Ms G Spandana

1 Fair Judgment in CC-NI No.419 of 2023

IN THE COURT OF THE VII JUDICIAL MAGISTRATE OF FIRST CLASS,

MANORANJAN COMPLEX, NAMPALLY, HYDERABAD

PRESENT: Kum.Goolla Spandana, VII Judicial Magistrate of First Class, Hyderabad

Wednesday, 27 th Day of November, 2024

CC-NI.No.419 of 2023

(STC.4655 of 2022)

BETWEEN:

Sri. Dilip Gunderao Atre, S/o. Gunderrao Dattatreya Rao Atre, Aged about 67 years, Occ : Retired Raily Service, Residing in Flat No.404, Thakur Residency,

Barkatpura, Hyderabad – 500027. ... Complainant

AND

Smt. G.S. Indira Anad, W/o. G.S. Bhaskar Anand, Aged about 45 years, Occ : Private Employee, Residing at H.No.25-40/69, Plot No.42, Anantha Saraswathi Nagar, Eash Anandbagh, Malkajgiri,

Hyderabad – 500047. ... Accused.

Offence Under Section 138 of Negotiable Instrument Act

This case is coming up before me for a final hearing on presence of

Sri.T.Sanjay.K.Singh, Counsel for the Complainant and of Sri.G.Abhijeeth and others, Counsel for Accused and having heard and having stood over for consideration, this court delivered the following:

::J U D G M E N T::

1.This is a private complaint filed against the above named accused for the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter be referred to as N.I.Act).

The complainant’s case in brief is as follows:

2. The Complainant submits that he had sold one immovable property i.e.

Flat No.402, Municipal No.25-40/16/4A-A/402 on 4th Floor of Residential

Complex Sai krupa Homes situated at Saraswati Nagar, Medchal Malkajgiri

Dist vide document No.1362/2022 dt.18.02.2022 duly executed in favour of 2 Fair Judgment in CC-NI No.419 of 2023 the accused for a sale consideration of Rs.29,75,000/- and registered in the sub-registrar office, Complainant had also sold the movables to the accused i.e., furniture consisting of 2 sofa sets, refrigerator, 2 almirahas, dining table with chairs and diwan set which was in the schedule property belonging to the complainant before sale of the immovable property for an agreed amount of

Rs.1,00,000/-. As the accused had no funds and issued an account payee post-dated cheque bearing No.570327 for Rs.1,00,000/- dt.29.05.2022 drawn on Punjab National Bank, Malkajgiri branch, Secunderabad in favour of

Complainant towards discharge of the legally enforceable debt and liability, complainant believing the version of the accused in good faith accepted the post dated cheque from the accused towards the movables purchased. The said cheque presented in the complainant‘s bank for encashment i.e.,Canara

Bank Kachiguda Branch, Hyderabad but to utter surprise and shock of the complainant the aforesaid cheque was dishonoured in the complainant’s bank with an endoresement “Funds Insufficient” vide cheque return memo dt.01.06.2022. The accused had issued the said cheque despite her knowledge that she had no funds in her bank account and she is liable to be punished under criminal law of dishonour of cheque issue by you in discharge of accused debt to the complainant. Therefore the complainant got issued a legal notice to accused through his counsel on 09-06-2022 to the accused calling upon the accused to pay the dishonoured cheques amount

Rs.1,00,000/- within 15 days from the date of receipt of the notice. The accused had received the said notice on 10.06.2022 and got issued a reply notice dt.14.06.2022 denying the purchase of movables with a malafide intention and admitted the issuance of the cheque. Thus the accused is deemed to have been committed an offence under Sec.138 of Negotiable

Instruments Act. Hence this Complaint.

3 Fair Judgment in CC-NI No.419 of 2023

3. The Complainant filed the complaint before this Court on 18-07-2022.

Initially, this case was registered as STC-NI.No.4655/2022. Upon the appearance of the accused, she was provided with a copy of the complaint and other relevant documents under Section 207 of the Code of Criminal

Procedure (Cr.P.C.). The accused was examined under Section 251 of the

Cr.P.C., where she denied the accusations, pleaded not guilty, and claimed to be tried for the said offense.

4. To prove the guilt of the accused, the complainant examined as PW.1 and got marked Ex.P1 to Ex.P7 as documentary evidence. “Ex.P1 is the

Cheque bearing No.570327 Dt.29.05.2022 for Rs.1,00,000/-, Ex.P2 is the

Cheque Return Memo dt.01.06.2022, Ex.P3 is the office copy of legal notice dt.09.06.2022, Ex.P4 is the Postal receipt dt.09.06.2022, Ex.P5 is the acknowledgment dt.10.06.2022 , Ex.P6 is the reply notice dt.14.06.2022.”

5. PW1 was cross-examined by the learned counsel for the Accused. For brevity and to avoid repetition, the relevant aspects of the cross-examination are discussed while appreciating the evidence.

6.After the closure of the complainant’s evidence, the accused is examined U/Sec.313 Cr.P.C r/w 281 of Cr.P.C. The incriminating evidence appeared against her deposed by PW.1 was explained to her for which accused denied the truthfulness of evidence and reported that she has defense evidence and examined her husband as DW.1 and examined herself examined as DW2, one person by named P.S.V.Naresh was examined as DW3.On behalf of the accused marked Ex.D1 and Ex.D2 marked. Ex.D1 is Original sale deed

dt. 18.02.2022 and building permit order dt.16.05.2018, Ex.D2 is the copy of

orders in W.P.No.2788/2022 dt.21.01.2022. They were cross-examined by the learned counsel for the complainant. At this stage, as the case was being tried 4 Fair Judgment in CC-NI No.419 of 2023 in a detailed manner and not summarily, this court converted the case from

STC.NI to CC.NI and numbered as CC-NI.No.419 of 2023. During the cross examination of DW1, Ex.P7 is the Sale deed dt.18.02.2022 was marked on confrontation of the document. For brevity and to avoid repetition, the relevant aspects of the cross-examination are discussed while appreciating the evidence. After the closure of the accused’s evidence, the matter posted for arguments.

7. Heard the arguments on behalf of both sides and perused the record.

After carefully hearing the arguments presented by both sides, the following points arise for determination:

Now the point for determination is that

I. Whether the complainant has complied with the essential ingredients of Section 138 of NI Act ?

II. Whether the accused rebutted the presumption under section 118 & 139 of NI Act ?

III. Whether the complainant could establish that the cheque Ex.P1 was issued for legal enforceable debt and that the accused committed an offence under section 138 of NI Act ?

IV. To what order ?

8. Before adjudicating the points for determination whether the cheque was issued in discharge of any existing debt or liability by the accused in favour of the complainant and whether the accused could rebut the presumption available to the complainant under the Act. It would fit thing to draw attention on section 138,139 and 118 of NI Act for better appreciation of the facts of the case.

5 Fair Judgment in CC-NI No.419 of 2023

Conditions precedent for constituting an offence under S. 138 of NI Act

9.There are five distinct conditions precedent, which must be satisfied

before the dishonour of a cheque can constitute an offence and become

punishable.

(i) The cheque ought to have been presented to the bank within a period 6 months (3 months as per RBI vide Circular RBI/2011- 12/251 DBOD AML BC No. 47/14.01.001/2011-12, dated 4-11- 2011) from the date on which it is drawn or within the period of its validity, whichever is earlier.

(ii) That the cheque was drawn from the account of the accused bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt and

(iii) The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;

(iv) The payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.

(v) The drawer of such a cheque should have failed to make payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within 15 days of the receipt of the said notice.

The proviso appended of legal requirements before a complaint or a petition can be acted upon by a court of law.

10. It is only upon the satisfaction of all the five conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and

(c) along with the conditions to be fulfilled as stipulated under Section 142 NI

Act to take the cognizance against the offence under Section 138.

6 Fair Judgment in CC-NI No.419 of 2023

Presumptions

11. The Negotiable Instrument Act contains provisions raising presumptions as regards the negotiable instruments under section 118(a) of the Act as also under section 139 of Negotiable Instrument Act. The said presumptions are rebuttal. Whether the presumption is rebutted or not would depend upon facts and circumstances of each case.

12. Under Section 118 of Negotiable Instrument Act, unless the contrary is proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under section 139 of

Negotiable Instruments Act, the Court has to presume, unless the contrary was proved, that the cheque or holder of the cheque received the cheque for discharge, in whole or in part of a debt or liability. Thus in complaints under section 138 of Negotiable Instruments Act, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttal.

However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused.

POINT NO I

13. The case of the complainant is that the accused issued cheque in discharge of her liability and when the cheque Ex.P1 was presented in bank, it was returned for the reason “funds insufficient” on 01.06.2022 vide Ex.P2.

Thereafter, he got issued Ex.P3 statutory legal notice Dt.09.06.2022 by post

RPAD to the address of the accused and that the same was served on her on 10.06.2021, as per Ex.P5 acknowledgment and accused gave the reply notice

Ex.P6 dated 14.06.2022 as such contended that he has complied with the requirement of giving of the notice to accused in terms of clause (b) of proviso to Sec. 138 of N.I.Act.The complaint was filed on 18.07.2022 and it is within the limitation.

7 Fair Judgment in CC-NI No.419 of 2023

14. Regarding territorial jurisdiction and compliance with Section 142 of the

NI Act, Ex.P1 was drawn at the complainant’s bank situated in Kachiguda,

Hyderabad, which falls under the jurisdiction of P.S.Kachiguda, Hyderabad, and thereby comes under this court’s jurisdiction.

From the case record and the oral and documentary evidence presented by both parties, there appears to be no dispute regarding the compliance with the mandatory provisions under Sections 138 and 142 of the NI Act. The complainant has complied with all requirements, including presenting the subject cheques within their validity period, the bouncing of the cheques under cheque return memos, issuing the legal notice to the accused, and filing the complaint within the limitation period.

Therefore, Point No.1 is decided in favor of the complainant.

POINT II and III :-

15. For convenience sake, this court feel it desirable to discuss these two points together to avoid repetition in discussing the evidence that has come on record before the court on behalf of both the parties.

16. During the course of trial, the complainant having invoked the provisions of section 145(1) of Negotiable Instruments Act, filed his affidavit with a prayer to treat the same as his examination in chief and the same plea was permitted.

17. To substantiate the complainant's case, the complainant himself testified as PW1. Additionally, Ex.P1 to P7 were marked as his documentary evidence.Accused examined herself as DW2 and her husband examined as DW1.One person by named O.S.V.Naresh examined as DW3. Ex.D1 and D2 were marked.

8 Fair Judgment in CC-NI No.419 of 2023

18.It is useful to quote the judgment of Hon’ble Supreme Court in

Kalamani Tex & Anr. v. P. Balasubramanian (2021) 5 SCC 283, where in it was held that the NI Act mandates that once the signatures of an accused on the cheque/Negotiable instrument are established then these “reverse onus” clauses become operative. In such a situation the obligation shifts upon the accused to discharge the presumption imposed on him. Due to such admission, the presumption under section 139 of the N.I. Act that there exists a legally enforceable debt or other liabilty arose in the favor of the complainant.

19. It is useful to quote the judgment of Hon'ble Apex Court Rangappa v.

Sri Mohan, (2010) 11 SCC 441 where in it was held that the when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of “preponderance of probabilities”. Therefore, if the accused is able to raise a probable defence which creates doubt about the existence of a 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 a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his own.

20. No where in the evidence the accused denied her signature on Ex.P1 cheque. so as per the above judgment of Hon’ble supreme court and upon the presumptions the burden is on the accused to prove that the subject cheque is not related to this transaction.

21. The accused presented the following defenses during the trial.

The defense of the accused is that after the registration of the schedule property, they issued a post-dated cheque for an amount of 1,00,000 for₹ the purchase of furniture. Later, the complainant requested to give 1,00,000₹ in cash and that he will return the post dated cheque. The accused claims 9 Fair Judgment in CC-NI No.419 of 2023 that, along with her husband, she paid ₹1,00,000 in cash to the complainant in April 2022. However, the complainant neither returned the post-dated cheque nor provided the furniture as agreed. Consequently, the accused instructed her bank officials via phone call to stop the payment of the subject cheque. By misusing the cheque the accused alleges that complainant filed the false case.

22. Pw1 in his chief examination affidavit deposed that “ I had sold one immovable property i. e. Flat No. 402, Municipal No: 25-40/16/4A-A/402 on 4th Floor of Residential complex Sai Krupa Homes situated at

Saraswati Nagar, Medchal, Malkajgiri Dist vide document no. 1362/2022

dated 18-02-2022 duly executed in favour of the accused for a sale

consideration of Rs. 29,75,000/- and registered in the sub-registrar office.

I had also sold the movables to the accused i.e, furniture consisting of 2 sofa sets, refrigerator, 2 almirahas, dining table with chairs and diwan set which was in the schedule property belonging to me before sale of the immovable property for an agreed amount of Rs.1 Lakh. As the accused had purchased the above said flat the accused stated that she had no funds and issued an account payee post-dated cheque bearing no.570327 for Rs.1 Lakh (Rupees One Lakh only) dated 29-05-2022 drawn on Punjab

National Bank, Malkajgiri branch, Secunderbad in my favour towards discharge of the Legally enforceable debt and liability. The complainant believing the version of the accused in good faith accepted the post-dated cheque from the accused towards the movables purchased. The cheque bearing no.570327 for Rs.1 Lakh (Rupees One Lakh only) dated 29-05- 2022 drawn on Punjab National Bank, Malkajgiri branch, Secunderbad was presented in my bank for encashment i.e. Canara Bank, Kachiguda

Branch, Hyderabad but to my utter surprise and shock the aforesaid 10 Fair Judgment in CC-NI No.419 of 2023 cheque was dishonored in my bank i.e, Canara Bank, Kachiguda Branch,

Hyderabad for the reason funds insufficient by way of a return memo

dated 01-06-2022 informing me about the dishonor of cheque”.

23. PW1 in his cross-examination deposed that “It is true that I did not file any documents and photos to show that I have furniture with me in the apartment which was sold to the accused.

Q)Did you mention the date of which the furniture was delivered to the accused ?

A)As I sold the apartment, furniture was in that apartment only and the accused took the possession of the said apartment.

I am an income tax assessee. It is not true to suggest that which I sold the apartment to the accused was semi furniture apartment and there was no furniture in the apartment. The transaction related to sale of apartment was done at the house of accused. I am staying alone in my house. It is true that I have filed a Writ Petition before the Hon’ble High Court of T.S., Hyderabad in the month of January 2018 vide W.P. No. 2788 of 2022 praying regarding registration of flat. It is true that I mentioned in contents of Writ Petition that the said flat is semi furnished apartment. Witness adds that after the registration within 2 years I have furnished the furniture fully. It is not true to suggest that I did not sold any furniture to the accused and that I filed a false case against the accused. It is not true to suggest that the date of offence as alleged by me in my complaint is false. It is true that in my complaint and chief affidavit, I stated that before the sale of immovable property accused agreed to pay Rs.1,00,000/- for purchase of movable properties.

Q)As the movable property is sold before the purchase of immovable property and after delivering the possession of movable property sale will be completed in this case?

11 Fair Judgment in CC-NI No.419 of 2023

A)I handed over the keys of apartment to the accused along with the furniture. It is not true to suggest that the transaction was not done as alleged by me and that I filed this false case against the accused. I executed the sale deed vide Doc No.1362 of 2022 in the name of accused and her husband.It is not true to suggest that the accused has issued the subject cheque for security purpose for payment of balance amount of

Rs.1,00,000/- as she paid part payment of Rs.28,75,000/- to me. It is not true to suggest that by misusing the subject cheque issued for security purpose I filed the false case against the accused. Witness adds that the accused paid the entire amount of Rs.29,75,000/- and purchased the flat and the subject cheque was issued for purchase of furniture. It is not true to suggest that I never handed over the furniture to the accused ”.

24. DW1 in his cross-examination deposed that “Witness is confronted photo copy of sale deed dated 18.02.2022 and he admitted and same is marked Ex.P7. It is true that sale deed is executed between the complainant and my wife and myself. I am aware of the facts of this case.

The signature appearing on the Ex.P1 belongs to my wife. Witness adds that it’s a joint account. It is a joint account of mine and my wife. I have to verify the sale deed to known whether in the sale deed the flat is mentioned semi furnished or not. Witness is confronted with Ex.P7 and says that he cannot look into the words properly as he forgot to bring spects. I know reading and writing in English. Witness is confronted with

Ex.P7, he stated that some pages in Ex.P7 are missing and the clause regarding semi furnished flat is mentioned in those missing pages. It is not true to suggest that Ex.P7 is a complete sale deed document. It is true that I did not mention that an amount of Rs.1,00,000/- in cash was paid to complainant. Witness adds that the same is mentioned in reply notice.

12 Fair Judgment in CC-NI No.419 of 2023

It is true that I got prepared reply notice through my counsel. On instructions of accused, reply notice was got prepared by our counsel.

Accused demanded the complainant physically at his residence to return the cheques in the month of April 2022. It is true that there is no document to show that accused demanded the complainant to return the cheques. Q) What are the steps taken by me after demanding the cheques from the complainant till the accused received legal notice ?

Ans. We instructed our bank officials to stop the payment through the subject cheques. It is true that I did not file any letter to show that we gave instructions to stop the payment to our banker. It is not true to suggest that I am deposing false that I paid an amount of Rs.1,00,000/- in cash and not liable for cheque amount”.

25. DW2 in her chief-examination deposed that “ I purchased a semi finished house from the complainant and got registered on 18th February 2022. After registration, the complainant told me that he has furniture with him such as sofa, almarah, dining table with chairs and asked me to purchase the furniture on cost of Rs.1,00,000/-. Firstly I did not agreed to purchase the same as I have purchased the flat and got registered the same as such I did not have enough amount to purchase the furniture.

Again the complainant asked me to give post dated cheque for an amount of Rs.1,00,000/- for purchase of furniture. Later the complainant asked me to give the amount of Rs.1,00,000/- in cash and he will return the post dated cheque to me. Then myself along with my husband went to the house of complainant and paid the amount of Rs.1,00,000/- in cash to the complainant in the month of April 2022 but the complainant did not return my post dated cheque as his sister was not feeling well and admitted in hospital. Complainant said to me that he will return the post dated 13 Fair Judgment in CC-NI No.419 of 2023 cheque along with furniture to my flat. During last week of April, 2022, I again asked the complainant to return my post dated cheque and furniture but complainant demanded more money as he sold the furniture in low cost to me and used vulgar language. In the month of May 2022, I instructed my bank officials through phone call to stop the payment for the subject cheque. Later the complainant presented the subject cheque in his account without prior intimation to me and got returned as stop payment. Witness produced the original sale deed dated 18.02.2022 and

Building permit order dated 16.05.2018 and it is marked as Ex.D1. I filed writ petition before Hon’ble High Court for getting registration of semi finished flat and the Hon’ble High Court passed the orders. Ex.D2 is the copy of orders in W.P. No.2788/2022 dated 21.01.2022”.

