Sri L. Appa Rao

1

IN THE COURT OF SPECIAL MAGISTRATE-IV, VISAKHAPATNAM.

Present: Sri L.Apparao, Spl.Magistrate-IV.

I/C of Special Magistrate court -V

Wednesday, the 27th day of September, 2022.

Calendar Case No.209/2017

1.Sl. Number: CC.209/2017 on the file of IV Special

Magistrate, Visakhapatnam (Old CC

316/2015 on the file of III Spl M. Court, Visakhapatnam).

2.The date of offence: 07-10-2014

3.Name of the complainant: Kanchuboyina Appa Rao, S/o Ramulu, Aged about 48 years, Residing at D.No.10-39-10, Ramnagar, Visakhapatnam.

4.Name of the accused: Abotula Ramunaidu, S/o Suryanarayana, aged about 41 years, Proprietor Sri Sai Durga constructions, Pishini, Ranasthalam Mandalam, Srikakulam District.

5.Offence : Punishable under sec. 138 of N.I Act.

6.Plea of the accused: Total denial.

This case coming on for final hearing on 25-08-2022 before me in the presence of Sri K.S.S.Shyam, Advocate for the Complainant and of L.Joga Rao, advocate for the accused, and having stood over for consideration till this day, this Court delivered the following:

“J U D G M E N T“

This is a private complaint filed u/sec.190(1) (a) of Cr.P.C 142 of N.I.Act R/W 138 of N.I.Act. This case is of the year 2015 received by transfer from III Special

Magistrate's Court, Visakhapatnam.

The brief averments of the complaint are as follows:

The accused approached the complainant along with their common friend by name K.Satyam and borrowed an amount of Rs.7,00,000/- from the complainant on 09.03.2013 for the purpose of business and family expenses and executed a demand promissory note in favour of the complainant on the even date agreeing to repay the same with interest at 24% p.a., either to him or to his order on demand at Visakhapatnam, that on repeated demands made by him, 2 the accused issued a cheque bearing No.000121 dt.07-10-2014 for Rs.8,00,000/- drawn on The Karur Vysya Bank Ltd, Srikakulam towards part payment of the amount borrowed by the accused from the complainant, that he presented the said cheque for collection on 07-10-2014 through his banker i.e., The

Visakhapatnam Co-operative Bank, Nakkavanipalem branch, Vsp and the said cheque was returned with an endorsement “Insufficient Funds” dt.09.10.2014 and the complainant received the said intimation with regard to dishonour of cheuqe from his banker on 15-10-2014, the complainant got issued a registered lawyer's notice dt.01.11.2014 to the accused demanding him to pay the cheque amount within 15 days from the date of receipt of the legal notice and the said notice was received by the accused and got sent a reply dt.19-11-2014, but he has not paid the amount.

The complaint was taken on file for the offence punishable U/s 138 of

N.I.Act against the accused.

After appearance of the accused before the Court, copies of documents were furnished to him.

The accused was examined under sec.251 Cr.P.C and the accused denied and claims to be tried.

In order to prove the case of the complainant, he himself is examined as

PW1 and got marked six documents as Ex.P1 to P6 by way of chief examination.

The complainant has examined K.V.Suresh who is the accused banker as PW2 and got marked the authorization letter as Ex.X1 and statement of account of the accused maintained for the period from 1-10-2014 to 1-12-2014 as Ex.X2 and also got marked the specimen signature of the accused as Ex.X3. The complainant has also examined S.Sivanarayana who is the complainant's banker as PW3 and got marked authorization as Ex.X4 statement of account of the complainant maintained for the period from 5-10-2014 to 30-11-2014 as Ex.X5 and also got marked the cheque return memo dt.15-10-2014 as Ex.X6. Besides that the complainant has examined P.Narasimha Murthy who is the scribe of the

Ex.P1 pronote as PW4. Besides that the complainant got marked Ex.P7 F.I.R dt.13-03-2018 and the report dt.13-03-2018 given by the PW4.

After closure of the complainant side evidence the accused was examined under sec.313 Cr.P.C with regard to the incriminating circumstances appearing against the accused for which she denied the rest.

On behalf of the accused Abothula Ramunaidu is examined as DW1 and

Nakka Savitri as DW2.

Heard the arguments of the complainant's counsel. Perused the written 3 arguments filed by the complainant. The accused counsel failed to submit the arguments though the conditional orders were passed. Hence the arguments of the accused counsel are treated as heard.

Now the points for consideration are:-

Points. 1. Whether the Ex.P2 cheque was issued towards legally enforceable debt?

2. Whether the complainant has proved the guilt of the accused for the offence punishable under sec.138 of

N.I.Act beyond all reasonable doubt?

