2011, held that, ‘The complainant has to establish the existence of legally enforceable debt or the transaction between the accused and the complainant which led the accused to issue the cheque in question. It is true that whenever a cheque is issued, a presumption has to be drawn that it is issued towards discharge of debt. But at the same time, it is for the complainant to establish the existence of legally enforceable debt. It is equally true that the burden of proving that the cheque was not issued for any debt or liability is on the accused, but the said burden is equivalent burden that has to be discharged by plaintiff or defendant in a civil case i.e., preponderance of probability. The accused need not lead his evidence in order to discharge the said burden. The accused can discharge the burden either from the cross-examination or from the evidence placed on record by the complainant himself.’
(v) The judgment of High Court of Karnataka in Janardhan Heble Vs.
Anand Kanchan, in Crl.Appeal No.870/2006 (A), held that, ‘Section 269(ss) of the Income Tax Act directs that no amount of loan exceeding Rs.20,000/- shall be paid or received except through an account payee cheque or Demand Draft.
The loan transaction as sought to be made out by the complainant is highly doubtful. He had no fnancial capacity to land. In the absence of any documentary evidence to evidence the lending, in my opinion, the learned
Magistrate is justifed in holding that the statutory presumption under section
139 stood rebutted. The fnding recorded by learned Magistrate are sound and reasonable having regard to the evidence on record.’
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(vi) The judgment of High Court of Karnataka in Meena K. Vs. N.R.Ravi
Kumar, Crl.R.P.No.1150/2008, held that, ‘The entire theory put forward by the complainant cannot be believed and the Accused has place enough material to rebut the initial presumption in favour of the complainant. Both the courts below lost sight of the defence evidence place and did not take note of Ex.D1- the notebook. As such, the fndings recorded are perverse in nature and contrary to the evidence on record. Interference is inevitable.’
(vii) The judgment of High Court of Karnataka in Shivalingappa Vs.
Basagonda, in Crl.Appeal No.2637 of 2009, held that, ‘ it must be noticed that action under Section 138 of the Act is an action under criminal law and on proof of guilt, the drawer will be visited with punishment upto two years of imprisonment. Therefore, under the common criminal law, the burden rests on the complainant to establish the charge with acceptable evidence and it is only then the burden will shift upon the accused to rebut it. The presumption under
Section 139 of the Act is rebuttable presumption. If the accused caused a dent in the case of complainant about the transaction of loan itself and if that accused could succeed by eliciting anything by his independent evidence or could point out from the evidence of the complainant itself, that there is a doubt about the transaction, then that would be sufcient to uphold his evidence.’
(viii) The judgment of Gujarat High Court in Rajendra Kumar @
Rajesh Kumar Balkishan Agarwal Vs. State of Gujarat, 2012 1 Crimes
(HC) 500, held that, ‘It is also observed by the learned trial Judge that cheque return memo and debit memo produced on record by the original complainant
C.C.No.765 of 2015 15 Dt. 28-03-2024 does not bear stamp of any Bank and therefore, as per Section 146 of the Act, the said documentary evidence cannot be considered.’ 8.3. Hence, the Accused counsel stated that the above citations are applicable to the facts of the case and upon material evidence available on record it shows that complaint is false and accused may be acquitted accordingly by dismissing the complaint with costs.
8.4.The counsel for the complainant gave reply arguments submitting that, the arguments of the accused are against the pleadings and the complainant categorically elicited the facts through his evidence and stated that the legal notice was received by the Accused and that the complaint was fled accordingly. The citations fled by the Accused counsel are not applicable to the present case and no relevant questions were put forth by the Accused counsel, as such the burden has not shifted in this case by rebutting the evidence. Therefore, counsel stated that, all the ingredients of section 138 of
N.I.Act were proved by the complainant and the Accused did not dispute the same. The counsel submitted that, there is no rebuttable evidence by the
Accused during the cross examination and no defence made out how the cheques went into hands of the complainant and the Accused did not deny evidence of the PW.2.
9. Now the point for determination is:
1) Whether the impugned cheques were issued towards discharge of legally enforceable debt or liability?
2) Whether the complainant has proved the guilt of the Accused for
the ofence under section 138 of the Negotiable Instrument Act, 1881
beyond all reasonable doubt?