26. DW2 in her cross-examination deposed that “It is true that Ex.P1 cheque is belongs to me and contains my signature. It is not true to suggest that complainant sold semi finished flat along with the furniture to me. I know the contents mentioned in my reply notice (Ex.P6). It is not true to suggest that I did not pay an amount of Rs.1,00,000/- in cash to the complainant in the month of April 2022 as stated in my chief examination and I deposed a false story. It is true that I did not mention the exact date on which I paid an amount of Rs.1,00,000/- to the complainant in Ex.P6 reply notice and the same I did not deposed in my chief examination. It is true that I did not make any demand in writing for return of cheque or cash for non delivery of furniture. It is not true to suggest that I am liable to pay the cheque amount to the complainant and that I am deposing false. ”.

27. It is evident from the evidence of the parties that there is no dispute regarding the sale and purchase of the schedule property as mentioned in 14 Fair Judgment in CC-NI No.419 of 2023

Ex.P7 and Ex.D1. However, the accused alleged that she purchased a semi-finished flat and submitted Ex.D2 to support her claim that she purchased a semi-finished residential flat (Flat No. 402). However, upon examining Ex.P7 and Ex.D1, it is apparent that neither document mentions that the flat was semi-finished. During the cross-examination of

DW1, when the learned counsel for the complainant questioned whether Ex.P7 stated that the flat was semi-finished, DW1 replied that he could not review the contents of Ex.P7 as he did not bring his spectacles. When the same question was raised again on further cross examination, DW1 claimed that

Ex.P7 was not fully filed and that the clause relating to the semi-finished flat was missing. He further alleged that the complainant did not submit the complete sale deed document. However, DW2, in her chief examination, filed the original sale deed document, which was later replaced by the certified copy and marked as Ex.D1. On comparing both Ex.P7 and Ex.D1, it is clear that they are identical documents. Upon further scrutiny, neither document mentions that the schedule property was a semi-finished flat. DW1’s statement about missing pages in the sale deed appears to be a vague and unsupported claim. In light of the above discussion, as neither Ex.P7 nor

Ex.D1 mentions that the flat was semi-finished, this court is inclined to believe the version of PW1 and holds that the flat was fully finished at the execution of sale deed.

28. DW2 in her Section 251 examination, stated that she never issued the subject cheque to PW1. However, during the cross-examination of PW1, the learned counsel for the accused took the defense as a suggestion that the subject cheque was given as security for the payment of a balance amount of ₹1,00,000, as she had already paid 28,75,000 sale consideration.Contrarily,₹

DW1, the husband of the accused, in his chief affidavit, stated for the first 15 Fair Judgment in CC-NI No.419 of 2023 time in the trial that he and his wife gave the subject cheque to the complainant to purchase furniture. He claimed that they later paid 1,00,000₹ in cash to the complainant, who promised to return the cheque but kept delaying and ultimately misused it by filing a false case instead of returning it.

DW2 also, for the first time in her chief examination, stated that initially, they did not agree to purchase the furniture but later agreed and issued a post- dated cheque for 1,00,000 to the complainant. She further stated that, at the₹ complainant’s request, she and her husband went to the complainant’s house in April 2022 and paid 1,00,000 in cash. However, the complainant neither₹ returned the post-dated cheque nor delivered the furniture. In her cross- examination, DW2 admitted that she did not specify the exact date on which the 1,00,000 was paid in cash in her reply notice or chief examination. She₹ also admitted that she never demanded the return of the cheque or the cash for non-delivery of the furniture.

In this case, the sale deed was executed on 18 February 2022, and as per the accused’s version, the post-dated cheque was issued with the date 29

May 2022. A legal notice was served to the accused on 10 June 2022, and the accused replied on 14 June 2022, as evidenced by Ex.P6. DW1 and DW2 claimed that they paid 1,00,000 in cash in April 2022. However, they have₹ not submitted any documents to prove this payment.

As no document was filed by DW3 to establish that he was the owner of

Flat No. 401 and neighbour to the accused, his evidence lacks credibility and cannot be considered by this court.

29. It is unreasonable and imprudent to believe the accused’s version. If the furniture was not delivered, it is highly unlikely that one would pay 1,00,000₹ in cash without first retrieving the earlier issued post-dated cheque. Moreover, if the accused had indeed paid 1,00,000 in April 2022 and did not receive₹ 16 Fair Judgment in CC-NI No.419 of 2023 either the furniture or the post-dated cheque, there is no explanation for why no legal action or notice was taken against the complainant. Despite being aware that the cheque remained with the complainant from date of execution of sale deed 18.02.2022 to 10.06.2022 reply notice, or from April 2022 to 10.06.2022, the accused failed to issue any legal notice requesting the return of the cheque or delivery of the furniture, nor did they file any complaint against the complainant for these actions. This inaction raises serious doubts about the credibility of the accused's claims.

30. The accused has falsely deposed before the court regarding the issuance of stop-payment instructions. While the accused claimed to have instructed the bank to stop payment of the cheque, no documentary evidence, such as a written request or confirmation from the bank, was submitted to substantiate this claim. Furthermore, Ex.P3 (cheque return memo) clearly indicates that the cheque was dishonored due to "funds insufficient" and not because of any stop-payment instructions. Additionally, DW2, in her chief examination, alleged that she communicated the stop-payment instructions to the bank via a phone call. However, DW1, during cross-examination, admitted that no written instructions or proof of such communication was provided to the bank. These inconsistencies demonstrate that the accused has misrepresented the facts before the court, further undermining her credibility and weakening her defense.

31. The accused has taken different and contradictory defenses throughout the case, weakening her credibility. Initially, DW2 in her Sec.251 Cr.P.C examination claimed she never issued the cheque to PW1. Later, she in the cross of PW.1 alleged that the cheque was given as security for a balance payment of 1,00,000. Her husband, DW1, introduced a new defense, stating₹ the cheque was issued for purchasing furniture, but 1,00,000 was later paid₹ 17 Fair Judgment in CC-NI No.419 of 2023 in cash. DW2 further claimed that despite this cash payment, the complainant neither returned the cheque nor delivered the furniture. These shifting defenses, without any supporting evidence, such as proof of cash payment or instructions to stop payment of the cheque, raise serious doubts about the accused’s claims and fail to rebut the presumption in favor of the complainant under the NI Act.

32. From the above discussion it is clear that no evidence was led by the accused to substantiate the contentions raised by him in order to disprove the presumption U/s. 118 and 139 of N.I Act except suggestions and denial regarding existence of legally enforceable debt, no cogent evidence was brought on record by accused. Hence, she failed to rebut the presumption raised U/s. 118 and 139 of N.I Act.

33. The learned counsel for the accused relied on the judgment of the

Hon’ble Andhra Pradesh High Court in Nagisetty Nagaiah vs State of

A.P., 2004 Crl.L.J. 4107, wherein it was held "If the complainant fails to file account books, income tax reports, or audit books before the court to substantiate that there was a legally enforceable debt, it can be said that the factual basis for raising a presumption under the law had not been established. In such a case, the complainant can be said to have failed to discharge the initial burden of proving that there was a legally enforceable debt. Therefore, dismissal of the complaint is proper."

It is useful to quote the judgment of the Hon'ble Supreme Court in

Rohitbhai Jivanlal Patel vs. State of Gujarat (2019 SCC OnLine SC

389), which held that “once the court has drawn a presumption of the existence of a legally enforceable debt under Section 139 of the NI Act, factors like the source of funds or the filing of income tax receipts are not required to be proved by 18 Fair Judgment in CC-NI No.419 of 2023 the complainant due to the presumption.In light of the decision by the

Hon'ble Supreme Court, the suggestion made by the accused regarding the

source is not relevant. In view of this precedent, the defenses taken by the accused are not tenable, as the accused himself failed to rebut the presumption and shift the onus onto the complainant. As the accused failed to produce cogent evidence in his favor, this court finds the defense unsubstantiated”.

In light of the decision by the Hon'ble Supreme Court, the suggestion made by the accused regarding the source of funds or lack of documentary evidence is not relevant. The defenses raised by the accused are, therefore, untenable as she has failed to rebut the presumption under Section 139 of the

NI Act. Since the accused did not produce any cogent evidence to support her defense or discharge the burden, this court finds the defense unsubstantiated.

The remaining cases, Laxminivas Agarwal vs Andhra Semi

Conductors (2005 SCC OnLine AP 1118) and Sudhir Kumar Bhalla vs

Jagdish Chand (2008) 7 Supreme Court Cases 137, involve facts that are distinct from the present case. As the factual matrix of these cases does not align with the circumstances of the current case, the judgments rendered in those cases are not applicable to the present matter at hand.

34. Hence in view of the discussion the complainant in this case could successfully prove that cheque Ex.P1 was issued towards payment.

Therefore, the accused did not rebut the presumption raised under Section 118 and 139 of the Negotiable Instruments Act. This Court has come to a conclusion that accused failed to convince this Court that Ex.P1 was not issued towards the discharge of legally enforceable l i a b i l i t y.

Thus point no II and III is answered in favour of complainant

and against the accused.

19 Fair Judgment in CC-NI No.419 of 2023

POINT IV

35. For the aforesaid reasons and findings in Points No.I to III, I proceed to pass the following:-

In the result, the accused is found guilty for the offence punishable

U/Sec.138 of NI Act and consequently she is convicted U/Sec.255(2)

Cr.P.C.

Typed to my dictation to stenographer, corrected and pronounced by

me in the open court on this 27 th day of November, 2024.

Sd/-

VII JUDICIAL MAGISTRATE OF FIRST CLASS

HYDERABAD.

36. Though as per section 255 of Criminal Procedure Code, hearing of the accused on the quantum of sentence is not within the ambit of the said section. Though the section does not manifest on hearing of the accused on quantum of sentence, still this court is of an opinion that the accused must be given an opportunity for hearing her on the quantum of sentence while imposing punishment in the interest of Justice and to meet the ends of justice.

37. The accused is heard on quantum of sentence, the accused has submitted that she is having three children and she has to take care of her children and to look after age old in-laws .Thus the accused had pleaded mercy and prayed this court to take lenient view .

38. The cheque amount in this case is Rs.1,00,000/- and twice the amount of cheque would come to Rs.2,00,000/- and the court can impose fine on the accused up to Rs.2,00,000/-.

39. In the result, the accused is found guilty for the offence punishable

U/Sec.138 of the Negotiable Instrument Act and consequently she is 20 Fair Judgment in CC-NI No.419 of 2023 convicted U/sec.255(2) of the Code of Criminal Procedure and sentenced to pay an amount of Rs.1,15,000/- and in default to undergo simple imprisonment for a period of three months. The amount of Rs.1,15,000/- shall be paid to the complainant as compensation U/Sec.357(3) Cr.P.C within one month.The bail bonds of the accused shall remain in force for the period of Six (6) months in terms of section 437-A of Code of Criminal

Procedure. Office is directed to furnish a free copy of this Judgment to the accused under proper acknowledgment as per Sec.363 Cr.P.C r/w Rule 72 of

Criminal Rules of Practice and Circular Orders, 1990. No order as to property.

Typed to my dictation to stenographer, corrected and pronounced

by me in the open court on this 27 th day of November, 2024.

Sd/-

VII JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

A PPENDIX O F E VIDENCE

W ITNESSES E XAMINED

F OR C OMPLAINANT

PW1 – Dilip Gunderao

F OR D EFENSE

DW-1 – Bhaskar Anand

DW-2 – G.S. Indira Anand

DW-3 – P.S.N Naresh

E XHIBITS M ARKED

F OR C OMPLAINANT :

Ex.P1:Cheque bearing No.570327 Dt.29.05.2022 for Rs.1,00,000/-.

Ex.P2 :Cheque Return Memo dt.01.06.2022.

21 Fair Judgment in CC-NI No.419 of 2023

Ex.P3:Office copy of legal notice dt.09.06.2022.

Ex.P4:Postal receipt dt.09.06.2022.

Ex.P5 : Acknowledgment dt.10.06.2022.

Ex.P6 : Reply notice dt.14.06.2022.

Ex.P7 : Certified copy of Sale deed dt.18.02.2022.

For Accused:

Ex.D1 : Original sale deed dt.18.02.2022 and building permit order dt.16.05.2018

Ex.D2 :Copy of orders in W.P.No.2788/2022 dt.21.01.2022.

Sd/-

VII JUDICIAL MAGISTRATE OF FIRST CLASS

HYDERABAD

//T RUE C OPY //

Fair judgment copy in C C NI No. 1727 of 2022

IN THE COURT OF THE IX METROPOLITAN MAGISTRATE, MANORANJAN

COMPLEX, NAMPALLY, HYDERABAD

PRESENT: Kum.Goolla Spandana, VII Metropolitan Magistrate. FAC: IX Metropolitan Magistrate. Hyderabad

Wednesday, 17th Day of January, 2024

CC.NI No.1727 of 2022

(Old CC.No.5230 of 2019)

BETWEEN: M/s. D. Badri Vishal & Co., proprietor, Mrs. Shoba Agarwal, W/o. Badri Vishal, age: 60 years, office at: 4-56, 1st floor, Vikas Nagar, Dilsukhnagar, Hyderabad – 60. Rep., by her SPA holder Sri Badri Vishal S/o. Late Devi Prasad, Age: 66 years, Occ: Business, R/o. 16-11-511/D/255, Shalivaharana Nagar, Moosrambagh, Hydeerabad – 36.

.... Complainant

AND

1. M/s. RVS Agro Commodities, rep., by its proprietor Mr. K. Selvamani Old No. 4, New 9, Maduraisamy, Madam East Street, Permbur, Chennai, Tamilnadu – 600011.

2. K. Selvamani, S/o. Not known, Age: Major, Occ: Proprietor of M/s. RVS Agro Commodities, Office at: Old No. 4, New 9, Maduraisamy, Madam East Street, Perambur, Chennai, Tamilnadu – 600011.

.... Accused No. 1 and 2

Offence Under Section 138 of Negotiable Instrument Act

This case is coming up before me for a final hearing on presence of Sri.

Peddakula Papaiah Counsel for the complainant and of Sri. H. Gowri

Shankar, Counsel for accused and having heard and having stood over for consideration, this court delivered the following:

Fair judgment copy in C C NI No. 1727 of 2022 2

J U D G M E NT

This is a private complaint filed against the above named accused for

Act. The offence punishable under Section 138 of Negotiable Instruments.

(hereinafter be referred to as N. I. Act)

The complainant’s case in brief is as follows:

1. The complainant herein is running a proprietorship firm under the name and style M/s. D. Badri Vishal & Co., having its office at 4-56, First Floor,

Vikas Nagar, Dilsukhnagar Hyderabad – 500060, dealing in supply of commercial feed supplements and other items etc., pertaining to commercial (poultry/aqua/cattle) field. The accused No. 2 introduced himself as proprietor of Accused no. 1 firm through email, dated 13.03.2018 and asked the complainant details to place the PO (Purchase order). Accordingly as per the accused request the complainant shared his business details to accused

No. 2. Thereafter the accused No. 2 being proprietor of Accused No. 1 company placed the purchase orders such as ie., 1. PO No. 121, dated 13.03.2018 to supply the DORB (De-oiled Rice bran) worth Rs.11,10,000/- in 100 Metric tons quantity, 2. PO. No. 122, dated 14.03.2018 to supply Ground nut oil cake, worth Rs.7,87,500/- in 25,000 Metric tons and 3. PO No. 124, dated 23.03.2018 to supply Ground nut oil cake worth Rs.13,72,800/- in 44,000 metric tons. Upon accused no. 2 request the complainant supplied the products as sought through email based on availability basis to Bhimavaram,

Andhra Pradesh and raised the invoices ie., 1. Invoice No. 51, dated 14.03.2018 of DORB (De-Oil Rice bran) worth Rs.2,40,426/- in 21.660 metric tones, 2. Invoice No. 53, dated 16.03.2018 of Ground Nut Oil Cake worth

Rs.6,52,065.75ps in 21.790 metric tones, 3. Invoice No. 60, dated 26.03.2018 of Ground Nut Oil Cake worth Rs.7,61,155.20 in 25.680 metric tones and

Fair judgment copy in C C NI No. 1727 of 2022 3

4. Invoice No. 61, dated 26.03.2018 of Ground Nut Oil Cake worth

Rs.6,36,370.80/- in 21.470 metric tones in total Rs.22,90,017.75ps.

2.The accused no. 2 had to pay the balance amount of Rs.8,33,341.95ps after deducted the transport charges of Rs.1,93,437.80ps, Rs.6,01,638/- and

Rs.6,61,600/- material returned charges out of total Rs. 22,90,017.75ps to the complainant. The accused evaded to enforceable debt on one pretext or the other whenever the complainant demanded. On repeated request made by the complainant finally the accused issued a cheque bearing no. 000066, dated 27.12.2018 for Rs.2,33,342/- duly drawn on ICICI Bank, Boradway Branch,

Chennai towards partially discharge of the outstanding amount and assured the complainant that the cheque would be honoured on its presentation. The complainant presented the above said cheque with his banker i.e., M/s. HDFC

Bank Limited, Malakpet Dilsukhnagar Branch for encashment, but to his surprise the same cheque was returned as dishonoured with an endorsement “Payment stopped by Drawer” vide cheque return memo, dated 01.02.2019.

3. The complainant after receipt of the cheque return memo got issued a legal notice, dated 14.02.2019 to the accused through RPAD on 18.02.2019.

The notice sent to accused was served on 22.02.2019. In spite of the said legal notice the accused deliberately failed/neglected to pay the impugned cheque amout towards discharge of a legally enforceable liability, thus rendering itself liable to be prosecuted under Negotiable Instruments Act 1881, as amended by the Banking, Public Financial Institutions and Negotiable Instruments

Laws (Amendment) Act, 1988 and prayed this Hon’ble Court to pass an order for payment of fine amount / compensation imposed, if any to the complainant under section 357 of Cr.P.C towards the cheque amount.