POINT No.1:-

The complainant who is examined as PW1 has stated by way of his chief examination affidavit reiterating the contents of the complaint. He has also stated about filing of the documents which are marked as Ex.P1 to Ex.P6 and contents of the said documents.

On perusal of Ex.P1 it is the promissory note dt.09-03-2013 executed by the accused in favour of the complainant by borrowing an amount of

Rs.7,00,000/- from the complainant agreeing to repay the same with interest @ 24% p.a and the detailed addresses of both parties were clearly noted therein and on further perusal of it the accused signed across the two revenue stamps affixed on the pronote in English as Abothula Ramunaidu and it was scribed by

Pariti Narasimha Murthy and attested by K.Satyam and N.Savitri.

On perusal of Ex.P2 it is the cheque dt.07-10-2014 issued by the accused in favour of the complainant for an amount of Rs.8,00,000/- drawn on Karur

Vysya Bank, Vsp and on further perusal of the Ex.P2 it is very clear that the accused signed in English A.Ramunaidu on the cheque and the account number of the accused and his Firm name were printed on it.

On perusal of Ex.P3 it is the cheque return memo dt.09-10-2014 for return of the Ex.P2 cheque as “Funds Insufficient” and made the round seal rubber stamp of the concerned bank and the bank officer put his initial and the serial number of the cheque and the amount covered under the cheque were clearly noted in it.

On perusal of Ex.P4 it is the legal notice dt.01-11-2012 got issued by the complainant to the accused intimating about return of the Ex.P2 cheque as “Insufficient Funds” and calling upon him to pay the cheque amount within 15 days from the date of receipt of the legal notice.

On perusal of Ex.P5 it is the acknowledgment for receipt of the legal notice 4 got issued to the accused by the accused.

On perusal of Ex.P6 it is the reply notice dt.19-11-2014 got issued by the accused denying the contents of the legal notice got issued by the complainant.

On perusal of Ex.P7 it is the certified copy of the FIR dt.13-03-2018 registered against Butchibabu and Abothula Ramunaidu (accused)

On perusal of Ex.P8 it is the certified copy of the report dt.13-03-2018 given by the PW4 against the Butchibabu and the accused Abothula Ramunaidu.

Ex.X1 it is the authorization letter given to him by their branch manager to give evidence.

Ex.X2 it is the statement of account of the accused maintained for the period from 1-10-2014 to 1-12-2014.

Ex.X3 it is the specimen signature of the accused.

Ex.X4 it is the authorization given to him by their branch manager to give evidence.

Ex.X5 it is the statement of account of the complainant maintained for the period from 5-10-2014 to 30-11-2014.

Ex.X6 it is they delivered the cheque return memo to the complainant on 15-10-2014.

The complainant who is examined as PW1 has stated all the necessary facts by way of his chief examination affidavit. The complainant has filed all the necessary documents by taking all the necessary steps in time which are contemplated u/sec.138 of N.I.Act.

The oral evidence of PW1 has clearly supported the contents of the documentary evidence adduced by the complainant. PW2 and PW3 stated that the accused and the complainant have got accounts and cheque book facilities in their respective banks and also stated about the authorizations and statements of the accounts respectively and returning the cheque as funds insufficient etc., facts. PW4 Pariti Narasimha Murhty who is the scribe of the

Ex.P1 pronote has stated by way of his chief examination evidence affidavit that on 09-03-2013 the accused approached the complainant and borrowed an amount of Rs.7,00,000/- and that was for his family expenses and the purpose of his business and executed a demand promissory note in favour of Kanchuboyina

Appa Rao on the even date agreeing to repay the same with interest @ 24% p.a to Kanchu Boyina Appa Rao or to his order and also stated by way of his further evidence affidavit about the delay of giving his evidence for the many adjournments was due to the threat insisted upon himself by A.Ramunaidu 5 (accused) and another and that on 12-03-2018 the accused and another hurted him on his head at A.V.N. College by threatening him to stay away from this matter and he gave a report regarding this at One Town Police station,

Visakhapatnam and the case was brought to the C.M.M.Court, Visakhaptnam in

C.C.No.100/2018. It was settled through the Lok Adalat. The evidence of PW4 has clearly corroborated the evidence of PW1 with regard to borrowal of the amount by the accused from the complainant and execution of the Ex.P1 pronote etc., facts and supported the contents of the Ex.P1 pronote. Though the PWs 1 to 4 were cross examined at length by the counsel of the accused he failed to elicit any useful material to discredit the oral and documentary evidence adduced by the complainant. For the reasons best known to the accused except giving reply notice denying the contents of the statutory notice got issued by the complainant he failed to take any steps against the complainant.