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10. POINT 1 & 2:
10.1. In this case the accusation made against the Accused is under section 138 of the Negotiable Instruments Act, 1881. The said section deals with the dishonour of the cheque for insufciency etc., of funds in the account.
A drawer of a dishonoured cheque shall be deemed to have committed an offence and shall, without prejudice to any other provision of the N.I Act, 1881 be punished with imprisonment for a term which may extend to two years, or with fne which may extend to twice the amount of the cheque or with both.
10.2. To make out an offence under the said section one of the main ingredients is that the cheque is returned unpaid because of the amount available in that account is insufcient for making the payment of the cheque.
The cheque may be returned by the Bank unpaid for various reasons. But the parliament in its wisdom has confned the offence referred to in section 138 of the Act only to bouncing of the cheque on the ground of inadequate balance in the account concerned.
11.To attract Section 138 of NI Act can be completed only with concatenation of numbers of acts.
1. Drawing of cheque.
2. Presentation of cheque to the bank
3. Returning the cheque unpaid by the bank
4. Giving notice in writing to the drawer of the cheque demanding him to pay the cheque amount.
5. Failure of drawer to make payment within 15 days of receipt of the notice.
11.1. The Complainant must prove that the cheques in question were issued by the Accused and same were presented by the Complainant for
C.C.No.765 of 2015 17 Dt. 28-03-2024 encashment within three months limitation and upon such presentation the cheque must return unpaid by the banker of the Accused due to insufcient funds in the account of the Accused and thereby, the Complainant on receiving return memo by the bank authorities shall issue legal notice to the Accused within 30 days from the date of return memo and thereby the Accused must give a reply notice within 15 days from the date of receipt of legal notice and if the Accused failed to give the reply notice then the Complainant must fle the complaint within one month from the date of lapse of 15 days where the cause of action arose. Here, the Complainant had fled the complaint after delay of 03 days and he fled petition under section 142(b) of N.I.Act, to condone the delay and the same was allowed by the then court vide Crl.M.P.No.1049/2013. The statutory time limits as mentioned by the Negotiable Instrument Act is complied by the Complainant. In order to bring home the guilt of the Accused, the Complainant proved the statutory time limits of the cheque and he must prove the debt is a legally enforceable debt.
11.2. In the present case,PW.1/Complainant reiterated contents of the complaint and the evidence of PW.1 coupled with Ex.P1 to P5 would prima facie prove that the accused borrowed the amount of Rs.8,00,000/- on 21-10-2012,
Rs.8,00,000/- on 22-10-2012 & Rs.9,00,000/- on 27-10-2012 and issued Ex.P1 for
Rs.5,00,000/- & Ex.P2 for Rs.20,00,000/- towards discharge of the debt, and shown that the cheque/Ex.P1 & P2 were returned by the bank stating that it was dishonoured for want of sufcient funds through Ex.P3. Ex.P4 & Ex.P5 would show that a legal notice had been issued and it was received by the Accused on 22-04-2013 which can be clearly seen from the track report fled which resembles the postal receipt number on the track report fled. Nothing has
C.C.No.765 of 2015 18 Dt. 28-03-2024 been elicited by cross-examining PW.1 to discredit his testimony. Hence, the presumption under section 139 of the N.I. Act comes into the play and the court shall presume that the Ex.P1 & Ex.P2 were issued towards discharge of legally enforceable debt and till it was disproved by the accused the presumption will run in force in favour of PW1.
11.3. The Accused had not disputed the issuance of the questioned cheques i.e., Ex.P1 & P2 to PW.1, and took a mere plea that PW.1 failed to fle any documentary proof or promissory notes to prove the transactions took place in between Accused and PW.1, and the citations relied by the Accused is not binding as there is no rebuttable defence evidence shown by the Accused and mere plea with regard to the other cases sighted in arguments are not tenable as no specifc suggestion was made to PW.1 during cross examination.
The Section 139 of Negotiable Instrument Act provides for a presumption envisaged under section 118 of N.I. Act that holder of cheque, received the cheque for consideration in the nature referred to in Section 138 of NI Act for discharge in whole or in part of any debt or other liability. Further the Accused has failed to adduce any probable defence to show that she had not received money from the PW.1 and also failed to adduce rebuttal evidence to discharge the burden laid upon her and did not place any iota of evidence under what circumstances the cheques/Ex.P1 & P2 were issued to PW.1.