Fair judgment copy in C C NI No. 1727 of 2022 4

4.The complainant filed the present complaint on 04-04-2019 for the offence U/Sec., 138 of N I Act before the Hon’ble VII Additional Chief

Metropolitan Magistrate, Nampally, Hyderabad and numbered as C. C, No.

5230/2019, dated 12.04.2019 and the same was transferred to the II Special

Magistrate Court, Hyderabad vide Dis. No. 3203/MSJ/OPCELL/2019, dated

23.05.2019 and renumbered as C.C. No. 158/2019.

5. Upon the appearance of the accused, he was provided with a copy of the complaint and other relevant documents under Section 207 of the

Code of Criminal Procedure (Cr.P.C.). The accused was examined under

Section 251 of the Cr.P.C., where he denied the accusations, pleaded not guilty, and claimed to be tried for the said offense and posted for trial.

6. To prove the guilty of the accused, the complainant got examined himself as PW.1 and got marked Ex.P1 to Ex.P18 as documentary evidence and also got examined one Mr. Mahesh Kumar Agarwal as PW2 and marked Ex P19 as documentary evidence.

1. Ex P1 is the copy of self attested GST registration certificate in thenameof M/s. Badri Vishal & Co., dated 22.02.2018.

2. Ex P2 is the original purchase order No. 121, dated 13.03.2018

3. Ex P3 is the original purchase order No. 122, dated 14.03.2018

4. Ex P4 is the original purchase order No. 124, dated 23.03.2018

5. Ex P5 is the original Invoice No. 51, dated 14.03.2018

6. Ex P6 is the original Invoice No. 53, dated 16.03.2018

7. Ex P7 is the original Invoice No. 60, dated 26.03.2018

8. Ex P8 is the original Invoice No. 61, dated 26.03.2018

Fair judgment copy in C C NI No. 1727 of 2022 5

9. Ex P9 is the ledger statement of M/s. RVS Agro Commodities for the period of 01.04.2018 to 18.02.2019 in the books of the complainant.

10. Ex P10 is the original cheque No. 000066, dated 27.12.2018 for

Rs.2,33,242/- drawn on ICICI Bank Broadway branch, Chennai.

11. Ex P11 is the Original cheque return memo, dated 01.02.2019.

12. Ex P12 is the office copy of the Legal Notice, dated 14.02.2019.

13. Ex P13 is the Original registered post slip, dated 18.02.2019 (2Nos.)

14. Ex P14 is the original acknowledgment, dated 22.02.2019.

15. Ex P15 is the original letter dated 02.04.2019.

16. Ex P16 is the copy of emails correspondence between the complainant and accused during the period from 13.03.2016 to 02.05.2018 (10 Sheets).

17. Ex P17 is the special power of attorney given by Mrs. Shoba

Agarwal to Badri Vishal, dated 02.04.2019 (3 Sheets).

18. Ex P18 is the 65 – B certificate to the mails.

7.PW1 filed the petition vide Crl M P No. 464/2020 to recall the evi- dence of the prosecution and summon to examine the PW2 namely Mr.

Mahesh Kumar Agarwal and petition was allowed and marked the follow- ing document as Ex P19.

Ex P19 is the E-ticket, dated 15.08.2018 from Hyderabad to Chennai to show that the PW2 travelled on that day.

8.On behalf of the complainant Mr. Mahesh Kumar Agarwal is exam- ined as PW2. He was cross examined by the learned accused counsel. For

Fair judgment copy in C C NI No. 1727 of 2022 6 brevity and to avoid repetition, the relevant aspects of the cross-examina- tion are discussed while appreciating the evidence. Then the matter was posted for 313 Cr. P. C examination.

9. After the closure of the complainant’s evidence, the accused is examined U/Sec.313 Cr.P.C r/w 281 of Cr.P.C. The incriminating evidence appeared against him deposed by PW.1 & PW.2 was explained to him for which he denied the truthfulness of evidence. At this stage, as per the proceedings of the Hon’ble Metropolitan Sessions Judge, Hyderabad, vide

Dis. No. 1319/2021, dated 21.03.2021 the case is again transferred to the

Hon’ble VII ACMM, Hyderabad and restored as C. C. No. 5230/2019 and

subsequently re-transferred to this court vide Dis. No. 4177/2021, dated 14.12.2021 at the stage of NBW duly re-numbered as C C NI No. 1727 of 2022.

10.After recall of NBW the accused reported no defence evidence, the matter posted for arguments.

11. At the stage of Arguments the counsel for the PW1 is filed the petition U/sec., 311 vide Crl M P No. 270/2023 to recall the PW1 and PW2 for further cross examination which is very much essential to elicit truth.

The petition is partially granted to recall PW1, allowing for the further cross-examination of PW1. He was cross examined by the learned accused counsel. For brevity and to avoid repetition, the relevant aspects of the cross-examination are discussed while appreciating the evidence. Then the matter posted for arguments.

12. Heard the arguments on behalf of both sides and perused the record.

Fair judgment copy in C C NI No. 1727 of 2022 7

13. The learned counsel for complainant filed the citations and the counsel for the accused filed the written arguments and the same are taken into consideration. After having heard the arguments on both sides, the following points that arise for determination are as follows:-

Now the point for determination is that

I. Whether the complainant has complied with the essential ingredients of Section 138 of NI Act ?

II. Whether the accused rebutted the presumption under section 118 & 139 of NI Act?

III. Whether the complainant could establish that the cheque Ex.P10 was issued for legal enforceable debt and that the accused committed an offence under section 138 of NI Act ?

IV. To what order ?

14. Before adjudicating the points for determination whether the cheque was issued in discharge of any existing debt or liability by the accused in favour of the complainant and whether the accused could rebut the presumption available to the complainant under the Act. It would fit thing to draw attention on section 138,139 and 118 of NI Act for better appreciation of the facts of the case.

Conditions precedent for constituting an offence under S. 138 of NI Act

15.There are five distinct conditions precedent, which must be satisfied

before the dishonour of a cheque can constitute an offence and become

punishable.

(i) The cheque ought to have been presented to the bank within a period 6 months (3 months as per RBI vide Circular RBI/2011-12/251

DBOD AML BC No. 47/14.01.001/2011-12, dated 4-11-2011) from

Fair judgment copy in C C NI No. 1727 of 2022 8 the date on which it is drawn or within the period of its validity, whichever is earlier.

(ii) That the cheque was drawn from the account of the accused bank for discharge in whole or in part of any debt or other liability which pre- supposes a legally enforceable debt and

(iii) The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;

(iv) The payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.

(v) The drawer of such a cheque should have failed to make payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within 15 days of the receipt of the said notice.

The proviso appended of legal requirements before a complaint or a petition can be acted upon by a court of law.

It is only upon the satisfaction of all the five conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a),(b) and

(c).Along with the conditions to be fulfilled as stipulated under Section 142 NI

Act to take the cognizance against the offence under Section 138.

Presumptions

16.The Negotiable Instrument Act contains provisions raising presumptions as regards the negotiable instruments under section 118(a) of the Act as also

Fair judgment copy in C C NI No. 1727 of 2022 9 under section 139 of Negotiable Instrument Act. The said presumptions are rebuttal. Whether the presumption is rebutted or not would depend upon facts and circumstances of each case.

17.Under Section 118 of Negotiable Instrument Act, unless the contrary is proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under section 139 of

Negotiable Instruments Act, the Court has to presume, unless the contrary was proved, that the cheque or holder of the cheque received the cheque for discharge, in whole or in part of a debt or liability. Thus in complaints under section 138 of Negotiable Instruments Act, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttal.

However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused.

Point No I

18. The case of the complainant is that the accused issued cheque in discharge of his liability and when the cheque Ex.P10 was presented in bank, it was returned for the reason “Payment stopped by Drawer” on 01.02.2019 and statutory notice dated 14.02.2019 was issued to the accused and despite receiving the legal notice on 22.02.2019. The accused failed to repay the amount stated in the cheque within the specified time frame. The complaint was filed on 04.04.2019 and it is within the limitation, coming to the territorial jurisdiction compliance of section 142 of NI Act. Ex.P10 was drawn at complainant’s ICICI Bank and it was presented in the complainant’s bank ie., HDFC Bank Limited, Malakpet, Dilsukhnagar, Hyderabad which comes within the limits if P.S.Malakpet, Hyderabad and which comes under this

Court’s jurisdiction.

Fair judgment copy in C C NI No. 1727 of 2022 10

POINT II and III :-

19. For convenience sake, this court feel it desirable to discuss these two points together to avoid repetition in discussing the evidence that has come on record before the court on behalf of both the parties.

20. During the course of trial, the complainant having invoked the provisions of section 145(1) of Negotiable Instruments Act, filed his affidavit with a prayer to treat the same as his examination in chief and the same plea was permitted.

21. To substantiate the complainant's case, the complainant himself testified himself as PW1 and one Mahesh Kumar Agarwal examined as

PW2. Additionally, Ex.P1 to P19 were marked as his documentary evidence.

22. It is useful to quote the judgment of Hon’ble Supreme Court in

Kalamani Tex & Anr. v. P. Balasubramanian (2021) 5 SCC 283, where in it was held that the NI Act mandates that once the signatures of an accused on the cheque/Negotiable instrument are established then these “reverse onus” clauses become operative. In such a situation the obligation shifts upon the accused to discharge the presumption imposed on him. Due to such admission, the presumption under section 139 of the N.I. Act that there exists a legally enforceable debt or other liabilty arose in the favor of the complainant.

23. It is useful to quote the judgment of Hon'ble Apex Court Rangappa v.

Sri Mohan, (2010) 11 SCC 441 where in it was held that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of “preponderance of probabilities”. Therefore, if the accused is able to raise a probable defence which creates doubt about the

Fair judgment copy in C C NI No. 1727 of 2022 11 existence of a 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 a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his own.

24. No where in the evidence the accused denied his signatures on Ex.P10 cheque. So as per the above judgment of Hon’ble supreme court and upon the presumptions the burden is on the accused to prove that the subject cheque is not related to this transaction.

25. The accused presented the following defenses during the trial.

He is not liable to pay any amount to the complainant and he claimed that the cheque amount valued material was returned to the complainant.

26. PW1 in his chief examination stated that “ I, D. Badri Vishal S/o. late

Devi Prasad, age 66 years, Occupation: Business, R/o. 16-11-511/D/255,

Shalivahana Nagar, Moosrambagh, Hyderabad-36,as special power of at- torney holder for the complainant states that iam well acquainted with the facts of the case. I am running a proprietorship firm under the name and style M/s. D. Badri Vishal & Co, having its office at 4-56, First floor, Vikas

Nagar, Dilsukhanagar, Hyderabad-500060, dealing in supply of commer- cial feed supplements and other items etc., pertaining to commercial (poultry/aqua/cattle) field. I humbly submit that, the accused no.2 intro- duced himself as proprietor of Accused No. 1 firm and vide email dated 13- 9-2018 requested to furnish the complete details about our firm to raise the PO (purchase order) accordingly. On such request, through reply e- mail dated 13-3-2018, I shared the business details with the accused,

Thereafter, the accused placed the following orders to us to be delivered to his agent at Bhimavaram, Andhra Pradesh.

Fair judgment copy in C C NI No. 1727 of 2022 12

1. PO No. 121, dated 13.03.2018 to supply the DORB (De-oiled Rice bran) worth Rs.11,10,000/- in 100 Metric tons quantity,

2. PO. No. 122, dated 14.03.2018 to supply Ground nut oil cake, worth

Rs.7,87,500/- in 25,000 Metric tons and

3. PO No. 124, dated 23.03.2018 to supply Ground nut oil cake worth

Rs.13,72,800/- in 44,000 metric tons.

I submit that, I supplied the above products based on availability basis to Bhimavaram, in Andhra Pradesh and raised invoices. The accused vide email dated 27-3-2018 had confirmed us about the receipt of the in- voices. The details of the invoices are as follows: ie.,

1. Invoice No. 51, dated 14.03.2018 of DORB (De-Oil Rice bran) worth

Rs.2,40,426/- in 21.660 metric tons,

2. Invoice No. 53, dated 16.03.2018 of Ground Nut Oil Cake worth

Rs.6,52,065.75ps in 21.790 metric tons,

3. Invoice No. 60, dated 26.03.2018 of Ground Nut Oil Cake worth

Rs.7,61,155.20 in 25.680 metric tons and

4. Invoice No. 61, dated 26.03.2018 of Ground Nut Oil Cake worth

Rs.6,36,370.80/- in 21.470 metric tons in total Rs.22,90,017.75ps.

I humbly submit that, from the above amount of Rs.22,90,017.75/- a sum of Rs. 1,93,437.80/- is deducted towards transportation & GST, leaving balance amount of Rs. 20,96,579.95/- to be paid by the accused within 2 days from the date of delivery. The accused by the end of 31st

March 2018, paid a sum of Rs.6,01,638/- leaving balance amount of Rs.

14,94,941.95/- In the month of April 2019, the accused paid a further sum of Rs. 1,00,000.00 and material worth Rs.5,61,600/- was returned by

Fair judgment copy in C C NI No. 1727 of 2022 13 the accused. Thus, after deduction of Rs.6,61,600/- i.e., ( Rs.5,61,600/- +

Rs.1,00,000/-) from out of the balance amount of Rs.14,94,941.95/- the accused is still liable to pay a sum of Rs.8,33,341.95/- to us. I humbly submit that, whenever I requested the accused to make the payment, the accused procrastinated to pay the amount on one pretext or the other. Fi- nally, after repeated follows ups through mails & oral communication over phone, the accused towards partial discharge of the outstanding amount had issued a cheque in the name of the complainant bearing No. 000066

dated 27-12-2018 for Rs.2,33,342/- drawn on ICICI Bank, Broadway

Branch, Chennai, and further assured the complainant that he would without fail make necessary arrangements of funds in his account to meet the requirement of the said cheque. I submit that, when the cheque bear- ing No. 000066, dated 27-12-2018 for Rs.2,33,342/- drawn on ICICI Bank,

Broadway Branch, Chennai-600108, on the instructions of the accused, when was presented with my banker, M/s. HDFC Bank Limited, situated at Malakpet, Dilsukhnagar Branch, the said cheque was returned unpaid for the reason "payment stopped by Drawer" by the Accused Banker ICICI

Bank, Broadway Branch, Chennai-600108 and the same was informed to me vide Cheque return memo dated 01-02-2019, whereas when the said factum of dishonor of the said cheque was though informed to the ac- cused, he has not made any efforts to repay the amount covered by the said cheque ”.

27. PW1 in his cross-examination deposed that “It is not true to say that notice was not sent to the accused. I issued notice basing on the power of attorney given to me by my wife. My wife is the proprietor of business. I do not know whether it was mentioned in the notice that I am given the

Fair judgment copy in C C NI No. 1727 of 2022 14 notice under the authority of power of attorney. I have mentioned the quality in the complaint. It is not true to say that I have not issued any no- tice after my wife gave power of attorney to me. Accused came to us for first time. I do not remember how much amount was due to be pay by ac- cused it is about Rs. 14,00,000/-. I sent the material by road and no ac- knowledgment was received for receipt of material. It is not true to say that

I do not know whom the material was supplied. There is no receipt filed in the court for the delivery of material mentioned in the case. It is not true to say that the material was not given to the party but given to somebody else therefore no payment was made. My eye sight is good. I cannot say there are 2 ink on the cheque. It is not true to say that I misused the empty cheque given by accused. The accounts are audited by charted ac- countant. It is true that the charted accountant seal is not present on

Ex.P9. It is not true to say that the statement was created for the purpose of the case. It is not true to say that I do not know the accused. It is not true to say that no material was given to accused and accused is not liable to pay any amount and I am deposing falsely.Accused had given me 3 or 4 purchase orders. As per Ex P2 to Ex P4 we have supplied DORB, GNOC material to accused. I do not remember the quantity of the supplied mate- rial exactly. It might be 100 metric tones DORB and 70 metric Tones of

GNOC. It is true that the specifications mentioned in Ex P2, Ex P3, Ex P4 was not mentioned in my legal notice, Complaint and chief affidavit. I do not remember that how much amount was due by the accused as per Ex

P9. I filed the subject cheque of Rs.2,33,240/- and odd. It is incorrect to say that it is not a legally enforceable debt. It is incorrect to say that as my son and my manager look after my business I do not have any knowledge

Fair judgment copy in C C NI No. 1727 of 2022 15 about this case. It is incorrect to say that I filed this case to extract the more money from the accused and to harass him. It is incorrect to say that as there are business transaction with the accused I have misused the subject cheque and filed in this case”.

28. PW2 (Mahesh kumar agarwal )in his chief examination stated that “I operate the computer system of our business to send & receive mails, to co-ordinate with the customers for placing & receiving orders and all that communications that happen through computer system. I also manage & take care the accounts of our business. I humbly submit that, all the emails communications that happened with accused no.2 were sent from the office computer system operated by me. Our email id: is d.badrivisha- landco@gmail.com" and accused email id is "selva@rvsagro.in". The copies of the said email communications with the accused are already filed in the court, along with the compliant and are marked as Ex-P.16. The accused vide email dated 13-3-2018 had requested to deliver the material to bhi- mavaram. According the material was delivered and the invoices were raised. The accused also confirmed the receipt of the invoices through email dated 27-3-2018 and also requested to send the freight details to make the freight payment. As per the request of the accused, we shared the freight details and freight charges vide email dated 27-3-2018.I humbly submit that when I went to Chennai for colleting the balance pay- ment of the accused towards part payment issued cheque in the name of the complainant bearing No. 000066 dated 27-12-2018 for Rs.2,33,342/- drawn on ICICI Bank, Broadway Branch, Chennai.Ex.P19 is marked through PW2”.

Fair judgment copy in C C NI No. 1727 of 2022 16

29. During Section 251 Cr.P.C examination, the accused stated that he is not liable to pay any amount to the complainant. Even in the Section 313 Cr.P.C examination, the accused claimed that the cheque amount val- ued material was returned and that he is not liable for any due amount and pw1 misused the subject cheque. He also stated that he did not re- ceive any material from the complainant company.

According to the evidence presented by PW1, he filed Ex.P17 to show that the proprietor of the complainant company has given special power of attorney and gave him authorization to represent the company. He admit- ted that he did not file any documents to demonstrate to whom the mate- rial was supplied, and he did not provide any receipts to show that the material was delivered to the accused. PW1 filed Ex.P1 to P19 to support his contentions. Ex.P2,P3 and P4 are the purchase orders,Ex.P5 to P8 are the invoice’s for the material supplied to the agent of the accused in Bhi- mavaram, and Ex.P9 is the ledger account maintained by PW1's company.