During reply notice the case of the accused is that the complainant is running finance business and that the accused and his common friend K.Satyam approached the complainant on 9-3-2015 at Visakhapatnam and requested the complainant to arrange an amount of Rs.7,00,000/-, then the complainant informed to the accused to produce some documents like promissory note, blank cheques and pattadar pass books and title deeds of the accused and the complainant taken all the documents and obtained signature on the blank pronote and blank papers and promised to arrange the said amount with in a short period and the accused will meet him after 15 days.

The accused was examined under sec.251 Cr.P.C and the accused denied and claims to be tried.

During 313 Cr.P.C examination with regard to the incriminating circumstances appearing against the accused for which he denied the rest.

During cross examination of the PW1 the case of the accused is that himself colluding with K.Satyam obtained blank promissory note and blank cheque with signatures of the accused by making a promise that he will give him some money as a loan and postponed the matter from time to time without giving the loan and without returning the blank cheque and blank promissory note and that the accused also raised a dispute before the village elders demanding him for return of blank cheque and blank promissory note and that he has promised before the village elders that he will trace them out and give them to the accused, the accused did not receive any money from him and there was no financial transaction transaction between him and the accused and he colluding with K.Satyam filed this false case against the accused by filing the blank promissory note and blank cheque.

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During chief examination of the DW1 the case of the accused is that the complainant was doing money lending business for last 15 years, as in this way he requested to entrust some customers to his friend K.Satyam, that the said

Satyam and the complainant both collected the blank signed papers such as promissory notes, cheques, pattadar pass books, title deeds and house papers of the accused for getting loan, nobody can put the signature on the blank papers except his signature on them after some time, he asked about the loan to complainant then he replied that the processes of loan is going on it will take some time because the huge amount to be arranged, that the complainant postponed for arrangement of the debt to him, then after he vexed for getting loan, finally he requested to the complainant for return back the blank signed documents such as pronote, cheques etc., but the same was postponed by the complainant finally he, and Satyam along with others requested to the complainant for return back the blank signed documents which are taken by him, then the complainant informed to them that the said documents are not traced out in his office and after searching the same hand over to him immediately.

During chief examination of the DW2 the case of the accused is that he does not know the accused and that in her presence on 9-3-2013 the complainant did not lend any amount to the accused and that when confronted with the promissory note Ex.P1 by the defence counsel, the witness stated that her signature did not find place in the promissory note.

The accused has taken different pleas during different stages which cannot be believed. Moreover the accused has not filed any document to support his case. The evidence of DW1 and DW2 cannot be believed and their evidence cannot be inferred as credible evidence in view of the present facts and circumstances of the case. One way or the other the accused admitted the cheque and signature thereon. When the accused admitted the cheque and signature thereon the statutory presumption u/s 139 comes into play, the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt, as per the observations made by the Hon'ble Apex court in Rangappa, Appellant Vs. Sri Mohan, Respondent and Rohitbhai Jivanlal

Patel Vs. State of Gujarat & Anr. As per the observations made by the Hon'ble

Apex court in M/s Kalamani Tex v. P.Balasubramanian (Supreme Court of India,

February 10, 2021), once the accused had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt, the trial court fell in error when it called upon the complainant to explain the circumstances under which the accused were liable to pay, such approach of the trial court was directly in the teeth of the established legal position, and amounts to a patent 7 error of law. Though the presumption mandates u/sec.139 of the N.I.Act is rebuttable presumption the accused failed to rebut the same either by way of cross examination of Pws 1 to 4 or other wise. It is not the case of the accused that Ex.P2 cheque was not returned from the bank as Insufficient Funds vide

Ex.P3 cheque return memo. It is not the case of the accused that he made the payment covered under the Ex.P2 cheque. I humbly opined that they are no useful to the case of the accused in view of the present facts and circumstances of the case and the discussions made above.

On comparison of the signatures of the accused found on Ex.P1 pronote and Ex.P2 cheque with the signatures of the accused made on his 251 Cr.P.C examination and 313 Cr.P.C examination they are similar.

So in view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, admissions made by the accused, presumption mandates u/sec.139 of N.I.Act and failure to rebut the presumption mandates u/sec.139 of N.I.Act by the accused and the discussions made above I am of the considered view that the accused issued Ex.P2 cheque towards legally enforceable debt and the said cheque was returned as “Insufficient Funds” on it's presentation in the bank for collection and the complainant got issued the legal notice to the accused and it was received and he gave reply notice with false allegations and did not take any steps and did not make any payment and he failed to raise any probable defence. Hence point no.1 is answered accordingly in favour of the complainant and against the accused.