12.This Court opines that in the present case, the Complainant/PW.1 by virtue of Ex.P1 to Ex.P5 and PW.2 evidence could prove all the concomitants of
Sec.138 of NI Act and therefore, the presumption U/Sec.139 of NI Act would come into play. The substratum of the defence evidence is that there was
C.C.No.765 of 2015 19 Dt. 28-03-2024 no transaction on the alleged dates in between Accused & PW.1 and therefore, there is no legally enforceable debt against the Accused. It was contended that to invoke liability under section 138 of NI Act, existence of legally enforceable debt is sine-qua-non. Once Complainant could discharge the initial burden, the onus of proof would shift to the Accused. In the present case, by exhibiting Ex.P1 to Ex.P5, the Complainant could prove that Accused, had issued a cheques, which would fall within the meaning of Section 138 of
NI Act. Accused has not denied the issuance of cheques. Accused has not taken a plea that Ex.P1 & P2 were illegally secured and the signature on the said cheques were not of Accused. However, Accused could not elicit the circumstances as to how the cheques went into the hands of Complainant and moreover the Complainant has admitted during his cross examination that the
Ex.P1 & P2 were handed over to him by the Accused by taking back the promissory notes executed which were executed by the Accused during the intervals of the hand loan received on the said dates. The Accused could not make out a probable defence of existence of legally enforceable debt in between PW.1 & the Accused.
13.In the case on hand, the Accused had not disputed the issuance of cheque i.e., Ex.P1 & P2 and the signatures on them. The Accused had neither step into the witness box nor had adduced any evidence nor could make out any probable defence from the materials adduced by the Complainant.
Moreover, PW.1 evidence is corroborated by PW.2, who supported the case of the PW.1 by stating that he was present when the Accused handed over the
Ex.P1 & P2 and took away the promissory notes.The Accused could not explain how the cheques went into the hands of Complainant. No case was put
C.C.No.765 of 2015 20 Dt. 28-03-2024 forth by the Accused by way of suggestion to the Complainant that the
Accused was totally a stranger and the impugned cheque was either lost or stolen.Moreover, the citations referred by the Accused are not ftting to the present case facts and circumstances. As it is a case under section 138 of
Negotiable Instruments Act, alleged cheques/Ex.P1 & Ex.P2 were not disputed in the present case by the Accused. Hence, a presumption under section 118 & 139 of Negotiable Instruments Act can be drawn infavour of PW.1/Complainant and when the Accused was examined under section 313 Cr.P.C, she had not taken any plea that the cheques were forged. She could not demystify the incriminating circumstances that were appearing against her.
14.In this regard, this court relied on the following judgments:
(i) The Hon’ble Apex Court in Rangappa vs Sri Mohan reported in (2010) 11 SCC 577 it was held that, “Once the issuance of the cheque is admitted or proved, the trial court is duly bound to raise the presumption that the dishnoured cheque placed before it was indeed issued in discharge of a legally enforceable debt or liability of the amount mentioned there in. If the
Accused is able to raise a probable defence which creates doubt about the existence of legally enforceable debt or liability the prosecution can fail.
The Accused can rely on the materials submitted by the Complainant in order to raise such defence and it is conceivable that in some cases the
Accused may not need to adduce evidence of his or her own.
“A presumption available under Section 139 of N.I. Act is rebuttable presumption and such presumption can be rebutted by raising any defence. There can be no doubt that there is initial presumption in favour of the complainant and such presumption can be rebutted in view of reverse onus by
C.C.No.765 of 2015 21 Dt. 28-03-2024 adducing independent evidence or by eliciting something in the cross-examination of the complainant.”
(ii) The Hon’ble Apex Court in Rajesh Jain vs Ajay Singh , 2023 Cri.L.R.
(SC) 1201, held that, “Court will necessarily presume that the cheque had been issued towards discharge of a legally enforceable debt/liability in two circumstances, frstly when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that cheque was issued/executed in his favour by the “drawern & under Negotiable
Instruments Act, 1881 according to section 138 & 139, Dishnour of cheque, once presumption under section139 was given effect to, Courts should proceed on premise that cheque was, indeed, issued in discharge of a debt/liability. Entire focus would then necessarily have to shift on case set up by Accused, since activation of presumption has effect of shifting evidential burden on accused.