Upon perusal of the record, it is evident that Ex.P12, a legal notice, was served to the accused vide Ex.P13, Additionally, PW1 filed Ex.P14 to demonstrate that legal notice were served to the accused address. Upon reviewing the entire evidence, it is notable that the accused did not issue any reply to the legal notice Ex.P12 received from the complainant. Ex.P16 includes email conversations from the accused dated 13-03-2018 to 02- 05-2018 which are evident that the accused placed orders for the supply of material using his email ID to the complainant company's email ID. Nu- merous conversations have taken place regarding the material, order placement, and charges for the vehicle etc. In written arguments, the de- fense counsel contended that the email conversation Ex.P16 should not be given importance as section 65B of the Indian Evidence Act certificate has

Fair judgment copy in C C NI No. 1727 of 2022 17 not been provided for it. But upon reviewing the records, it is evident that

PW2, during his chief examination, stated that he operates the computer system for the business. He further mentioned that email communications occurred between him and accused no.2, from his office computer, and were sent to the email ID of the accused. Exhibit P16 comprises the email conversations, substantiated by Exhibit P18, which is the certificate under

Section 65B of the Indian Evidence Act. During cross-examination, no rel- evant questions were raised concerning the email conversation and

Ex.P18. Additionally, PW2 submitted Ex.P19 demonstrating that he trav- eled from Hyderabad to Chennai in August 2018, where he met the ac- cused. In that meeting, the accused provided four cheques as a means of discharging the liability. In the cross-examination of PW1 and PW2, no substantial information was elicited. The defense counsel's failure to raises questions regarding Ex.P16 also raises doubts . Furthermore, the accused did not specifically deny his phone number and the email conversations during cross-examination. The accused also failed to explain as to show that he is not liable for the cheque amount,as he returned the material of equivalent value. Moreover,he admitted the transaction between him and the PW1 but he did not demonstrate any payments made to PW1's com- pany to disprove that he is liable for any legally enforceable debt.

30. From the above discussion it is clear that no evidence was led by the accused to substantiate the contentions raised by him in order to disprove the presumption U/s. 118 and 139 of N.I Act except suggestions and de- nial regarding existence of legally enforceable debt, no cogent evidence was brought on record by accused. Hence, he failed to rebut the presumption raised U/s. 118 and 139 of N.I Act. This Court has come to a conclusion

Fair judgment copy in C C NI No. 1727 of 2022 18 that accused failed to convince this Court that Ex.P10 was not issued towards the discharge of legally enforceable debt.

31. Thus, point no ii and iii are decided against the accused and in fa- vor of the complainant.

POINT IV

32. For the aforesaid reasons and findings in Points No.I to III, I proceed to pass the following:-

In the result, the accused is found guilty for the offence punishable

U/Sec.138 of NI Act and consequently he is convicted U/Sec.255(2) Cr.P.C.

Typed to my dictation to Typist, corrected and pronounced by me in

the open court on this 17 th day of January, 2024.

Sd/-

VII METROPOLITAN MAGISTRATE

FAC IX METROPOLITAN MAGISTRATE

HYDERABAD

33. The accused absent on 17-01-2024. The counsel for the accused filed a petition under section 353(6) of the Cr.P.C., and the same was allowed. The matter is adjourned to today to give the accused a chance to address the quantum of the sentence.

34. Though as per section 255 of Criminal Procedure Code, hearing of the accused on the quantum of sentence is not within the ambit of the said section. Though the section does not manifest on hearing of the accused on quantum of sentence, still this court is of an opinion that the accused must be given an opportunity for hearing him on the quantum of sentence while imposing punishment in the interest of Justice and to meet the ends of justice.

Fair judgment copy in C C NI No. 1727 of 2022 19

35. Accused called present today and the accused is heard on quantum of sentence, the accused has submitted that he is is having two children and he is the sole bread winner of his family to look after. The accused had pleaded mercy and prayed this court to take lenient view .

36. The cheque amount in this case is Rs.2,33,342/- and twice the amount of cheque would come to Rs.4,66,684/- and the court can impose fine on the accused up to Rs.4,66,684/-.

37. In the result, the Accused No. 1 & 2 are found guilty for the offence punishable U/Sec.138 of the Negotiable Instrument Act and consequently

A2 representating A1 convicted U/sec.255(2) of the Code of Criminal

Procedure and sentenced to undergo Simple Imprisonment for a period of

Six months and to pay Rs. 2,43,000/- and in default to undergo simple imprisonment for a period of two months. Out of the total amount of

Rs.2,43,000/-, Rs.3,000/- shall be paid to the State and the remaining compensation amount of Rs.2,40,000/- shall be paid to the complainant as compensation U/Sec.357(1)(b) Cr.P.C.within one month. A free copy of

Judgment shall be given to the accused as per Sec.363 Cr.P.C r/w Rule 72 of Criminal Rules of Practice and Circular Orders, 1990. The remand period if any undergone by the accused during trial shall be set off U/s.

428 of Cr.P.C.

Typed to my dictation to Typist, corrected and pronounced by me in

the open court on this 24 th day of January, 2024.

Sd/-

VII METROPOLITAN MAGISTRATE

FAC IX METROPOLITAN MAGISTRATE

HYDERABAD

Fair judgment copy in C C NI No. 1727 of 2022 20

A PPENDIX O F E VIDENCE

W ITNESSES E XAMINED

F OR C OMPLAINANT

PW1 D. Badri Vishal

PW2 Mr. Mahesh Kumar Agarwal

F OR D EFENSE

Nil

E XHIBITS M ARKED

F OR C OMPLAINANT :

1. Ex P1 is the copy of self attested GST registration certificate in thenameof M/s. Badri Vishal & Co., dated 22.02.2018.

2. Ex P2 is the original purchase order No. 121, dated 13.03.2018

3. Ex P3 is the original purchase order No. 122, dated 14.03.2018

4. Ex P4 is the original purchase order No. 124, dated 23.03.2018

5. Ex P5 is the original Invoice No. 51, dated 14.03.2018

6. Ex P6 is the original Invoice No. 53, dated 16.03.2018

7. Ex P7 is the original Invoice No. 60, dated 26.03.2018

8. Ex P8 is the original Invoice No. 61, dated 26.03.2018

9. Ex P9 is the ledger statement of M/s. RVS Agro Commodities for the period of 01.04.2018 to 18.02.2019 in the books of the complainant.

10. Ex P10 is the original cheque No. 000066, dated 27.12.2018 for

Rs.2,33,242/- drawn on ICICI Bank Broadway branch, Chennai.

11. Ex P11 is the Original cheque return memo, dated 01.02.2019.

12. Ex P12 is the office copy of the Legal Notice, dated 14.02.2019.

13. Ex P13 is the Original registered post slip, dated 18.02.2019 (2Nos.)

14. Ex P14 is the original acknowledgement, dated 22.02.2019.

Fair judgment copy in C C NI No. 1727 of 2022 21

15. Ex P15 is the original letter dated 02.04.2019.

16. Ex P16 is the copy of emails correspondence between the complainant and accused during the period from 13.03.2016 to 02.05.2018 (10 Sheets).

17. Ex P17 is the special power of attorney given by Mrs. Shoba

Agarwal to Badri Vishal, dated 02.04.2019 (3 Sheets).

18. Ex P18 is the 65 – B certificate to the mails.

19. Ex P19 is the E-ticket dated 15.08.2018 from Hyderabad to

Chennai.

Exhibits Marked

For Accused:

Nil

Sd/-

VII METROPOLITAN MAGISTRATE

FAC: IX METROPOLITAN MAGISTRATE

HYDERABAD

// TRUE COPY //

1 Fair Judgment in CC-NI 7476 of 2022

IN THE COURT OF THE VII JUDICIAL MAGISTRATE OF FIRST CLASS,

MANORANJAN COMPLEX, NAMPALLY, HYDERABAD

PRESENT: Kum.Goolla Spandana, VII Judicial Magistrate of First Class, Hyderabad

Friday, 06 th Day of September, 2024

CC-NI.No.7476 of 2022

(Old CC No.11153 of 2019 on the file of Hon’ble IV Addl. Chief Judicial

Magistrate, Hyderabad)

BETWEEN: M/s. Clarion Agro Products Pvt. Ltd, Rep. By its Manager, Mr. Shaik Muqthiar is substituted by B.Madhu, Aged about 39 years, Occ : Manager, Factory at Plot No.41 & 53, Survey No.165 and 166, Industrial Park, Phase III, Pashamylaram,

Patancheru Mandal, Sangareddy District. ... Complainant.

AND

M/s. Shiva Sagar Agro Foods, Rep. By its Propreitor, Mrs.Vasundhara Akunuru, W/o. Mr. Ashok Akunuru, Aged about 48 years, Occ : Business, Plot No.347, Flat No.401, Akshaya Towers, Jawahar Nagar, Moula Ali,

Hyderabad – 500040. ... Accused.

Offence Under Section 138 of Negotiable Instrument Act

This case is coming up before me for a final hearing on presence of K.Anoop

Kumar, Counsel for the Complainant and of B.Pradeep Kumar, Counsel for

Accused and having heard and having stood over for consideration, this court delivered the following:

J U D G M E N T

1.This is a private complaint filed against the above named accused for the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter be referred to as N.I.Act.

The complainant’s case in brief is as follows:

2.Complainant’s representative submits that complainant is registered company under the Registration of Companies Act 1956, having its registered 2 Fair Judgment in CC-NI 7476 of 2022 office at Plot No.41 and 53 Survey No.165 and 166, Industrial Park, Phase-III,

Pashamylaram, Patancheru Mandal, Sangareddy District Rep. By its Manager Mr.

Sahik Muqthiar, to look after day to day affairs of the company as per Resoution dt.14.05.2019, the complainant submits that its deal in business of Wheat and its products, manufacturing of atta, Maida, Rava, Suji etc and supplying the same to various wholesaler and retailers on cash/credit basis. The accused company Rep. by its Propreitor Mrs. Vasundhara Akunuru requested complainant to supply above said products through 6 invoices as per accused request and mentioned below:-

SL.NO. Invoice No. Date Amount

1.BOS00445021.11.18Rs.1,48,260/-

2.BOS00456825.11.18Rs.1,974/-

3.BOS00471203.12.18Rs.2,05,750/-

4.BOS00481410.12.18Rs.1,52,450/-

5.BOS00500719.12.18Rs.2,43,630/-

6.BOS00518026.12.18Rs.75,900/- Total Rs.8,27,964/-

The complainant states that on persistent demands made by the complainant, the accused has issued 3 cheques, 1) cheque bearing No.250208, dt.04.01.2019 for Rs.2,05,750/-, 2) cheque bearing No.250208, 06.01.2019 for

Rs.2,38,757/-, 3) cheque bearing No.250208, 11.01.2019 for Rs.1,52,450/-. Total for Rs.5,96,957/- all are drawn on Syndicate Bank, Peerzadiguda branch, Ranga

Reddy, towards part payment of legally enforceable debt, and as per the instructions of accused only the complainant has presented 3 cheques in his banker HDFC Bank Ltd, Barkatpura, Branch, Hyderabad but it was dishonoured with an endorsement “Funds Insufficient” vide cheque return memos dt.03-04- 2019 and thereafter the complainant got issued Registered Legal Notice dt.19-04- 2019 by way of registered post and also by courier service to the shop and residential addresses of the accused calling upon the accused to pay the said amount within 15 days from the date of the receipt of the said notice. The notice sent under registered post to the residential address has been received by the 3 Fair Judgment in CC-NI 7476 of 2022 accused on 29.04.2019 and courier service notice on 22.04.2019, but accused neither repaid the cheque amount nor gave any reply. Hence this compaiant.

3. The complainant filed the complaint before the Hon’ble IV Additional Chief

Metropolitan Magistrate, Hyderabad on 16.05.2019 and numbered as CC.No.

11153/2019. As per the proceedings of the Hon’ble Metropolitan Sessions Judge,

Hyderabad, this case was transferred to XXI Special Magistrate, Hyderabad and case is re-numbered as CC No.512/2019. Upon the appearance of the accused, he was provided with a copy of the complaint and other relevant documents under Section 207 of the Code of Criminal Procedure (Cr.P.C.). At this stage as per the orders of the Hon’ble M.S.J. the case is transferred from Hon’ble IV

ACMM, Hyderbad to this court and again re-numbered as CC-NI. No.7476/2022.

4. In this court the accused was examined under Section 251 of the Cr.P.C., where she denied the accusations, pleaded not guilty and claimed to be tried for the said offense.

5. After section 251 Cr.P.C the complainant's counsel filed a substitution petition to substitute the present manager, Mr.B.Madhu, in place of Shaik

Muqthiar, and the petition was numbered and allowed vide Crl.M.P.No.1277 of 2022 on 14.12.2022. To prove the guilt of the accused, the complainant filed his chief affidavit and he is examined as PW.1 and got marked Ex.P1 to Ex.P27 as documentary evidence.

6. PW1 was cross-examined by the learned counsel for the Accused. For brevity and to avoid repetition, the relevant aspects of the cross-examination are discussed while appreciating the evidence.

7.After the closure of complainant’s evidence, the accused is examined

U/Sec.313 Cr.P.C r/w 281 of Cr.P.C. The incriminating evidence appeared 4 Fair Judgment in CC-NI 7476 of 2022 against her deposed by PW.1 was explained to her for which she denied the truthfulness of evidence and reported no defense evidence. Hence the defense evidence is closed. After the closure of the accused’s evidence, the matter posted for arguments.

8. Heard the arguments on behalf of both sides and perused the record. After carefully hearing the arguments presented by both sides, the following points arise for determination:

Now the point for determination is that

I. Whether the complainant has complied with the essential ingredients of

Section 138 of NI Act ?

II. Whether the accused rebutted the presumption under section 118 & 139 of NI Act?

III. Whether the complainant could establish that the cheques Ex.P15, P17,

P19 were issued for legal enforceable debt and that the accused committed an offence under section 138 of NI Act ?

IV. To what order ?

9. Before adjudicating the points for determination whether the cheque was issued in discharge of any existing debt or liability by the accused in favour of the complainant and whether the accused could rebut the presumption available to the complainant under the Act. It would fit thing to draw attention on section 138,139 and 118 of NI Act for better appreciation of the facts of the case.

Conditions precedent for constituting an offence under S. 138 of NI Act

10.There are five distinct conditions precedent, which must be satisfied before the dishonour of a cheque can constitute an offence and become punishable.

(i) The cheque ought to have been presented to the bank within a period 6 months (3 months as per RBI vide Circular RBI/2011- 12/251 DBOD AML BC No. 47/14.01.001/2011-12, dated 4-11- 5 Fair Judgment in CC-NI 7476 of 2022 2011) from the date on which it is drawn or within the period of its validity, whichever is earlier.

(ii) That the cheque was drawn from the account of the accused bank for discharge in whole or in part of any debt or other liability which pre- supposes a legally enforceable debt and

(iii) The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;

(iv) The payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.

(v) The drawer of such a cheque should have failed to make payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within 15 days of the receipt of the said notice.

The proviso appended of legal requirements before a complaint or a petition can be acted upon by a court of law.

11. It is only upon the satisfaction of all the five conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and (c) along with the conditions to be fulfilled as stipulated under Section 142 NI Act to take the cognizance against the offence under Section 138.

Presumptions

12. The Negotiable Instrument Act contains provisions raising presumptions as regards the negotiable instruments under section 118(a) of the Act as also under section 139 of Negotiable Instrument Act. The said presumptions are rebuttal.

Whether the presumption is rebutted or not would depend upon facts and circumstances of each case.

6 Fair Judgment in CC-NI 7476 of 2022

13. Under Section 118 of Negotiable Instrument Act, unless the contrary is proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under section 139 of Negotiable

Instruments Act, the Court has to presume, unless the contrary was proved, that the cheque or holder of the cheque received the cheque for discharge, in whole or in part of a debt or liability. Thus in complaints under section 138 of Negotiable

Instruments Act, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttal. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused.

POINT NO I

14. The case of the complainant is that the accused issued cheques in discharge of her liability and when the cheques Ex.P15,P17,P19 were presented in bank, it was returned for the reason Insufficient funds on 03.04.2019 vide Ex.P16, P18,

P20. Thereafter, he got issued Ex.P21 statutory legal notice Dt.19.04.2019 by post RPAD to the address of the accused and that the same was served on her, as per Ex.P25 acknowledgment card as such contended that he has complied with the requirement of giving of the notice to accused in terms of clause (b) of proviso to Sec. 138 of N.I.Act.

15. PW1 in his cross-examination deposed that “ It is not true to suggest that the address of accused appearing on Ex.P21 is a false address. It is true that the signatures appearing on subject cheques and the signature on Ex.P25 are different. It is not true to suggest that Ex.P24 is a fabricated document. ”

16. In present case it is the burden of the accused to prove that she did not recieve legal notice. Ex.P25 acknowledgment card shows it was served to the address mentioned in the cause title. The accused failed to rebut the presumption under section 27 of General clauses Act 1897. Merely by making the remarks that the notice was not served properly will not suffice and it is for the 7 Fair Judgment in CC-NI 7476 of 2022 accused to take steps to prove that notice was not served upon her. Moreover the accused neither entered into the witness box nor produced any evidence regarding her address proof. During the cross-examination of PW1, the accused suggested that her address on Ex.P21 was false and also suggested that Ex.P24 was fabricated. However, no document related to the address proof was filed.

Therefore, considering Exs.P24 and P25, this court finds that the statutory legal notice was properly issued and served to the accused.

17. The accused failed to repay the amount stated in the cheque within the specified time frame. The complaint was filed on 16-05-2019 and it is within the limitation,coming to the territorial jurisdiction compliance of section 142 of NI

Act. Subject cheques were drawn at complainant’s bank situated at barkatpura,

Hyderabad which comes within the limits of P.S.Kachiguda, Hyderabad and which comes under this court’s jurisdiction.

Therefore, Point No.1 is decided in favor of the complainant.

POINT II and III :-

18. For convenience sake, this court feel it desirable to discuss these two points together to avoid repetition in discussing the evidence that has come on record before the court on behalf of both the parties.

19. During the course of trial, the complainant having invoked the provisions of section 145(1) of Negotiable Instruments Act, filed his affidavit with a prayer to treat the same as his examination in chief and the same plea was permitted. As seen from facts incorporated in the said affidavit filed by the complainant who was examined as PW1 it is reiteration of facts mentioned in his complaint.