Point No.2:-

In order to support the case of the complainant the learned counsel for the complainant has cited the following decisions reported in (1) AIR 2001 Supreme Court 2895 in K.N.Beena, Appellant vs. Muniyappan and another, Respondents. Wherein the Hon'ble Supreme Court observed that in our view the impugned judgment cannot be sustained at all. The judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under

Section 118, unless the contrary was proved, it is to be presumed that the

Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the 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, the 8

Court has to presume that the cheque had been issued for a debt or liability.

This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P.Dalal Vs. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view.

(2) 2001 AIR (SC) 1315 [2001] 3 JT 508 in Ashok Yeshwant Badave Versus

Surendra Madhavrao Nighojakar. Wherein the 3 Judge bench of the Hon'ble

Supreme Court of India observed that “Section 138 – 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 offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, 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 the drawn on 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 fifteen 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.

(3) (2010) 11 Supreme Court cases 441, in Rangappa, Appellant Vs. Sri

Mohan, Respondent. Wherein the 3 Judge bench of the Hon'ble Supreme Court observed that since appellant admitted that signature on the cheque was his, statutory presumption u/s 139 comes into play. It is also observed that the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt. In the present case in hand the accused failed to raise any probable defence and he was also not able to contest the existence of the legally enforceable debt or liability.

(4) Criminal Appeal No.508 of 2019 (Arising out of Special Leave Petition (Crl.) 1883 of 2018 in Rohitbhai Jivanlal Patel – Appellant (S) Vs. State of Gujarat 9 & Anr – Respondent (S). Wherein the Hon'ble Apex court observed that the respondent No.2 had merely refuted on flimsy ground of his having transacted with witness Jagdishbhai and not with the complainant, has failed to discharge the burden which has shifted upon him. It is to be noted that the respondent

No.2 has admitted his signature on the impugned cheque. At no point of time, the cheque has been disputed. Once this fact is acknowledged that the signature on the cheque is that of the respondent No.2-accused, section 139 of the

Negotiable Instruments Act would mandate the presumption that the cheque concerns a legally enforceable debt or liability.

(5) As per the observations made by the Hon'ble Apex court in M/s

Kalamani Tex v. P. Balasubramanian (Supreme Court of India, February 10, 2021), once the accused had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt, the trial court fell in error when it called upon the complainant to explain the circumstances under which the accused were liable to pay, such approach of the trial court was directly in the teeth of the established legal position, and amounts to a patent error of law.

(6) Special leave petition (criminal) diary No(s).13470/2019 decided on 12- 08-2022 between P.Rasiya ….Petitioner (s) Vs Abdul Nazer & Another ….Respondent (s). Wherein the Hon'ble Apex court observed that by the impugned common judgment and order, the High court has reversed the concurrent findings recorded by both the courts below and has acquitted the accused on the ground that, in the complaint, the complainant has not specifically stated the nature of transactions and the source of fund. However, the High court has failed to note the presumption under section 139 of the

N.I.Act and the Hon'ble Apex court quashed and set side the acquittal judgment passed by the Hon'ble High court and that the order passed by the learned trial court convicting the accused for the offence punishable u/sec.138 of N.I.Act confirmed / modified by the learned sessions court is restored.

(7) AIR 2001 SUPREME COURT 3897 in Hiten P.Dalal. Appellant v.

Bratindranath Banerjee. Respondent. Wherein 3 Judge Bench of the Hon'ble Apex court observed that the presumption that cheque was drawn for discharge of liability of drawer is presumption of law. It is also observed with regard to the rebuttal evidence that mere plausible explanation is not sufficient and proof of explanation is necessary.

It was also observed by the Hon'ble Apex court that plea by the accused drawer that cheques issued by him to complainant bank were not given to discharge his debt due to bank but were given for intended transactions. No defence witness giving evidence in support of such plea. Not tenable since he 10 has not applied to court for permission to fulfill obligation and it was also held by the Hon'ble Apex court that the defence was improbable and his conviction by raising presumption was proper.

(8) 2015 (1) ALT (Crl.) 68 (A.P) in Om Pralasj Agarwal v. Khaja Krishna

Prasad and another. Wherein our Hon'ble High court observed that the object and intention of the penal provisions of Chapter XVII (Sections 138 to 147) are to prevent issuing of cheques in playful manner or with dishonest intention or with no mind to honour or without sufficient funds in the account maintained by the drawer in Bank and induce the payee/holder or holder in due course to act upon it.

(9) Criminal Appeal No.728 of 2015 (Arising out of SLP (Crl.) No.8091 of 2011) in T.Vasanthakumar Vs Vijayakumari on 28 April, 2015. Wherein the

Hon'ble Apex court observed that 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.

(10) 2016 0 Supreme (SC) 730 in Sampelly Satyanarayana Rao – Appellant

Versus Indian Renuwable Energy Development Agency Limited – Respondent.