Nature of inquiry would then be to see whether accused has discharged his onus of rebutting presumption, if he failed to do so, Court can straightaway proceed to convict him, subject to satisfaction of other ingredients of section 138. If court fnds that evidential burden places on accused discharged, complainant would be expected to prove fact independently, without taking aid of presumption. No defense evidence has been led on behalf of the Accusedn
15.In the light of discussion supra, this court opines that the Complainant could discharge his initial burden that was cast on him, by his evidence as
PW.1 which is corroborating along with the documentary evidence Ex.P1 to
Ex.P5 & PW.2 evidence, and the material on record can be considered and the
Accused could not rebut the presumption under section 139 of the N.I. Act.
C.C.No.765 of 2015 22 Dt. 28-03-2024
Therefore, it can be clearly seen that the Complainant has established his case against the Accused and the Accused is found guilty for the offence under section 138 of the Negotiable Instrument Act, 1881.
16.In the result, the Accused is found guilty for the offence under section 138 of The Negotiable Instruments Act, 1881 and accordingly the Accused is convicted under section 255(2) Cr.P.C.
Sd/-
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17. On hearing the Accused on the quantum of sentence, the Accused denied the offence and requested time for preferring Appeal.
18.Upon hearing the Accused on the quantum of sentence, the following sentence is passed:-
The Hon’ble Apex Court in its expression between Somnath Sarkar vs Utpal Basu Mallick and another in AIR 2014 SC 771 held that a criminal
Court is competent under section 138 of NI Act to levy fne up to twice the cheque amount and direct payment of such amount as compensation by way of restitution in regard to the loss on account of dishonour of cheque under section 357(1)(b) of Cr.P.C.
Further the proposition is laid down in the following judgments in
The Hon’ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh following the dictum of Somnath
Sarkar’s case awarded compensation out of the fne amount imposed in
Omprakash Agarwal vs. Khaja Krishna Prasad and another reported in
2015(1) ALT Crl. 68, in Appolo Tyres Limited vs. H.M.Tyres and another
C.C.No.765 of 2015 23 Dt. 28-03-2024
reported in 2014 Law Suit Hyderabad 184, S.Ravinder vs Bhasker Teja
and others reported in 2016(1) ALT Crl. 125 andin B.Raghunandan Reddy
vs. Rajashekar Reddy and another reported in 2015 (1) ALD Crl. 861.
19.The cheque amount in this case is Rs.25,00,000 /- and twice the amount of cheque would come to Rs.50,00,000/- and the court can impose fne on the Accused up to Rs.50,00,000 /-.
20.Upon Considering the facts and circumstances and also the Judicial
Precedents, Accused is sentenced to undergo Simple Imprisonment for a period of Six (6) months and also to pay fne of Rs.30,10,000/- and in default of payment the Accused shall undergo simple imprisonment for a period of (2) months for the offence under section 138 of NI Act. Out of the fne amount of
Rs.30,10,000/-, Rs.10,000/- to be paid on the date of Judgment and the same shall go to the State and the remaining fne amount of Rs.30,00,000/- shall be paid to the Complainant as compensation under section 357(1)(b) of Cr.P.C., within three (03) months from the date of judgment. A free copy of judgment shall be given to the Accused as per Section 363 Cr.P.C r/w Rule 72 of Criminal
Rules of Practice and Circular Orders,1990. As the Accused was not remanded to judicial custody even for a single day before trial or at the time of trial, therefore, Section 428 of Cr.P.C was not invoked.
(Typed by the Stenographer to my dictation, corrected and pronounced by me in the open court on this the 28th day of March, 2024)
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C.C.No.765 of 2015 24 Dt. 28-03-2024
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Prosecution: For Defence:
PW.1: Purushotham Mundada - None - PW.2: Ladda Rajender
Exhibits Marked
For Prosecution: For Defence:
Ex.P1: Original Cheque bearing No.651591, dt.01-03-2013, -Nil-
Ex.P2: Original Cheque bearing No. 651592, dt.01-03-2013,
Ex.P3: Cheque return memos (02),
Ex.P4: Ofce copy of legal notice, dt.19-04-2013,
Ex.P5: Postal receipt, dt.20-04-2013,
Mos.Marked:
-Nil-
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