20. To substantiate the complainant's case, the complainant himself testified as PW1. Documentary evidence is marked on behalf of the complainant.

8 Fair Judgment in CC-NI 7476 of 2022

21. A careful scrutiny of the documents relied upon by the complainant shows that the statutory requirements of Section 138 of the N.I. Act have been complied with and this complaint is filed within the time limit. Thus, the complainant is entitled to rely on the statutory presumptions enshrined under Section 118 read with Section 139 of the N.I. Act.

22. No doubt, the said presumptions of law are rebuttable in nature. The accused can take probable defence in the scale of preponderance of probability to rebut the presumption available to the complainant. Let me examine whether the accused has successfully rebutted the said presumptions of law. The accused has specifically denied availing material from the complainant and issuance of

Ex.P15, P17, P19 cheques for payment of said liability.

The accused presented the following defenses during the trail.

The defense of the accused is that she provided blank signed cheques as security and that she stopped doing business with the complainant company.

As a result, the complainant, holding a grudge against the accused, fabricated documents and filed this false case. The accused asserts that there is no legally enforceable debt. The accused also asserts that the present complainant was not the initial complainant in this case, as it was originally filed by Shaik

Muqthiar. The accused claims that the present complainant has no knowledge about the case transactions and further argues that, as the earlier complainant had no proper authorization, the complaint itself is not maintainable.

23. It is useful to quote the judgment of Hon’ble Supreme Court in

Kalamani Tex & Anr. v. P. Balasubramanian (2021) 5 SCC 283, where in it was held that the NI Act mandates that once the signatures of an accused on the cheque/Negotiable instrument are established then these “reverse onus” clauses become operative. In such a situation the obligation shifts upon the 9 Fair Judgment in CC-NI 7476 of 2022 accused to discharge the presumption imposed on him. Due to such admission, the presumption under section 139 of the N.I. Act that there exists a legally enforceable debt or other liabilty arose in the favor of the complainant.

24. It is useful to quote the judgment of Hon'ble Apex Court Rangappa v. Sri

Mohan, (2010) 11 SCC 441 where in it was held that the when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of “preponderance of probabilities”. Therefore, if the accused is able to raise a probable defence which creates doubt about the existence of a 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 a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his own.

25. No where in the evidence the accused denied her signature on

Ex.P15,P17,P19 cheques, so as per the above judgment of Hon’ble supreme court and upon the presumptions the burden is on the accused to prove that the she did not issue subject cheque in discharge of legally enforceable liability. Therefore, the presumption envisaged under section 118 read with section 139 of NI Act would operate in favour of the complainant.

26. PW1 in his chief affidavit stated that “the complainant is a Pvt. Ltd., company registered under the Registration of Companies Act 1956, having their Registered Office at Plot No.41 & 53, Survey No: 165 & 166, Industrial

Park, Phase-III, Pashamylaram, Patancheru Mandal, Sangareddy District. The present complaint is being filed by me in the capacity of Manager as I am fully aware about the day to day affairs of the company. I am duly empowered to depose, as per the Board Resolution dated 20.07.2022. I submit that, we 10 Fair Judgment in CC-NI 7476 of 2022 deal in the business of wheat, wheat products, manufacturing of Atta, Maida,

Rava, Suji etc and supplying the same to various wholesaler and retailers on cash and credit basis. I state that during the course of our business, the accused has approached the complainant and requested the complainant to supply the above said products. As per the request of the accused, the complainant has supplied the above said products to the accused through 6 invoices as mentioned below

INVOICE NO. DATE AMOUNT

BOS00445021.11.18Rs. 1,48,260/- BOS00456825.11.18Rs. 1,974/- BOS00471203.12.18Rs. 2,05,750/- BOS00481410.12.18Rs. 1,52,450/- BOS00500719.12.18Rs. 2,43,630/- BOS00518026.12.18Rs. 75,900/-

TOTAL Rs. 8,27,964/-

I state that, on persistent demands made by the complainant, the accused has issued 3 cheques bearing Nos:250208, 250205 & 250204 dated 04.01.2019, 06.01.2019 & 11.01.2019 for Rs.2,05,750/- for Rs.2,38,757/- and Rs.1,52,450/ - respectively amounting to Rs. 5,96,957/-, all were drawn on Syndicate Bank, Peerzadigua Branch, Ranga Reddy, towards part payment of legally enforceable valid debt. I further state that, as per the instructions of the accused, the complainant has presented the above mentioned three cheques in their account with HDFC Bank Ltd, Barkatpura Branch,

Hyderabad, wherein the complainant is holding their account. But to the surprise of the complainant, all the three cheques have been dishonoured with an endorsement as "FUNDS INSUFFICIENT" vide Cheque Return Memos all dated 03.04.2019. Immediately the complainant has informed the accused about the said cheating and fraudulent acts done by the accused and in turn requested the accused to pay the said amount of Rs.5,96,957/-, which the 11 Fair Judgment in CC-NI 7476 of 2022

Accused has intentionally failed to do so only to cause wrongful loss to the complainant and unlawful and illegal gain for the accused ”.

27. PW1 in his cross-examination deposed that “I do not know whether earlier representative filed his authorization to file the present case before this Court. It is true that except Ex.P2 I did not filed any document regarding authorization given to me by complainant to depose before this Court. It is not true to suggest that as the earlier representative not have proper authorization as such the complaint filed by him is not maintainable. It is not true to suggest that I am not competent to depose before this Court and that I do not have any personal knowledge about this transactions and that I am deposing false.”

28. Upon perusal of the record, it is observed that the initial complaint was filed by Mr. Shaik Muqthiar, which was allowed while taking cognizance by my predecessor. Later, on 22-11-2022, the complainant's counsel filed a substitution petition to substitute the present manager, Mr.B.Madhu, in place of Shaik

Muqthiar, and the petition was numbered as Crl.M.P.No.1277 of 2022. The present accused was given a chance to file a counter, but no counter was filed by the accused. After reviewing the petition, this court allowed the substitution petition on 14.12.2022, based on the authorization filed by the complainant.At the time of entertaining the petition accused did not take any objection but now, during the cross-examination stage, the accused has raised the defense that the complaint is not maintainable, as Shaik Muqthiar did not have proper authorization to file the complaint. However, upon reviewing Ex.P2, the authorization dated 20.07.2022, it is clearly stated in Ex.P2 that "the previous

Manager Mr. Shaik Muqthiar has resigned from the company and the company has authorized the present Manager Mr. Bidekani Madhu, S/o. Mr. Bidekani Galappa, to represent the company in all legal proceedings, to file civil and criminal cases, to 12 Fair Judgment in CC-NI 7476 of 2022 engage any advocate, to sign the Vakalatnama, to give evidence, to enter into any compromise, settlements as he may consider appropriate in the interest of the company from time to time etc., against M/s. Shiva Sagar Agro Foods". More importantly, upon perusal of the case record, it is observed that during the time of filing the complaint, the complainant had submitted Xerox copies of the case documents. In these documents, it is observed that M/s. Clarion Agro Products

Private Ltd had authorized the initial complainant, Shaik Muqthiar, on 14-05- 2019. This authorization was signed by the director, Mr. Kanishka Gupta, who also signed Ex.P2. Hence, the objection raised by the accused is not maintainable, as the company director himself had given authorization to their managers during their tenure while they were working as managers. Although the complainant failed to file the initial complainant’s authorization , the statement made in Ex P2 and the copies placed in the case record are sufficient to show that the complaint is maintainable.

29. PW1 in his cross-examination deposed that “It is true that I did not file any document to show that there was a agreement in between accused and the complainant company. It is true that I did not file any purchase orders placed by the accused to the complainant company. It is true that Ex.P4, P6, P8, P10, P12 and P14 are the invoices generated from the complainant company’s computer systems. It is true that the my signatures and the signatures of accused are does not appearing on Ex.P4, P6, P8, P10, P12 and P14. It is true that in Ex.P6 invoice, the amount of Rs.1,03,710/- is shown and in Ex.P21 and in my chief affidavit the amount is shown as Rs.1,974/- as per the said invoice. Witness adds that as the part amount was paid by the accused pertaining to Ex.P6 invoice, as such the remaining balance amount is shown as Rs.1,974/- in legal notice and in his chief affidavit. It is true that how much amount received from the accused is not mentioned in Ex.P27 Statements of account. Accused paid 13 Fair Judgment in CC-NI 7476 of 2022 part amount to Ex.P6 to our company through cheque. It is true that it is not mentioned in complaint about the part payment made by the accused to the complainant to Ex.P6 by way of cheque. It is not true to suggest that as there are inconsistency with regard to the amounts mentioned in the complaint and in invoices, as such Ex.P27 is fabricated document and filed before this Court. It is true that the signature of accused is not appearing on Ex.P27. Witness confronted with Ex.P27, he stated that signature appearing on Ex.P27 as “Ash” is belongs to accused. It is true that the signatures appearing on the subject cheques and the signature appearing on Ex.P27 are different. ”

30. Before delving into the details of the exhibits, it is important to note the statements made by the accused during her examination under Sections 251 and 313 of the CrPC. Under Section 251 CrPC, the accused stated that she never issued the subject cheques to the complainant and never bought any products from the complainant. However, during her Section 313 examination, she stated that she had issued the subject cheques as security and claimed that she was not liable to pay any amount to the complainant. These statements are contradictory to each other. On one hand, she claims to have provided the subject cheques as security for business purposes, which implies that she is the proprietor of M/s.

Shiva Sagar Agro Foods. Nowhere in her entire evidence does she deny running her business under the name of M/s.Shiva Sagar Agro Foods. It is observed from the Cause title that her husband's name is Mr.Ashok, and even in her personal bond submitted in the court, she mentioned her husband's name as Ashok.

During the cross-examination of PW1, the complainant admitted that the accused studied upto 10th standard in Telugu medium, and the accused suggested that she does not know English. Therefore, the contents of the subject cheques were not filled in by her. As a purdent man person, it is difficult to believe that in today's competitive business environment, a woman with a 10th 14 Fair Judgment in CC-NI 7476 of 2022 grade education would be able to independently run a company without significant moral support from her husband. Furthermore, the account statement in Ex.P27 shows that the signature on the document was made by her husband which further suggests that his involvement in the business operations.

31. The accused argues that there is an inconsistency between the amounts in the invoices and the statement of account. In the general course of business, as per Section 31(3)(c) of the Central Goods and Services Tax Act, 2017, the invoice(bill of supply) will only bear the signature or digital signature of the supplier or their authorized representative, but there is no requirement for the recipient's signature. During cross-examination, PW1 testified that Ex.P6 reflects an invoice generated for an amount of 1,03,710/-. PW1 also stated that the₹ accused made a partial payment related to Ex.P6. The accused claims that there is a discrepancy regarding the amounts. However, as per Ex.P27, the pending amount is shown as ₹1,974/-. As discussed earlier, Ex.P27 contains the signature of Mr. Ashok. Therefore, this court finds that after admitting to the liablity only Mr.Ashok the husband of the accused signed on it.

32. Hence, after observing all these facts, this court is of the view that the accused has raised these defenses to avoid the legally enforceable debt, which are not sustainable. If the accused claims that the cheques were misused by the complainant, and they were given as security, it is hard to believe that a prudent business person would issue a blank cheques as security without the existence of any business transactions. If the accused’s case is that the complainant misused the cheques, why were no steps taken by the accused to retrieve the cheques, why was no demand notice sent to the complainant, and why was no legal action initiated by the accused. It is also important to note that the cheques were dishonored due to "insufficient funds" but not as "payment stopped by the drawer." If her claim was true why did the accused not instructed her bank to 15 Fair Judgment in CC-NI 7476 of 2022 stop payments of these cheques. All these points raises an adverse inference under section 114 of Indian Evidence Act regarding her actions.

33. Whereas the complainant, through his documents Ex.P3 to P14, demonstrates the bill of supply of goods to M/s. Shiva Sagar Agro Foods. All the invoices are electronic documents, duly supported by certificates under Section 65 of the Indian Evidence Act. Ex.P23 further demonstrates that the goods were supplied to M/S Shiva Sagar Agro Foods. Since the accused has not provided any substantial evidence to rebut the presumption, the court believes the complainant's version that the accused owed 8,27,964/- to the complainant. In₹ discharge of this liability, the accused issued the subject cheques totaling ₹5,96,957/-. As discussed earlier, this is corroborated by the signature of the accused's husband.

34. From the facts at hand, it is abundantly clear that the accused could not raise a probable doubt regarding the existence of a legally enforceable debt by rebutting the presumption available to the complainant under

Sec.139 of the NI Act. No evidence was presented by the accused to rebut the presumption available to the complainant. Although it was argued and asserted that subject cheques was given as security, not even an iota of evidence was provided to substantiate this contention raised by the accused in order to counter the presumption under Sec.139 of the NI Act. The complainant successfully proved his case, demonstrating that the cheques was issued in discharge of a legally enforceable debt. On the other hand, the complainant established his case by proving the existence of debt and the issuance of the cheques in discharge of the legally enforceable debt by the accused. Beyond a denial regarding the existence of a legally enforceable debt, the accused presented no cogent evidence.

16 Fair Judgment in CC-NI 7476 of 2022

35. For the aforesaid reasons and findings in Points No.I to III, I proceed to pass the following:-

In the result, the accused is found guilty for the offence punishable

U/Sec.138 of NI Act.

Typed to my dictation to copyist, corrected and pronounced by me in

the open court on this 06 th day of September, 2024.

VII JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

36. Though as per section 255 of Criminal Procedure Code, hearing of the accused on the quantum of sentence is not within the ambit of the said section. Though the section does not manifest on hearing of the accused on quantum of sentence, still this court is of an opinion that the accused must be given an opportunity for hearing him on the quantum of sentence while imposing punishment in the interest of Justice and to meet the ends of justice.

37. The accused is heard on the quantum of sentence. She submitted that she has three children and a family to look after. She also stated that she suffers from high blood pressure, diabetes, and thyroid issues, and that she requires frequent medical treatment. The accused pleaded for mercy and requested the court to take a lenient view.

38. The cheque amount in this case is Rs.5,96,957/- and twice the amount of cheque would come to Rs.11,93,914/- and the court can impose fine on the accused up to Rs.11,93,914/-.

39. In the result, the accused is found guilty for the offence punishable

U/Sec.138 of the Negotiable Instrument Act and consequently she is 17 Fair Judgment in CC-NI 7476 of 2022 convicted U/sec.255(2) of the Code of Criminal Procedure and sentence to pay Rs. 6,55,000/-. Out of the total amount of Rs.6,55,000/-, Rs.5,000/- shall be paid to the State as fine and the remaining amount of Rs.6,50,000/- shall be paid to the complainant as compensation U/Sec.357(1)(b) Cr.P.C.

within one month and in default to undergo simple imprisonment for a period of six months.A free copy of Judgment shall be given to the accused as per

Sec.363 Cr.P.C r/w Rule 72 of Criminal Rules of Practice and Circular Orders, 1990. The accused has not undergone any remand period during trial to set off U/s. 428 of Cr.P.C.

Typed to my dictation to copyist, corrected and pronounced by me in the open court on this 06 th day of September, 2024.

VII JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

A PPENDIX O F E VIDENCE

W ITNESSES E XAMINED

F OR C OMPLAINANT

PW1 - Bidekani Madhu

F OR D EFENSE

Nil

E XHIBITS M ARKED

F OR C OMPLAINANT :

Ex.P1 :Certificate of Incorporation & Memorandum and Articles of Association dt.20.10.2008.

Ex.P2 :Board Resolution dt.20.07.2022.

Ex.P3 :Sec.65B of IE Act Certificate, dt.10.03.2023.

EX.P4 :Invoice No.BOSOO4450 (2 pages), dt.21.11.2018 through Ex.P3.

Ex.P5 :Sec.65B of IE Act Certificate, dt.10.03.2023.

Ex.P6 :Invoice No.BOSOO4568 (2 pages), Dt.25.11.2018 through Ex.P5.

Ex.P7 :Sec.65B of IE Act Certificate, dt.10.03.2023.

18 Fair Judgment in CC-NI 7476 of 2022

Ex.P8 :Invoice No.BOSOO4712 (2 pages), Dt.03.12.2018 through Ex.P7.

Ex.P9 :Sec.65B of IE Act Certificate, dt.10.03.2023.

Ex.P10 :Invoice No.BOSOO4814 (2 pages), Dt.10.12.2018 through Ex.P9.

Ex.P11 :Sec.65B of IE Act Certificate, dt.10.03.2023.

Ex.P12 :Invoice No.BOSOO5007 (2 pages), Dt.19.12.2018 through Ex.P11.

Ex.P13 :Sec.65B of IE Act Certificate, dt.10.03.2023.

Ex.P14 :Invoice No.BOSOO5180 (2 pages), Dt.26.12.2018 through Ex.P13.

Ex.P15 :Cheque bearing No.250208, dt.04.01.2019 for Rs.2,05,750/-

Ex.P16 :Cheque Return Memo, dt.03.04.2019.

Ex.P17 :Cheque bearing No.250205, dt.06.01.2019 for Rs.2,38,757/-

Ex.P18 :Cheque Return Memo, dt.03.04.2019.

Ex.P19 :Cheque bearing No.250204, dt.11.01.2019 for Rs.1,52,450/-

Ex.P20 :Cheque Return Memo, dt.03.04.2019.

Ex.P21 :office copy of Legal Notice, dt.19.04.2019.

Ex.P22 :Postal Receipts (2 Nos), dt.19.04.2019.

Ex.P23 :Courier Receipts (2 Nos), dt.19.04.2019.

Ex.P24 :Track Report, dt.22.04.2019.

Ex.P25 :Postal Acknowledgment Card, dt.29.04.2019.

Ex.P26 :Sec.65B of IE Act Certificate, dt.10.03.2023.

Ex.P27 :Statement of Account through Ex.P26.

For Accused:

- Nil -

VII JUDICIAL MAGISTRATE OF FIRST CLASS

HYDERABAD

Fair judgment copy in C C NI No. 2423 of 2022

IN THE COURT OF THE IX METROPOLITAN MAGISTRATE, MANORANJAN

COMPLEX, NAMPALLY, HYDERABAD

PRESENT: Kum.Goolla Spandana, VII Metropolitan Magistrate. FAC: IX Metropolitan Magistrate. Hyderabad

Wednesday, 17th Day of January, 2024

CC.NI No.2423 of 2022

(Old CC.No.15710 of 2019)

BETWEEN: M/s. D. Badri Vishal & Co., proprietor, Mrs. Shoba Agarwal, W/o. Badri Vishal, age: 60 years, office at: 4-56, 1st floor, Vikas Nagar, Dilsukhnagar, Hyderabad – 60. Rep., by her SPA holder Sri Badri Vishal S/o. Late Devi Prasad, Age: 66 years, Occ: Business, R/o. 16-11-511/D/255, Shalivaharana Nagar, Moosrambagh, Hydeerabad – 36.