Wherein the Hon'ble Apex court observed that cheques represent the outstanding liability and dishonour of such cheque would fall under section 138 of N.I.Act. Wherein the Agreement showing post dated cheques as security, but refers to the cheques being towards repayment of installments. Repayment becoming due the moment the loan is advanced and the installment falls due. So the cheques represent the outstanding liability. As such dishonour of such cheque would fall u/sec.138 of the N.I.Act, as per the observation made by the

Hon'ble Apex court in Para 11 of the Judgment.

It is also observed by the Hon'ble Apex court that once issuance of a cheque and signature thereon are admitted presumption of a legally enforceable debt in favour of the holder of the cheque arises. Accused may rebut the presumption but mere statement of the accused may not be sufficient.

(11) I.C.D.S.Ltd vs Beena Shabeer & Anr on 12 August, 2002 in I.C.D.S Ltd, - Petitioner Vs Beena Shabeer – Respondent. Wherein the Hon'ble Apex court observed that the language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of section 138 of the Act.

(12) Criminal Appeal Nos.230-231 of 2019 in Bir Singh – Appellant versus

Mukesh Kumar – Respondent. Wherein the Hon'ble Apex court observed that 11 section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under sec.139 of the

Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts.

(13) Criminal Appeal No. of 2019 (Arising out of S.L.P. (Crl.) No(s).

3858/2019) in Pavan Diliprao Dike – Appellant(s) versus Vishal Narendrabhai

Parmar – Respondent(s). Wherein the Hon'ble Apex court observed that the trial court committed an error in placing heavy burden on the complainant to prove the debt.

(14) Criminal Appeal No.1545 of 2019 (Arising out of SLP (CRL) No.3452 of 2019 in Uttam Ram – Appellant (s) versus Devinder Singh Hudan & Anr –

Respondent (s). Wherein the Hon'ble Apex court observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable

Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt, by referring the decision rendered by the

Hon'ble Apex court (2019) 4 SCC 197.

(15) AIR 2004 Supreme Court 408 Paragraph 25 in Goa Plast Pvt.Ltd Vs. Chico

Ursula D'Souza, wherein the Hon'ble Apex Court held that “... an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee”...

In view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, observations made in point no.1, in view of the decisions cited by the learned counsel for the complainant and in view of the observations made in the said decisions by their Lordships I am of the considered view that the accused cannot be escaped from liability under any circumstances and the complainant has proved the guilt of the accused for the offence punishable under sec.138 of N.I.Act beyond all reasonable doubt. Hence point no.2 is answered accordingly in favour of the complainant and against the accused.

Hence the accused is found guilty for the offence punishable under

Section.138 of Negotiable Instrument Act and he is convicted U/sec.255(2)

Cr.P.C. for the said offence.

Dictated to the Stenographer and transcribed by her, corrected and

pronounced by me in the open court, this the 27th day of September, 2022.

Spl. Magistrate – IV I/C Special Magistrate-V Visakhapatnam 12

When the accused is questioned with regard to the quantum of sentence to be imposed, he has pleaded for mercy of the Court by stating that he has got his wife and children and they are depending upon him.

In view of the present facts and circumstances of the case, this is not a fit case to release the accused by applying the Provisions of Sec.360 of Cr.P.C or

Probation of Offender's Act.

By considering the present facts and circumstances of the case and the submissions made by the accused I am of the considered view that if the accused is sentenced to suffer S.I for a period of one year it would be just and proper.

In the result, the accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.P.C for the said offence and he is sentenced to suffer simple imprisonment for one year.

He is entitled for set off of the period under gone by him u/sec 428 Cr.P.C.

The accused is informed with regard to the right to prefer an appeal and if necessary to provide legal aid to defend him in the appeal through the legal services authority. For which the accused stated that he knows his rights and he does not want any legal aid as he is having sufficient means to engage an advocate to defend his case.

Spl.Magistrate–IV I/C Special Magistrate-V Visakhapatnam Appendix of Evidence

Witnesses examined for complainant :- PW1/ Kanchuboyina Appa Rao PW2/ K.V.Suresh PW3/ S.Siva Narayana PW4/ Pariti Narasimha Murthy Witnesses examined for accused : - DW1/ Abothula Ramunaidu DW2/ Nakka Savitri Documents marked for complainant :-

1) Ex.P1 Promissory note dt.09-03-2013

2) Ex.P2 Cheque dt.07-10-2014

3) Ex.P3 Cheque return memo dt.09-10-2014

4) Ex.P4 Registered lawyer's notice dt.01-11-2014

5) Ex.P5 Acknowledgment

6) Ex.P6 Reply notice dt.19-11-2014

7) Ex.P7 Certified copy of the FIR dt.13-03-2018 13

8) Ex.P8 Certified copy of the report dt.13-03-2018

Documents marked for accused : - NIL

Documents marked for third party : - NIL

1) Ex.X1 Authorization letter given to him by their branch manager to give evidence.

2) Ex.X2 Statement of account of the accused maintained for the period from 01-10-2014 to 1-12-2014.

3) Ex.X3 Specimen signature of the accused.

4) Ex.X4 Authorization given to him by their branch manager to give evidence.

5) Ex.X5 Statement of account of the complainant maintained for the period from 05-10-2014 to 30-11-2014.

6) Ex.X6 The cheque return memo delivered to the complainant on 15-10-2014.

Spl.Magistrate–IV I/C Special Magistrate-V Visakhapatnam -// True Copy //- 14

CALENDAR AND JUDGMENT

DISTRICT : : VISAKHAPATNAM

IN THE COURT OF THE SPECIAL MAGISTRATE-IV, VISAKHAPATNAM

C.C.NO.209/2017

DATE OF OFFENCE:

1. Report of complaint:15.12.2014 2.Apprehension of accused:30.01.2017

3. Release of Bail:-----

4. Commencement of trial:22.02.2017

5. Close of trial:01.08.2022

6. Date of Judgment:27.09.2022

EXPLANATION FOR THE DELAY:

The delay is due to non­production of witnesses by the complainant.

JUDGMENT IN CALENDAR CASE NO: C.C.209/2017 on the file of IV Special Magistrate Court, Visakhapatnam. (Old C.C.No.316/2015 on the file of III Spl. Magistrate Court, Visakhapatnam).

COMPLAINANT: Kanchuboyina Appa Rao, S/o Ramulu, Aged about 48 years, Residing at D.No.10-39-10, Ramnagar, Visakhapatnam.

ACCUSED: Abotula Ramunaidu, S/o Suryanarayana, aged about 41 years, Proprietor Sri Sai Durga constructions, Pishini, Ranasthalam Mandalam, Srikakulam District.

OFFENCE: Dishonour of cheque for insufficiency of funds, Punishable under sec.138 of Negotiable Instruments Act.

FINDING:Found guilty.

SENTENCE:The accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.P.C for the said offence and he is sentenced to suffer simple imprisonment for a period of one year.

He is entitled for set off of the period under gone by him under Sec.428 Cr.P.C.

Sentence is suspended till 27.10.2022 on executing bond for an amount of Rs.10,000/- with one surety for a like sum as per the order dated 27.09.2022 in Crl.M.P.No.6655/2022 and the accused has executed the bond as ordered.

Sd/- L. Appa Rao,

Special Magistrate-IV, Visakhapatnam.

-// True copy //-

1

IN THE COURT OF SPECIAL MAGISTRATE-IV, VISAKHAPATNAM.

Present: Sri L.Apparao, Spl.Magistrate-IV.

I/C of Special Magistrate court-V

Friday, the 21st day of October, 2022.

Calendar Case No.4998/2019

1.Sl. Number: CC.4998/2019 on the file of IV Special

Magistrate, Visakhapatnam (Old C.C.4998/19

on the file of I ACMM Court, Visakhapatnam).

2.The date of offence: 23-07-2019

3.Name of the complainant: M/s Aaditya Infozone represented by its Authorized Signatory cum Power of Attorney Holder, Sri Addepalli Ramakrishna, S/o A.Nagaraju, office situated at D.No.47-11-3, Eswar Homes, 1st Lane, Dwarakanagar, Visakhapatnam-530016.

4.Name of the accused: M.K.Computers, represented by its Proprietor Sri Manoj Kumar, Shop No.9-8-63/4, Balu complex, Opposite Vimal show room, Visakhapatnam.

5.Offence : Punishable under sec. 138 of N.I Act.

6.Plea of the accused: Total denial.

This case coming on for final hearing on 29-09-2022 before me in the presence of Sri B.V.Narasimha Rao, Advocate for the Complainant and of

M.N.Rao advocate for the accused, and having stood over for consideration till this day, this Court delivered the following:

“J U D G M E N T “

This is a private complaint filed u/sec.190 (1) (a) of Cr.P.C and section 142 of N.I.Act read with section 138 of the N.I.Act. This case is of the year 2019 received by transfer from I Addl. Chief Metropolitan Magistrate's Court,

Visakhapatnam.