.... Complainant

AND

1. M/s. RVS Agro Commodities, rep., by its proprietor Mr. K. Selvamani Old No. 4, New 9, Maduraisamy, Madam East Street, Permbur, Chennai, Tamilnadu – 600011.

2. K. Selvamani, S/o. Not known, Age: Major, Occ: Proprietor of M/s. RVS Agro Commodities, Office at: Old No. 4, New 9, Maduraisamy, Madam East Street, Perambur, Chennai, Tamilnadu – 600011.

.... Accused No. 1 and 2

Offence Under Section 138 of Negotiable Instrument Act

This case is coming up before me for a final hearing on presence of Sri.

Peddakula Papaiah Counsel for the complainant and of Sri. H. Gowri Shankar,

Counsel for accused and having heard and having stood over for consideration, this court delivered the following:

Fair judgment copy in C C NI No. 2423 of 2022 2

J U D G M E NT

This is a private complaint filed against the above named accused No.

1 & 2 for Act. The offence punishable under Section 138 of Negotiable

Instruments. (hereinafter be referred to as N. I. Act)

The complainant’s case in brief is as follows:

1. The complainant herein is running a proprietorship firm under the name and style M/s. D. Badri Vishal & Co., having its office at 4-56, First

Floor, Vikas Nagar, Dilsukhnagar Hyderabad – 500060, dealing in supply of commercial feed supplements and other items etc., pertaining to commercial (poultry/aqua/cattle) field. The accused No. 2 introduced himself as proprietor of Accused no. 1 firm through email, dated 13.03.2018 and asked the complainant details to place the PO (Purchase order). Accordingly as per the accused request the complainant shared his business details to accused

No. 2. Thereafter the accused No. 2 being proprietor of Accused No. 1 company placed the purchase orders such as ie., 1. PO No. 121, dated 13.03.2018 to supply the DORB (De-oiled Rice bran) worth Rs.11,10,000/- in 100 Metric

Tons quantity, 2. PO. No. 122, dated 14.03.2018 to supply Ground nut oil cake, worth Rs.7,87,500/- in 25,000 Metric Tons and 3. PO No. 124, dated 23.03.2018 to supply Ground nut oil cake worth Rs.13,72,800/- in 44,000 metric tons. Upon accused no. 2 request the complainant supplied the products as sought through email based on availability basis to Bhimavaram,

Andhra Pradesh and raised the invoices ie., 1. Invoice No. 51, dated 14.03.2018 of DORB (De-Oil Rice bran) worth Rs.2,40,426/- in 21.660 metric tons, 2. Invoice No. 53, dated 16.03.2018 of Ground Nut Oil Cake worth

Rs.6,52,065.75ps in 21.790 metric tons, 3. Invoice No. 60, dated 26.03.2018 of Ground Nut Oil Cake worth Rs.7,61,155.20 in 25.680 metric tons and

Fair judgment copy in C C NI No. 2423 of 2022 3

4. Invoice No. 61, dated 26.03.2018 of Ground Nut Oil Cake worth

Rs.6,36,370.80/- in 21.470 metric tones in total Rs.22,90,017.75ps.

2.The accused no. 2 had to pay the balance amount of Rs.8,33,341.95ps after deducted the transport charges of Rs.1,93,437.80ps, Rs.6,01,638/- and

Rs.6,61,600/- material returned charges out of total Rs. 22,90,017.75ps to the complainant. The accused evaded to enforceable debt on one pretext or the other whenever the complainant demanded. On repeated request made by the complainant finally the accused issued a three cheques i.e, Cheque bearing no. 000062, dated 28.12.2018, 2. Cheque bearing No. 000064, dated 29.12.2018 and 3. Cheque bearing No. 000065, dated 25.12.2018 each for

Rs.2,00,000/- duly drawn on ICICI Bank, Boradway Branch, Chennai towards partially discharge of the outstanding amount and assured the complainant that the cheque would be honoured on its presentation. The complainant presented the above said three cheques with his banker i.e., M/s. HDFC Bank

Limited, Malakpet Dilsukhnagar Branch for encashment, but to his surprise the same cheque was returned as dishonoured with an endorsement “Payment stopped by Drawer” vide cheques return memos, dated 06.03.2019.

3. The complainant after receipt of the cheque return memo’s got issued a legal notice, dated 11.03.2019 to the accused through RPAD on 14.03.2019.

The notice sent to accused was served on 18.03.2019. In spite of the said legal notice the accused deliberately failed/neglected to pay the impugned cheque amout towards discharge of a legally enforceable liability, thus rendering itself liable to be prosecuted under Negotiable Instruments Act 1881, as amended by the Banking, Public Financial Institutions and Negotiable Instruments

Laws (Amendment) Act, 1988 and prayed this Hon’ble Court to pass an order for payment of fine amount / compensation imposed, if any to the complainant under section 357 of Cr.P.C towards the cheque amount.

Fair judgment copy in C C NI No. 2423 of 2022 4

4.The complainant filed the present complaint for offence U/Sec., 138 of N I

Act before the Hon’ble VII Additional Chief Metropolitan Magistrate, Nampally,

Hyderabad on 29-04-2019 and numbered as C. C, No. 15710/2019 and the same was transferred to the VIII Special Magistrate Court, Hyderabad vide

Dis. No. 6757/MSJ/OPCELL/2019, dated 16.11.2019 and renumbered as

C.C. No. 453/2019.

5. Upon the appearance of the accused, he was provided with a copy of the complaint and other relevant documents under Section 207 of the

Code of Criminal Procedure (Cr.P.C.). At this stage, as per the proceedings of the Hon’ble Metropolitan Sessions Judge, Hyderabad, vide Dis. No.

1319/2021, dated 31.03.2021 the case is again transferred to the Hon’ble

VII ACMM, Hyderabad and restored as C. C. No. 15710/2019 and subsequently re-transferred to this court vide Dis. No. 4177/2021, dated 14.12.2021 at the stage of 251 Cr.P.C examination duly re-numbered as

C C NI No. 2423 of 2022.

6.The accused was examined under Section 251 of the Cr.P.C., where he denied the accusations, pleaded not guilty, and claimed to be tried for the said offense and posted for trial.

7. To prove the guilty of the accused, the complainant got examined himself as PW.1 and got marked Ex.P1 to Ex.P29 as documentary evidence.

1. Ex P1 is the copy of self attested GST registration certificate in the name of M/s. Badri Vishal & Co., dated 22.02.2018.

2. Ex P2 is the original purchase order No. 121, dated 13.03.2018

3. Ex P3 is the original purchase order No. 122, dated 14.03.2018

4. Ex P4 is the original purchase order No. 124, dated 23.03.2018

Fair judgment copy in C C NI No. 2423 of 2022 5

5. Ex P5 is the original Invoice No. 51, dated 14.03.2018

6. Ex P6 is the original Invoice No. 53, dated 16.03.2018

7. Ex P7 is the original Invoice No. 60, dated 26.03.2018

8. Ex P8 is the original Invoice No. 61, dated 26.03.2018

9. Ex P9 is the ledger statement of M/s. RVS Agro Commodities for the period of 01.04.2018 to 31.03.2019 in the books of the complainant.

10. Ex P10 is the original cheque No. 000062, dated 28.12.2018 for

Rs.2,00,000/- drawn on ICICI Bank Broadway branch, Chennai.

11. Ex P11 is the original cheque No. 000064, dated 29.12.2018 for

Rs.2,00,000/- drawn on ICICI Bank Broadway branch, Chennai.

12. Ex P12 is the original cheque No. 000065, dated 25.12.2018 for

Rs.2,00,000/- drawn on ICICI Bank Broadway branch, Chennai.

13. Ex P13 is the Original cheque return memo, dated 06.03.2019 of cheque NO. 000062.

14. Ex P14 is the Original cheque return memo, dated 06.03.2019 of cheque NO. 000064.

15. Ex P15 is the Original cheque return memo, dated 06.03.2019 of cheque NO. 000065.

16. Ex P16 is the office copy of the Legal Notice, dated 11.03.2019.

17. Ex P17 is the office copy of the Legal Notice, dated 11.03.2019.

18. Ex P18 is the office copy of the Legal Notice, dated 11.03.2019.

19. Ex P19 is the registered post slip, dated 14.03.2019 (6 Nos.)

20. Ex P20 is the acknowledgement and postal track report, dated 18.03.2019 (6 in number).

21. Ex P21 is the original letter dated 02.04.2019.

Fair judgment copy in C C NI No. 2423 of 2022 6

22. Ex P22 is the E-mails correspondence between the complainant and accused, dated 13.03.2018 (3 in number).

23. Ex P23 is the E-mails correspondence between the complainant and accused, dated 14.03.2018.

24. Ex P24 is the E-mails correspondence between the complainant and accused, dated 16.03.2018 .

25. Ex P25 is the E-mails correspondence between the complainant and accused, dated 23.03.2018.

26. Ex P26 is the E-mails correspondence between the complainant and accused, dated 27.03.2018.

27. Ex P27 is the E-mails correspondence between the complainant and accused, dated 02.07.2018.

28. Ex P28 is the Special Power of attorney executed by Mrs. Shoba

Agarwal to Badri Vishal, dated 26.04.2019.

29. Ex.P29 Certificate under section 65B of Indian Evidence Act.

8.PW1 was cross-examined by the learned counsel of the Accused. For brevity and to avoid repetition, the relevant aspects of the cross- examination are discussed while appreciating the evidence. After the closure of the complainant’s evidence, the accused is examined U/Sec.313

Cr.P.C r/w 281 of Cr.P.C. The incriminating evidence appeared against him deposed by PW.1 was explained to him for which he denied the truthfulness of evidence.

9.After 313 Cr. P. C examination the accused reported no defence evidence, the matter posted for arguments. At this stage Complainant counsel filed Section 311 Cr.P.C to reopen and recall the evidence of PW1

Fair judgment copy in C C NI No. 2423 of 2022 7 and same is allowed. Ex P-29 is marked in further chief examination and he was further cross examined. Then the matter posted for arguments.

10. Heard the arguments on behalf of both sides and perused the record.

11. The learned counsel for complainant filed the citations and the counsel for the accused filed the written arguments and the same are taken into consideration. After having heard the arguments on both sides, the following points that arise for determination are as follows:-

Now the point for determination is that

I. Whether the complainant has complied with the essential ingredients of Section 138 of NI Act ?

II. Whether the accused rebutted the presumption under section 118 & 139 of NI Act?

III. Whether the complainant could establish that the cheques

Ex.P10,P11 and P12 were issued for legal enforceable debt and that the accused committed an offence under section 138 of NI Act ?

IV. To what order ?

12. Before adjudicating the points for determination whether the cheque was issued in discharge of any existing debt or liability by the accused in favour of the complainant and whether the accused could rebut the presumption available to the complainant under the Act. It would fit thing to draw attention on section 138,139 and 118 of NI Act for better appreciation of the facts of the case.

Conditions precedent for constituting an offence under S. 138 of NI Act

13.There are five distinct conditions precedent, which must be satisfied

before the dishonour of a cheque can constitute an offence and become

punishable.

Fair judgment copy in C C NI No. 2423 of 2022 8

(i) The cheque ought to have been presented to the bank within a period 6 months (3 months as per RBI vide Circular RBI/2011-12/251

DBOD AML BC No. 47/14.01.001/2011-12, dated 4-11-2011) from the date on which it is drawn or within the period of its validity, whichever is earlier.

(ii) That the cheque was drawn from the account of the accused bank for discharge in whole or in part of any debt or other liability which pre- supposes a legally enforceable debt and

(iii) The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;

(iv) The payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.

(v) The drawer of such a cheque should have failed to make payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within 15 days of the receipt of the said notice.

The proviso appended of legal requirements before a complaint or a petition can be acted upon by a court of law.

It is only upon the satisfaction of all the five conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a),(b) and (c).

Along with the conditions to be fulfilled as stipulated under Section 142 NI Act to take the cognizance against the offence under Section 138.

Fair judgment copy in C C NI No. 2423 of 2022 9

Presumptions

14.The Negotiable Instrument Act contains provisions raising presumptions as regards the negotiable instruments under section 118(a) of the Act as also under section 139 of Negotiable Instrument Act. The said presumptions are rebuttal. Whether the presumption is rebutted or not would depend upon facts and circumstances of each case.

15.Under Section 118 of Negotiable Instrument Act, unless the contrary is proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under section 139 of

Negotiable Instruments Act, the Court has to presume, unless the contrary was proved, that the cheque or holder of the cheque received the cheque for discharge, in whole or in part of a debt or liability. Thus in complaints under section 138 of Negotiable Instruments Act, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttal.

However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused.

Point No I

16. The case of the complainant is that the accused issued cheque in discharge of his liability and when the cheque Ex.P10, Ex P11 and Ex P12 were presented in bank, it was returned for the reason “Payment stopped by

Drawer” on 06.03.2019 and statutory notice dated 11.03.2019 was issued to the accused and despite receiving the legal notice on 18.03.2019. The accused failed to repay the amount stated in the cheque within the specified time frame. The complaint was filed on 29.04.2019 and it is within the limitation, coming to the territorial jurisdiction compliance of section 142 of NI Act.

Fair judgment copy in C C NI No. 2423 of 2022 10

Ex.P10, Ex P11 and ex P12 were drawn at complainant’s ICICI Bank and it was presented in the complainant’s bank ie., HDFC Bank Limited, Malakpet,

Dilsukhnagar, Hyderabad which comes within the limits if P.S.Malakpet,

Hyderabad and which comes under this Court’s jurisdiction.

17. Hence point I is answering in favour of complainant and against accused.

POINT II and III :

18. For convenience sake, this court feel it desirable to discuss these two points together to avoid repetition in discussing the evidence that has come on record before the court on behalf of both the parties.

19. During the course of trial, the complainant having invoked the provisions of section 145(1) of Negotiable Instruments Act, filed his affidavit with a prayer to treat the same as his examination in chief and the same plea was permitted.

20. To substantiate the complainant's case, the complainant himself testified himself as PW1. Additionally, Ex.P1 to P29 were marked as his documentary evidence.

21. It is useful to quote the judgment of Hon’ble Supreme Court in

Kalamani Tex & Anr. v. P. Balasubramanian (2021) 5 SCC 283, where in it was held that the NI Act mandates that once the signatures of an accused on the cheque/Negotiable instrument are established then these “reverse onus” clauses become operative. In such a situation the obligation shifts upon the accused to discharge the presumption imposed on him. Due to such

Fair judgment copy in C C NI No. 2423 of 2022 11 admission, the presumption under section 139 of the N.I. Act that there exists a legally enforceable debt or other liabilty arose in the favor of the complainant.

22. It is useful to quote the judgment of Hon'ble Apex Court Rangappa v.

Sri Mohan, (2010) 11 SCC 441 where in it was held that the when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of “preponderance of probabilities”. Therefore, if the accused is able to raise a probable defence which creates doubt about the existence of a 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 a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his own.

23. No where in the evidence the accused denied his signatures on Ex.P10-

P12 cheques. So as per the above judgment of Hon’ble supreme court and upon the presumptions the burden is on the accused to prove that the subject cheque is not related to this transaction.

24. The accused presented the following defenses during the trial.

He did not receive any material from the PW1 company and that there is no legally enforceable debt.

25. PW1 in his chief examination stated that “ I, Badri Vishal So late Devi

Prasad, Age 66 years, Occupation: Business, R/o 16-11-511/D/255,

Shalivahana Nagar, Moosrambagh, Hyderabad-36, as special power of attorney holder of Shobha Agarwal, who is my wife and the Proprietor of the complainant proprietorship firm under the name and style

Fair judgment copy in C C NI No. 2423 of 2022 12

M/S. D.Badri Vishal & Co., dealing in supply of Commercial feed supplements and other items etc., pertaining to commercial (poultry/aqua/cattle) field. I submit that, the accused No.2 who is the proprietor of the accused No.1, vide E-mail dated 13-03-2018, requested the complainant to furnish the complete details about the complainant to raise the Purchase Order and accordingly on such request, through reply

E-mail, dated 13-03-2018, the complainant shared the business details with the accused and thereafter, the accused placed the following purchasers instructing the complainant to be delivered the material to his agent at Bhimavaram, Andhra Pradesh.

1. PO No. 121, dated 13.03.2018 to supply the DORB (De-oiled Rice bran) worth Rs.11,10,000/- in 100 Metric tons quantity,

2. PO. No. 122, dated 14.03.2018 to supply Ground nut oil cake, worth Rs.7,87,500/- in 25,000 Metric tons and

3. PO No. 124, dated 23.03.2018 to supply Ground nut oil cake worth

Rs.13,72,800/- in 44,000 metric tones.

I submit that, I supplied the above products based on availability basis to Bhimavaram, in Andhra Pradesh and raised invoices. The accused vide email dated 27-3-2018 had confirmed us about the receipt of the invoices. The details of the invoices are as follows: ie.,

1. Invoice No. 51, dated 14.03.2018 of DORB (De-Oil Rice bran) worth

Rs.2,40,426/- in 21.660 metric tones,

2. Invoice No. 53, dated 16.03.2018 of Ground Nut Oil Cake worth

Rs.6,52,065.75ps in 21.790 metric tones,

3. Invoice No. 60, dated 26.03.2018 of Ground Nut Oil Cake worth

Rs.7,61,155.20 in 25.680 metric tones and

Fair judgment copy in C C NI No. 2423 of 2022 13

4. Invoice No. 61, dated 26.03.2018 of Ground Nut Oil Cake worth

Rs.6,36,370.80/-in21.470metrictonesintotal

Rs.22,90,017.75ps.

I humbly submit that, from the above amount of Rs.22,90,017.75/- a sum of Rs. 1,93,437.80/- is deducted towards transportation & GST, leaving balance amount of Rs. 20,96,579.95/- to be paid by the accused within 2 days from the date of delivery. The accused by the end of 31st

March 2018, paid a sum of Rs.6,01,638/- leaving balance amount of Rs.