The brief averments of the complaint are as follows:

The accused doing business in the name and style of M/s M.K.Computers at Visakhapatnam and for the purpose of their business the accused used to purchase the computer peripherals from the complainant on credit basis. That whereas the accused has purchased the material from the complainant on various dates and failed to remit the payment to the complainant, that whereas there is an outstanding of Rs.2,41,911/- payable by the accused to the 2 complainant by the end of 26-7-2019 including cheque bounce charges, that on repeated requests made by the complainant, the accused issued a cheque bearing No.032537 dt.23.07.2019 for Rs.2,41,911/- drawn on IDBI Bank,

Gajuwaka branch, Visakhapatnam towards part payment of the above said debt, that he presented the said cheque for collection on 24-07-2019 through his banker i.e., Union Bank of India, Akkayyapalem branch, Visakhapatnam and the said cheque was returned with an endorsement “Funds Insufficient” and the complainant came to know the said fact on 25-7-2019, he got issued a registered lawyer's notice dt.22.08.2019 to the accused to pay the cheque amount within 15 days from the date of receipt of the legal notice and the said notice was received by the accused, but neither paid any amount nor sent any reply.

The complaint was taken on file for the offence punishable U/s 138 of

N.I.Act against the accused.

After appearance of the accused before the Court, copies of documents were furnished to him.

The accused was examined under sec.251 Cr.P.C and he denied and claims to be tried.

In order to prove the case of the complainant, A.Ramakrishna, authorized

Signatory is examined as PW1 and got marked eight documents as Ex.P1 to P8 and the complainant further examined in chief and got marked one document as

Ex.P9. He has also examined V.Lakshmana Rao Grade – B Manager of the accused banker as PW2 and got marked Ex.X1 authorization given to him to give evidence, Ex.X2 statement of account of the accused for the period from 20.7.2019 to 30.7.2019. He has also examined the Deputy Manager who is the complainant banker as PW3 and got marked Ex.X3 authorization given to him to give evidence, Ex.X4 statement of account of the complainant for the period from 1-7-2019 to 31-7-2019.

After closure of the complainant side evidence the accused was examined under sec.313 Cr.P.C with regard to the incriminating circumstances appearing against him for which he has stated that he is the proprietor of that

M.K.Computors and their Firm got account and cheque book facility in that bank and that cheque is relating to their Firm and the signature contained on the cheque is his signature and denied the rest.

On behalf of the accused no oral or documentary evidence is adduced.

Heard the arguments of both sides. Perused the written arguments filed by the accused and statement filed by the accused during 313 Cr.P.C examination.

Now the points for consideration are:-

Points. 1. Whether the Ex.P1 cheque was issued towards 3 legally enforceable debt?

2. Whether the complainant has proved the guilt of the accused for the offence punishable under sec.138 of

N.I.Act beyond all reasonable doubt?

POINT No.1:-

The complainant who is examined as PW1 has stated by way of his chief examination affidavit reiterating the contents of the complaint. He has also stated about filing of the documents which are marked as Ex.P1 to Ex.P9 and contents of the said documents.

On perusal of Ex.P1 it is the cheque dt.23-07-2019 issued by the accused in favour of the complainant for an amount of Rs.2,41,911/- drawn on IDBI Bank,

Jayasurya complex, Gajuwaka branch, Vsp and on further perusal of the Ex.P1 it is very clear that the accused signed in English stylishly on the cheque and the account number of the accused and Firm name were printed on it.

On perusal of Ex.P2 it is the cheque return memo dt.25-07-2019 for return of the Ex.P1 cheque as “Funds Insufficient” and the amount covered under the cheque were clearly noted in it.

On perusal of Ex.P3 it is the legal notice dt.22-08-2019 got issued by the complainant to the accused intimating about return of the Ex.P1 cheque as “Funds Insufficient” and calling upon him to pay the cheque amount within 15 days from the date of receipt of the legal notice.

On perusal of Ex.P4 it is the postal receipt dt.22-08-2019 for sending the notice to the accused.

On perusal of Ex.P5 it is the authorization letter dt.26-09-2019 given in favour of A.Ramakrishna.

On perusal of Ex.P6 it is the acknowledgment dt.24-08-2019 for receipt of the legal notice got issued to the accused by the accused.

On perusal of Ex.P7 it is the statement of account of the accused for the period from 1-4-2018 to 29-7-2019.

On perusal of Ex.P8 it is the invoice copies (Total 14 Nos).

On perusal of Ex.P9 it is the certified copy of the General Power of Attorney dt.01-09-2014.

Ex.X1 It is the authorization given to the PW2 to give evidence.

Ex.X2 It is the statement of account of the accused maintained for the period from 20-7-2019 to 30-7-2019.

Ex.X3 It is the authorization given to the PW3 to give evidence.

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Ex.X4 it is the statement of account of the complainant for the period from 1-7-2019 to 31-7-2019.

The complainant who is examined as PW1 has stated all the necessary facts by way of his chief examination affidavit. The complainant has filed all the necessary documents by taking all the necessary steps in time which are contemplated u/sec.138 of N.I.Act.