14,94,941.95/- In the month of April 2019, the accused paid a further sum of Rs. 1,00,000.00 and material worth Rs.5,61,600/- was returned by the accused. Thus, after deduction of Rs.6,61,600/- i.e., ( Rs.5,61,600/- +

Rs.1,00,000/-) from out of the balance amount of Rs.14,94,941.95/- the accused is still liable to pay a sum of Rs.8,33,341.95/- to us. Later, whenever the complainant has requested the accused to make the said payment, the accused procrastinated to pay the amount on one pretext or the other, but finally, after repeated follows ups through mails and oral communication over phone, the accused, towards part payment, has issued three cheques for Rs.6,00,000/-each for Rs.2,00,000/- under cheque bearing No.000062, dated 28-12-2018, No.000064, dated 29-12- 2018 and No.000065, dated 25-12-2018, drawn on ICICI Bank, Broadway

Branch, Chennai, and further assured that he would without fall make necessary arrangement of funds in his account to meet the requirement of the said cheque”.

25. PW1 in his cross-examination deposed that ”Accused was taken 21.77 metric tones DORB and approximately 69.00 GD Oil cake. The

Fair judgment copy in C C NI No. 2423 of 2022 14 supply of those products is of around rs. 22.00 lakhs. My son and my manager is looking after my business as per my instructions. I do not remember the quality of the material supplied to the accused. I have supplied the material as per specifications mentioned in Ex P2, Ex P3 and

Ex P4. I do not remember the protein percentage mentioned in the specifications of the said Ex P2, Ex P3 and Ex P4. I do not mentioned specifications in Complaint, legal Notice and chief Affidavit mentioned in

Ex P2, Ex P3 and Ex P4. It is true that I do not file the documents that to whom and to where the material supplied and I do not filed any receipt after delivery the material. It is incorrect to say that my son and the manager has taken the empty blanked singed cheques from the accused. It is incorrect to say that as I did not supply any material to the accused as such there is no legally enforceable debt on behalf of accused. It is incorrect to say that as my son and my manager look after my business I do not have any knowledge about the supply of material. It is true that Ex

P9 is not verified by the Chartered Accountant and the same is shown in my Income Tax. I did not remember whether the filed the balance sheet of the Income Tax Returns. It is incorrect to say that I am deposing false and it is not legally enforceable debt ”.

26. During Section 251 Cr.P.C examination, the accused stated that he is not liable to pay any amount to the complainant. Even in the Section 313 Cr.P.C examination, the accused claimed that he did not receive any material from the complainant company.

Fair judgment copy in C C NI No. 2423 of 2022 15

According to the evidence presented by PW1, he filed Ex.P28 to show that the proprietor of the complainant company has given special power of attorney and gave him authorization to represent the company. He admitted that he did not file any documents to demonstrate to whom the material was supplied, and he did not provide any receipts to show that the material was delivered to the accused. PW1 filed Ex.P1 to P29 to support his contentions. Ex.P2,P3 and P4 are the purchase orders,Ex.P5 to P8 are the invoice’s for the material supplied to the agent of the accused in Bhimavaram, and Ex.P9 is the ledger account maintained by PW1's company. Upon perusal of the record, it is evident that Ex.P16-P18, a legal notice, was served to the accused vide Ex.P19, Additionally, PW1 filed

Ex.P20 to demonstrate that legal notice were served to the accused address. Upon reviewing the entire evidence, it is notable that the accused did not issue any reply to the legal notices received from the complainant.

Ex.P21 to P27 includes email conversations from the accused dated 13- 03-2018 to 02-05-2018 which are evident that the accused placed orders for the supply of material using his email ID to the complainant company's email ID. Numerous conversations have taken place regarding the material, order placement, and charges for the vehicle etc. In written arguments, the defense counsel contended that the email conversation

Ex.P21 to P27 should not be given importance as section 65B of the

Indian Evidence Act certificate has not been provided for it. But upon reviewing the records, it is evident that Ex.P21 to P27 comprises the email conversations, substantiated by Exhibit P29, which is the certificate under

Section 65B of the Indian Evidence Act. During cross-examination, no relevant questions were raised concerning the email conversation and

Fair judgment copy in C C NI No. 2423 of 2022

Ex.P29. In the cross-examination of PW1 , no substantial information was 16 elicited. The defense counsel's failure to raises questions regarding the email conversations also raises doubts . Furthermore, the accused did not specifically deny his phone number and the email ID and conversations during cross-examination. The accused also failed to explain as to show that he is not liable for the cheque amount and that cheques were issued as security to PW1. Moreover,he admitted the transaction between him and the PW1 but he did not demonstrate any payments made to PW1's company to disprove that he is liable for any legally enforceable debt.

27. From the above discussion it is clear that no evidence was led by the accused to substantiate the contentions raised by him in order to disprove the presumption U/s. 118 and 139 of N.I Act except suggestions and denial regarding existence of legally enforceable debt, no cogent evidence was brought on record by accused. Hence, he failed to rebut the presumption raised U/s. 118 and 139 of N.I Act. This Court has come to a conclusion that accused failed to convince this Court that Ex.P10 to P12 was not issued towards the discharge of legally enforceable debt.

28. Thus, point no ii and iii are decided against the accused and in favor of the complainant.

POINT IV

29. For the aforesaid reasons and findings in Points No.I to III, I proceed to pass the following:-

In the result, the accused is found guilty for the offence punishable

U/Sec.138 of NI Act and consequently he is convicted U/Sec.255(2) Cr.P.C.

Fair judgment copy in C C NI No. 2423 of 2022 17

Typed to my dictation to Typist, corrected and pronounced by me in the open court on this 17 th day of January, 2024.

Sd/-

VII METROPOLITAN MAGISTRATE

FAC IX METROPOLITAN MAGISTRATE

HYDERABAD

30. The accused absent on 17-01-2024. The counsel for the accused filed a petition under section 353(6) of the Cr.P.C., and the same was allowed.

The matter is adjourned to today to give the accused a chance to address the quantum of the sentence.

31. Though as per section 255 of Criminal Procedure Code, hearing of the accused on the quantum of sentence is not within the ambit of the said section. Though the section does not manifest on hearing of the accused on quantum of sentence, still this court is of an opinion that the accused must be given an opportunity for hearing him on the quantum of sentence while imposing punishment in the interest of Justice and to meet the ends of justice.

32. Accused called present today and the accused is heard on quantum of sentence, the accused has submitted that he is having two children and he is the sole bread winner of his family to look after. The accused had pleaded mercy and prayed this court to take lenient view .

33. The cheques amount in this case is Rs.6,00,000/- and twice the amount of cheque would come to Rs.12,00,000/- and the court can impose fine on the accused up to Rs.12,00,000/-.

Fair judgment copy in C C NI No. 2423 of 2022 18

34. In the result, the accused No. 1 & 2 are found guilty for the offence punishable U/Sec.138 of the Negotiable Instrument Act and consequently

A1 represented by A2 is convicted U/sec.255(2) of the Code of Criminal

Procedure and sentenced to undergo Simple Imprisonment for a period of

Six months and to pay amount of Rs. 6,10,000/- to the complainant and in default to undergo simple imprisonment for a period of two months.

Out of the total amount of Rs.6,15,000/-, Rs.5,000/- shall be paid to the

State as fine and the remaining amount of Rs.6,10,000/- shall be paid to the complainant as compensation U/Sec.357(1)(b)Cr.P.C within one month. A free copy of Judgment shall be given to the accused as per

Sec.363 Cr.P.C r/w Rule 72 of Criminal Rules of Practice and Circular Orders, 1990. The remand period if any undergone by the accused during trial shall be set off U/s. 428 of Cr.P.C.

Typed to my dictation to Typist, corrected and pronounced by me in

the open court on this 24 th day of January, 2024.

Sd/-

VII METROPOLITAN MAGISTRATE

FAC IX METROPOLITAN MAGISTRATE

HYDERABAD

A PPENDIX O F E VIDENCE

W ITNESSES E XAMINED

F OR C OMPLAINANT

PW1 D. Badri Vishal

F OR D EFENSE

Nil

Fair judgment copy in C C NI No. 2423 of 2022 Fair judgment copy in C C NI No. 2423 of 2022 19

E XHIBITS M ARKED

F OR C OMPLAINANT :

1. Ex P1 is the copy of self attested GST registration certificate in thenameof M/s. Badri Vishal & Co., dated 22.02.2018.

2. Ex P2 is the original purchase order No. 121, dated 13.03.2018

3. Ex P3 is the original purchase order No. 122, dated 14.03.2018

4. Ex P4 is the original purchase order No. 124, dated 23.03.2018

5. Ex P5 is the original Invoice No. 51, dated 14.03.2018

6. Ex P6 is the original Invoice No. 53, dated 16.03.2018

7. Ex P7 is the original Invoice No. 60, dated 26.03.2018

8. Ex P8 is the original Invoice No. 61, dated 26.03.2018

9. Ex P9 is the ledger statement of M/s. RVS Agro Commodities for the period of 01.04.2018 to 31.03.2019 in the books of the complainant.

10. Ex P10 is the original cheque No. 000062, dated 28.12.2018 for

Rs.2,00,000/- drawn on ICICI Bank Broadway branch, Chennai.

11. Ex P11 is the original cheque No. 000064, dated 29.12.2018 for

Rs.2,00,000/- drawn on ICICI Bank Broadway branch, Chennai.

12. Ex P12 is the original cheque No. 000065, dated 25.12.2018 for

Rs.2,00,000/- drawn on ICICI Bank Broadway branch, Chennai.

13. Ex P13 is the Original cheque return memo, dated 06.03.2019 of cheque NO. 000062.

14. Ex P14 is the Original cheque return memo, dated 06.03.2019 of cheque NO. 000064.

15. Ex P15 is the Original cheque return memo, dated 06.03.2019 of cheque NO. 000065.

16. Ex P16 is the office copy of the Legal Notice, dated 11.03.2019.

17. Ex P17 is the office copy of the Legal Notice, dated 11.03.2019.

Fair judgment copy in C C NI No. 2423 of 2022 20

18. Ex P18 is the office copy of the Legal Notice, dated 11.03.2019.

19. Ex P19 is the registered post slip, dated 14.03.2019 (6 Nos.)

20. Ex P20 is the acknowledgement and postal track report, dated 18.03.2019 (6 in number).

21. Ex P21 is the original letter dated 02.04.2019.

22. Ex P22 is the E-mails correspondence between the complainant and accused, dated 13.03.2018 (3 in number).

23. Ex P23 is the E-mails correspondence between the complainant and accused, dated 14.03.2018.

24. Ex P24 is the E-mails correspondence between the complainant and accused, dated 16.03.2018 .

25. Ex P25 is the E-mails correspondence between the complainant and accused, dated 23.03.2018.

26. Ex P26 is the E-mails correspondence between the complainant and accused, dated 27.03.2018.

27. Ex P27 is the E-mails correspondence between the complainant and accused, dated 02.07.2018.

28. Ex P28 is the Special Power of attorney executed by Mrs. Shoba

Agarwal to Badri Vishal, dated 26.04.2019.

29. Ex P29 is certificate under section 65B of Indian Evidence Act.

Exhibits Marked

For Accused:

Nil

Sd/-

VII METROPOLITAN MAGISTRATE

FAC: IX METROPOLITAN MAGISTRATE

HYDERABAD

// TRUE COPY //

1 Fair Judgment in CC-NI No.82 of 2022

IN THE COURT OF VII METROPOLITAN MAGISTRATE,

AT HYDERABAD

PRESENT :Goolla Spandana VII Metropolitan Magistrate, Hyderabad

Dated this the 1st day of November, 2022

CC – NI No. 82 of 2022

(Old CC No.194 of 2017 on the file of IX Special Magistrate, Hyd)

Between

Mr.G.Ashwin Kumar, S/o. G.Nageshwar Rao, Aged about 31 years, Occ: Business, R/o. H.No.2-2-1105/1/3/C/2, Tilaknagar,

Nallakunta, Hyderabad – 500 044....Complainant

And

Mr.M.Mahesh, S/o. Late M.Rama Krishna, Aged about 27 years, R/o. H.No.277/1, Gandhi Colony, Near YMCA, Ganesh Temple,

Picket, Secunderabad – 500 003....Accused

This Calender Case came before me for final hearing in the presence of Sri.C.Ramanajaneyulu, Advocate for the Complainant and of Sri.Kaleru Venkatesh, Advocate for the Accused and upon hearing the arguments on both sides and matter stood over for consideration till this date, this Court delievered the following;

:: J U D G E M E N T ::

1.The Complainant has filed a private complaint U/Sec. 200 of Cr.P.C against the accused alleging the commission of offence punishable under

Section 138 of the Negotiable Instrument Act (herein after be referred as

N.I Act).

2.The brief facts of the prosecution/complainant as per the allegations contained in the complaint are as follows;

The Complainant and accused are well acquainted with each other and due to the said acquaintance, the accused had approached the complainant and requested to arrange hand loan of Rs.1,00,000/- (Rupees

One Lakh only) and the accused promised to repay the same within a 2 Fair Judgment in CC-NI No.82 of 2022 period of two months. Believing the accused version, the complainant had arranged and paid Rs.1,00,000/- to accused on 26.10.2016 in cash. After lapse of said period, the complainant had approached the accused several times and demanded for repayment of said hand loan amount, but the accused had dragged the matter on one pretext or other and finally on persistent demands made by the complainant, the accused issued a cheque bearing No.521872 for Rs.1,00,000/- dated 11.01.2017 drawn on YES Bank

Ltd., Kukatpally branch, Hyderabad. The complainant presented the said cheque in his bank i.e., Andhra Bank, Bagh Amberpet branch on 12.01.2017 and on 18.01.2017 the said cheque was dishonoured with an endorsement “FUNDS INSUFFICIENT” and the same was received by complainant on 31.01.2017. The above cheque was issued by accused to discharge the legally enforceable debt of the hand loan amount but with a malafide intention the accused have issued the above cheque without arranging the funds in his bank. The complainant got issued legal notice through his counsel on 13.02.2017 through RPAD and the same was returned by an endorsement Unclaimed on 14.02.2017. Hence, the complainant filed the complaint. Upon consideration of the complaint and Sworn Affidavit and other documents, the cognizance as per Sec.190(1)(a) of Cr.P.C for the offence punishable under Section 138 of NI Act was taken by the Hon’ble

IV Additional Chief Metropolitan Magistrate, Hyderabad and as per the orders of Hon’ble Metropolitan Sessions Judge, Hyderabad the case is transferred to the Court of IX Special Magistrate, Hyderabad and numbered as CC No.194 of 2017. On appearance of accused, he is supplied with the copy of complaint and other material papers U/s. 207 Cr.P.C and examined U/s. 251 Cr.P.C. He denied, pleaded not guilty and claimed to be tried for the said offence and posted for trial.

3 Fair Judgment in CC-NI No.82 of 2022

3.To prove the guilty of the accused, the complainant got examined himself as PW.1 and Deekonda Srinivas as PW.2 and got marked Ex.P1 to

Ex.P8. After closure of the complainant’s evidence, the accused is examined U/Sec.313 Cr.P.C and he denied the incriminating evidence and did not adduce any defense evidence on his behalf. Ex.P1 is the Original

Promissory Note dt.26.10.2016, Ex.P2 is the Original Cheque bearing

No.521872, dt.11.01.2017 for Rs.1,00,000/- drawn on YES Bank Ltd.,

Kukatpally branch, Hyderabad, Ex.P3 is the Andhra Bank, Bagh Amberpet branch, Hyderabad Return Memo dt.18.01.2017, Ex.P4 is the office copy of

Legal Notice, dt.13.02.2017, Ex.P5 is the Postal Receipt, dt.13.02.2017,

Ex.P6 is the Postal Returned Cover, dt.24.02.2017, Ex.P7 is the Copy of

Aadhar Card of accused and Ex.P8 is the Copy of ID Card of accused (Ex.P7 and Ex.P8 are marked subject to objection as their originals are with the accused).

4.The PW.1 deposed in chief examination what all stated in the complaint and got marked Ex.P1 to Ex.P8.

5.The cross examination of PW.1 was recorded by my learned predecessor. In the Cross Examination by the Defence Counsel, PW.1 deposed that in Ex.P4 legal notice and in complainant he did not state the date, month and year of accused approaching him for loan and agreed to repay the amount within two months. He also did not state in the legal notice, complaint and in chief affidavit that the place where the accused asked for a loan, in whose presence the accused asked loan, the place where he lent the amount to the accused, in whose presence he lent the amount and from whom he arranged the amount. He did not lend amounts to others except to the accused. There were no money transactions of hand loan in between him and the accused prior to this transaction. He denied 4 Fair Judgment in CC-NI No.82 of 2022 the suggestions that he know that accused is residing in Amberpet for last 2 years and that the address stated in legal notice in which the mother of accused alone is residing and accused is not residing with her and that legal notice was sent to the address stated in the notice though he know that accused is not residing in that address. He did not file document to show that accused agreed to repay the amount within two months. He denied the suggestion that he lent Rs.20,000/- to the accused at interest 5% per month on Rs.100/- and that accused also paid interest for two months and that at the time of lending Rs.20,000/- he obtained blank signed cheque and blank signed promissory note from the accused and that without returning the cheque and promissory note he misused Ex.P1 and Ex.P2 and filed this false case. He also denied the suggestions that he filled up all the columns except signature in Ex.P2 cheque and that accused did not borrow from him and he did not lend Rs.1 lakh on 26.10.2016 and that he has no financial capacity to lend Rs.1 lakh and that accused did not issue promissory note Ex.P1 on 26.10.2016. He also denied the suggestions that the signature shown to him on all the pages of the complaint, two

Vakalathes executed by him in favour of his advocate are not his signatures and he created the ground of unclaimed with respect of Ex.P6 postal cover and notice was not sent to the address of accused and Ex.P2 cheque was not issued by accused towards discharge of legally enforceable debt and there are no legally enforceable debt in between him and accused and that he doing money lending business without having valid money lending license and that he lend the amount on interest to others and that he deposing false.

To strengthen his case, PW.1 got examined one Deekonda Srinivas as

PW.2 for the purpose of proving the lending of loan by PW.1 to the accused.

5 Fair Judgment in CC-NI No.82 of 2022

6.PW.2 Deekonda Srinivas supported the case of the PW.1 and spoken about the hand loan given by PW.1 to the accused in his presence in his chief affidavit.

7.The cross examination of PW.2 was recorded by my learned predecessor. In the cross examination by the defence counsel, PW.2 deposed that the denominations of cash in Rs.500/- notes were given to the accused and at the time of lending the amount, accused and his friend were present. He denied the suggestions that complainant did not lend Rs.1 lakh on 26.10.2016 to accused in his presence and that he is deposing false at the instance of complainant and he do not know the facts in his chief examination and on the affidavit prepared by the complainant he signed on it without knowing the contents and that there are no transactions between complainant and accused and that he is deposing false.

8.After closure of the complainant’s evidence, the accused was examined under Section 313 r/w 281 of Cr.P.C. The incriminating evidence appeared against him deposed by PW.1 and PW.2 was explained to him for which he denied the truthfulness of evidence stating that he had taken

Rs.20,000/- and repaid it and did not take back the cheques.

9.After 313 Cr.P.C, accused reported no defense evidence. Then the matter is posted for Arguments.

10.As per the proceedings of the Hon’ble Metropolitan Sessions Judge,

Hyderabad, this case is again transferred to this Court and this case is re- numbered as CC-NI No.82 of 2022.

11.Heard the arguments on behalf of both sides and perused the record.

The learned counsel for the accused filed citations and the same are taken into consideration. After having heard the arguments on both sides, now the point for determination is that 6 Fair Judgment in CC-NI No.82 of 2022

I. Whether the compalinant has complied with the requirements of giving notice to the accused in terms of clause(b) of Proviso of Section 138 of NI Act ?

II.Whether the complainant could establish that the cheque Ex.P.2 was issued for legal enforceable debt and that the accused comitted an offence under section 138 of NI Act ?

III.Whether the accused rebuttted the presumption under section 118 & 139 of NI Act ?

IV.To what order ?

Point No.1

12.The case of the complainant is that the accused issued cheque in discharge of loan of Rupees One lakh which was obtained by the accused on 26.10.2016, through cash and when the cheque Ex.P.2 was presented in bank, it was returned for the reason funds insufficient and statutory notice was issued to the accused and despite receipt of legal notice, the accused failed to repay the cheque amount within the stipulated time, therefore he is before the Court to prosecute the case against the accused under section 138 of NI Act.

13.Before dealing with the Point No.1, The complaint was filed on 15.03.2017 and it is within the limitation, coming to the teritorial jurisdiction, compliance of section 142 of NI Act. Ex.P.2 was presented in

Andhra Bank, Amberpet Branch, Hyderabad, which comes under this

Court’s jurisdiction.

14.Since an objection was raised by the learned counsel for the accused that the complainant did not complied the ingredients of the section 138 of

NI Act and he also stated that the demand notice was not sent to the correct address of the accused and it was sent to the wrong address and which was retruned as unclaimed.

7 Fair Judgment in CC-NI No.82 of 2022

15.The complainant has examined himself as Pw.1, on oath has deposed that on bouncing of cheque Ex.P.2, Ex.P.3 Cheuqe return memo was issued by the bank for the reason of insufficient funds, the complainant got issued

Ex.P.4 statutory legal notice dt.13.02.2017 by post through RPAD to the accused to his residential address bearing H.No.277/1, Gandhi Colony,

Near YMCA, Ganesh Temple, Picket, Secunderabad, 500003 under Ex.P.5 and Ex.P.6 postal returned cover dt.24.02.2017, which was returned as unclaimed and upon perusal of the record, the complainant got marked photo copy of the Aadhar card of accused, which was marked as Ex.P.7 and it was marked subject to objection. In that Aadhar card, the address of the accused is tallied with the address to which the legal notice was sent and the same was returned as unclaimed. “Unclaimed” is treated to be a demed service of notice.

16. As per the Judgment of the Hon’ble Supreme Court in Raja Kumar

Vs. P. Subramana Naidu AIR 2005 SCC (109) in which the Hon’ble

Supreme Court was held that “even though the notice was returned as Door locked / Refused /

Unclaimed then it shall be presumed that the notice is duly served,”

Hence Ex.P.6 is treated to be a deemed service of legal notice. Eventhough

Ex.P.7 was marked subject to objection, no evidence was placed by the defence counsel to disprove the same, and as per Memo of Appearance filed by them, the address of the accused is same that of mentioned in

Aadhar card and chief. Accordinlgy this point is answered in favour of the complainant.

Point No.2:

17.Before determining Point No.2 for better understanding and appreciation of facts of the case at hand. Sec.138 of NI Act provision is reproduced here.

8 Fair Judgment in CC-NI No.82 of 2022

Under Section 138 of the Negotiable Instrument Act, is as follows:-

Dishonour of cheque for insufficiency, etc., of funds in the account:- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to

honour the cheque or that it exceeds the amount arranged to be paid from

that account by an agreement made with that bank, such person shall be deemed to have committed an offenced and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless:

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation:For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.

9 Fair Judgment in CC-NI No.82 of 2022

18.As per under Section 138 of N.I Act, once the cheque is issued by the drawer a presumption under Section 139 of N.I Act in favour of the holder would be attached. Sec.139 creates a statutory presumption that a cheque received in the nature referred to under Section 138 of N.I Act is for the discharge in whole or in part of any debt or other liability. The initial burden lies upon the complainant to prove the circumstances under which the cheque was issued in his favour and that the same was issued in discharge of a legally enforceable debt. So, complainant himself got examined as PW.1.

19.Complainant/PW.1 deposed in his evidence that he had given hand loan of Rs.1.lakh to the accused through cash and executed a promissory note on the same day on 26.10.2016 and for the repayment of the said hand loan amount accused have issued a cheque bearing No.521872 for Rs.1 lakh dt.11.01.2017.

20.To prove his oral contention that he has lend Rs.1 lakh to the accused on 26.10.2016 he has filed promissory note as documentary proof which is marked as Ex.P1. On perusal of Ex.P1 it bears the signature of accused and signature of other person as witness to that promissory note and PW.1 in support to his contention and to prove his exhibit Ex.P1 he got examined witness of Ex.P1 Promissory Note as PW.2.

21.PW.2 in his chief he deposed that in his presence the PW.1 has given hand loan of Rs.1 lakh on 26.10.2016 to accused and he also stated in his chief that accused promised to PW.1 that he will repay the amount within two months.

22.PW.2 in his cross deposed that PW.1 has given denomination of cash of Rs.500 notes to the accused and he also deposed that at the time of lending the amount by PW.1 to accused, he and friend of accused were 10 Fair Judgment in CC-NI No.82 of 2022 present. PW.2 denied the suggestion that PW.1 did not lend Rs.1 lakh to accused on 26.10.2016 either in his presence or in the presence of the friend of accused. From PW.2 cross examination nothing was much elicited by defense counsel.

23.PW.1 in his cross deposed that in Ex.P4 and also in the complaint he did not state about the fact that accused executed Ex.P1 after receiving of loan amount and he also deposed that Ex.P1 was not filed along with the complaint and he also deposed that he did not state the reason for non filing of Ex.P1 along with complaint in his chief examination affidavit.

24.On persual of record, Ex.P2 to Ex.P8 was filed by PW.1 at the time of filing the complaint and Ex.P1 was filed by PW.1 before commencement of trial along with Sec.254(2) of Cr.P.C petition and that petition was allowed by my learned predecessor as no counter was filed by the accused and that petition was allowed subject to proof and relevancy of the documents.

25.The learned defense counsel in his arguments has made an objection regarding Ex.P1 as there is no pleading regarding Ex.P1 in the complaint and no pleading regarding PW.2 in either the complaint nor in the evidence of PW.1 and said that PW.2 evidence is fatal to the case as no pleading were made.

As per Hon’ble Supreme Court in Shree Daneshwari Traders Vs.

Sanjay Jain and another in 2008 SCC Online Bom 1398 it was held that “In the present case, by examining himself as PW.1, the complainant has discharged the initial burden cast upon him that the cheques were issued for the rice bags purchased on credit. With the examination of PW.1, the statutory presumption under Section 139 of the Act arises that the cheques were issued by the respondent- 11 Fair Judgment in CC-NI No.82 of 2022 accused for the discharge of any debt or other liability in whole or in part. The courts below disbelieved the evidenced of the complainant on the ground that there are no averments in the complaint that the commodities were sold for cash and that the rice bags were sold on credit and the cheques were issued for the goods sold on credit.

Though the complaint contains no specific averments that the cheques were issued for the purchase made on credit, in his evidence, PW.1 clearly stated that the cheques were issued for the commodities purchased on credit. The courts below erred in brushing aside the evidence of PW.1 on the ground that there were no averments in the complaint as to the purchases made by cash and purchase. The courts below also erred in not raising the statutory presumption under Section 139 of the Act that the complainant received the cheques to discharge the debt or other liability in whole or in part”.

As same in this case even though no averment were made in complaint regarding Ex.P1 and about PW.2, the oral and documentary evidence of PW.1 and PW.2 cannot be brushed out and Ex.P1 was brought

before the commencement of trial by filing Sec.254(2) Cr.P.C and Ex.P1 was

proved by PW.2. The evidence of Pws.1 and 2 is unimpeachable and would certainly prove that Ex.P1 was issued in discharge of legally enforceable debt. Hence observing all these evidences it is evident that there existed a legal enforceable debt and to discharge that debt it is presumed that Ex.P2 was issued by accused. Now it is for the accused to rebut that there is no legal enforceable debt. Hence this point is answered in favour of complainant and against the accused.

12 Fair Judgment in CC-NI No.82 of 2022

P OINT No.3:

26.It will be in the fitness of things to reproduce the provions of law as envisaged under Secs. 139, and 118 of NI Act for better understanding and appreciation of the facts of the case at hand.

Under Section 139 of the Negotiable Instrument Act, is as follows:-

Presumption in favour of holder—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, of any debt or other liability.

Under Section 118 of the Negotiable Instrument Act, is as follows:-

Presumptions as to negotiable instruments:- Until the countrary is proved, the following presumptions shall be made:

(a) of consideration, that every negotiable instrument ws made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

(b) as to date, that every negotiable instrument bearing a date was made or drawn on such:

(c) as to time of acceptance, that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;

(d) as to time of transfer, that every transfer of a negotiable instrument was made before its maturity;

(e) as to order of indorsements, that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;

(f) as to stamps, that a lost promissory note, bill of exchange or cheque was duly stamped; 13 Fair Judgment in CC-NI No.82 of 2022

(g) that holder is a holder in due course, that the holder of a negotiable instrument is a holder in due course:

Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.

27. It is for the accused to adduce evidence to prove that cheque were not supported by consideration and that there was no legal enforceable debt or liability to be discharged by him.

28.In PW.1 evidence he deposed that accused has issued a cheque bearing No.521872 for Rs.1 lakh dated 11.01.2017, Ex.P2 drawn on YES

Bank Ltd., Kukatpally branch, Hyderabad, Telangana State and after depositing the said cheque in his bank i.e., Andhra Bank, Bagh Amberpet branch, it was dishonoured and a cheque return memo Ex.P3 dt.18.01.2017 was issued by bank with an endorsement “Funds Insufficient”.

29.PW.2 in his cross denied the suggestion that he lent Rs.20,000/- to the accused at interest 5% per month on Rs.100/- and at the time of lending

Rs.20,000/- he obtained blank signed cheque Ex.P2 and blank signed

Promissory Note Ex.P1 from the accused. He further deposed in his cross that accused gave him the promissory note and cheque and by that time columns were filled up.

30.PW.1 in his cross denied the suggestion put by learned defense counsel that since accused did not repay Rs.20,000/- he took away one LED

Samsung new TV and Vivo mobile from the accused on 26.11.2017 in the presence of N.Ramesh at Parcigutta and he also denied the suggestion that after taking away the TV and mobile he stated to accused that he need not 14 Fair Judgment in CC-NI No.82 of 2022 repay the him any amount and that he promised to return P1 and P2 and he also denied that he misused the same as Ex.P1 and Ex.P2 and filed this false case.

31.The learned defense counsel in his arguments made that there was only Rs.20,000/- loan transaction between the complainant and accused.

During those transaction Ex.P1 and Ex.P2 were taken by complainant and subsequently to these when accused did not repay Rs.20,000/-, complainant/PW.1 took away one LED Samsung TV and mobile and same

Ex.P1 and Ex.P2 without returning to accused complainant filed this case.

32.Accused in Section 313 Cr.P.C examination, he stated that he has issued blank cheque and he stated that he had taken only Rs.20,000/- and repaid it and he did not take the cheque back.

33.On perusal of the evidence of PW.1 and Sec.313 Cr.P.C examination and the submission of arguments of learned defense counsel. It is clear that cheque was issued by the accused and no where accused disputed his signature in Ex.P1 and Ex.P2. The accused stated that he just took

Rs.20,000/- from the complainant and repaid it to the PW.1 in one hand and in other hand accused counsel in cross he posed certain suggestions which was denied by PW.1 and that are:-

1) PW.1 took away LED Samsung TV and Mobile when accused failed to repay Rs.20,000/- in presence of N.Ramesh at Parcigutta on 26.11.2017.

2) PW.1 stated to the accused that need not repay any amount and promised to the return blank signed cheque and blank promissory note,

3) without returning the Ex.P1 and Ex.P2 filed this false case,

To prove his contention accused did not adduce any evidence and he did not try to bring witness N.Ramesh who was present while TV and

Mobile were taken by PW.1.

15 Fair Judgment in CC-NI No.82 of 2022

34.As per suggestion the incident of taking away of TV and Mobile occured on 26.11.2017 but this complaint was filed prior to that incident based on Ex.P1 and Ex.P2 on 15.03.2017.

35.In arguments and in Cross of PW.1 the learned defense counsel stated and put a suggestion that date column of Ex.P2 in which ‘1’ number is added with different pen. However that suggestion was denied by complainant and he said that he does not have any objection to send Ex.P2 to expert opinion. Defense counsel in his arguments stated that due to covid and lock down period they did not send it to expert opinion U/Sec.45 of Indian Evidence Act.

36.The learned defense counsel in his arguments to support his case cited the judgment of Hon’ble High Court of Telangana – R.Narender

Vs. Yakamma Keloth or Kalyan2021 SCC Online TS 533 (2021) 4 RCR (Cri) 844 regarding IT returns. In this case, the subject matter of transaction is Rs.3 crores, however, in that case accused rebutted his presumption raised U/s. 139 of NI Act by adducing Ex.D1 to D15 and in same judgment the Hon’ble High Court has discussed that “the question would be whether non-showing of the amount in his income tax retun is sufficient to rebut a presumption that the cheque was not issued in discharge of a debt or liability.

Identical issue came up for consideration before the Bombay High

Court in Sanjay Mishra Vs. Ms.Kanishka Kapoor @ Nikki and Another, 2009 CRLJ 3777 wherein the Court held as under:

7. It is true that merely because amount advanced is not shown in

Income Tax Return, in every case, one cannot jump to the conclusion that the presumption under Section 139 of the Act stands rebutted.

There may be cases where a small amount less than a sum of 16 Fair Judgment in CC-NI No.82 of 2022

Rs.20,000/- is advanced in cash by way of loan which may be repayable within few days or within few months. A complainant may not show the said amount in the Income Tax Return as itis repayable within few days or few months in the same financial year. In such a case the failure to show the amount in the Income Tax Return may not be itself amount to rebuttal of presumption under Section 139 of the said Act.”

The facts and issues involved in that case and present case in hand is totally different.

35.From the above discussion it is clear that no evidence was led by the accused to substantiate the contentions raised by him in order to disprove the presumption U/s. 118 and 139 of N.I Act except suggestions and denial regarding existence of legally enforceable debt, no cogent evidence was brought on record by accused. Hence, he did not rebut the presumption raised U/s. 118 and 139 of N.I Act. Hence, this point is answered against the accused and in favour of the complainant.accused did not rebut the presumption raised U/s. 139 of N.I. Act.

POINT No.4:

36.As point No.1, 2 and 3 are answered in favour of complainant and against accused. Hence, the accused is found guilty for the offence punishable under Section 138 of Negotiable Instrument Act and accordingly, accused is convicted under the said offence under Section 255(2) Cr.P.C.

Typed to my dictation by the Copyist of this Court, corrected and

pronounced by me in the open Court on this the 1st day of November, 2022.

Sd/-

VII METROPOLITAN MAGISTRATE

HYDERABAD

17 Fair Judgment in CC-NI No.82 of 2022

When the accused is questioned with regard to the sentence to be imposed against him, he submitted that his family is dependent on him and there is no one to see their welfare and prayed to take a lenient view.

Keeping in view of the nature of the case and the offence involved, this Court is not inclined to invoke the benefit under Probation of Offenders

Act, but however the Court is inclined to take a lenient view while awarding the sentence. Accused is explained of his right to prefer appeal against the

Judgment of this Court.

In the result, accused is convicted for the offence U/Sec. 138 of the

Negotiable Instrument Act, 1881, U/sec.255(2) of the Code of Criminal

Procedure and sentenced to undergo simple imprisonment for a period of (6) months and also sentenced to pay fine of Rs. 2,05,000/- and in default to undergo simple imprisonment for a period of two months. Out of the total fine amount of Rs.2,05,000/-, Rs.5,000/- shall be paid to the State and the remaining fine amount of Rs.2,00,000/- shall be paid to the complainant as compensation U/sec. 357(3) of the Code of Criminal Procedure. A free copy of judgment shall be given to the accused as per Sec.363 Cr.P.C r/w

Rule 72 of Criminal Rules of Practice and Circular order, 1990. The remand period if any undergone by the accused during trial shall be set off

U/s. 428 of Cr.P.C.

Typed to my dictation by the Copyist of this Court, corrected and

pronounced by me in open court on this the 1st day of November, 2022.

Sd/-

VII METROPOLITAN MAGISTRATE

HYDERABAD

18 Fair Judgment in CC-NI No.82 of 2022

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR COMPLAINANT ACCUSED

PW.1 : G.Ashwin KumarNil

PW.2 : Deekonda Srinivas

EXHIBITS MARKED FOR COMPLAINANT

Ex.P1 :Original Promissory Note Dt.26.10.2016.

Ex.P2 :Original Cheque bearing No.521872 dt.11.01.2017 for Rs.1,00,000/- drawn on YES Bank, Kukatpally branch, Hyderabad.

Ex.P3 :Andhra Bank, Bagh Amberpet branch, Hyderabad Return memo Dt.18.01.2017.

Ex.P.4 :Office copy of Legal Notice dt.13.02.2017.

Ex.P5 :Postal Receipt dt.13.02.2017.

Ex.P6 :Postal returned cover, dt.24.02.2017.

Ex.P7 :Aadhar Card of Accused.

Ex.P8 :ID card of accused.

EXHIBITS MARKED FOR ACCUSED

Nil

Sd/-

VII METROPOLITAN MAGISTRATE

HYDERABAD