The oral evidence of PW1 has clearly supported the contents of the documentary evidence adduced by the complainant. PW2 Grade-B Manager, who is examined as PW2 has stated by way of his chief examination that the accused is having account in their branch vide account No.1010651100000514. Ex.X1 is the authorization given to him by their branch Manager to give evidence in this case and that Ex.X2 is the statement of account of the accused for the period from 20-7-2019 to 30-7-2019 and that Ex.P1 cheque leaf emanated from the cheque book given by their branch to the accused and that Ex.P1 cheque was presented for realization on 23-7-2019 but it was dishonoured under Ex.P2 cheque return memo on 25-7-2019 for insufficiency of funds given by the Union

Bank of India. PW3 has stated by way of his chief examination that the complainant is having account in their branch vide account

No.573701010050236 and that Ex.X3 is the authorization given to him by their branch Manager to give evidence in this case and that Ex.X4 is the statement of account of the complainant for the period from 1-7-2019 to 31-7-2019 and that

Ex.P1 cheque came to their branch for clearance on 25-7-2019 and on the same day it was dishonoured because of insufficiency of funds under Ex.P2 cheque return memo. The evidence of PW2 and PW3 corroborated the evidence of PW1.

Though the PWs 1 to 3 were cross examined at length by the counsel of the accused he failed to elicit any useful material to discredit the oral and documentary evidence adduced by the complainant. For the reasons best known to the accused he failed to come into witness box to give evidence and failed to file any scrap of paper to support his case. For the reasons best known to the accused he failed to take any steps either against the complainant or against anybody either by giving any report to the police or by filing complaint or by giving legal notice.

During 251 Cr.P.C examination the accused has denied the case of the complainant.

During 313 Cr.P.C examination he has stated that he is the proprietor of that M.K.Computors and their Firm got account and cheque book facility in that bank and that cheque is relating to their Firm and the signature contained on the cheque is his signature and denied the rest.

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During cross examination of the PW1 the case of the accused is that there is no legally enforceable debt between them and the accused and therefore the complainant itself is not maintainable under law and they have no right to file complaint. The accused has taken different pleas during different stages which cannot be believed. One way or the other the accused admitted the cheque and signature thereon. When the accused admitted the cheque and signature thereon the statutory presumption u/s 139 comes into play, the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt, as per the observations made by the Hon'ble Apex court in

Rangappa, Appellant Vs. Sri Mohan, Respondent and Rohitbhai Jivanlal Patel Vs.

State of Gujarat & Anr. Failure of the accused in giving reply to the legal notice issued by the complainant is one of the strong circumstances to draw an inference that the accused has taken the amount from the complainant and the cheque was issued towards part payment of the legally enforceable debt, as per the observation made by our Hon'ble high court in Gorantla Venkateswara Rao

Vs Kolla Veerabhadra Rao and another. Though the presumption mandates u/sec.139 of the N.I.Act is rebuttable presumption the accused failed to rebut the same either by way of cross examination of Pws 1 to 3 or other wise. It is not the case of the accused that Ex.P1 cheque was not returned from the bank as Funds

Insufficient vide Ex.P2 cheque return memo. It is not the case of the accused that he filed any document to show the payment covered under the Ex.P1 cheque.

On comparison of the signatures of the accused found on Ex.P1 cheque with the signatures of the accused made on his 251 Cr.P.C examination and 313

Cr.P.C examination they are similar.

So in view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, admissions made by the accused, presumption mandates u/sec.139 of N.I.Act and failure to rebut the presumption mandates u/sec.139 of N.I.Act by the accused and the discussions made above I am of the considered view that the accused issued Ex.P1 cheque towards legally enforceable debt and the said cheque was returned as “Funds

Insufficient” on it's presentation in the bank for collection and the complainant got issued the legal notice to the accused and it was received by the accused and did not take any steps and did not make any payment and he failed to raise any probable defence. Hence point no.1 is answered accordingly in favour of the complainant and against the accused.

Point No.2:-

In order to support the case of the complainant the learned counsel for the complainant has cited the following decisions 6 reported in (1) AIR 2001 Supreme Court 2895 in K.N.Beena, Appellant vs. Muniyappan and another, Respondents. Wherein the Hon'ble Supreme Court observed that in our view the impugned judgment cannot be sustained at all. The judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under

Section 118, unless the contrary was proved, it is to be presumed that the

Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the 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, the

Court has to presume that the cheque had been issued for a debt or liability.

This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P.Dalal Vs. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view.

(2) 2001 AIR (SC) 1315 [2001] 3 JT 508 in Ashok Yeshwant Badave Versus

Surendra Madhavrao Nighojakar. Wherein the 3 Judge bench of the Hon'ble

Supreme Court of India observed that “Section 138 – 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 offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, 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 the drawn on 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 fifteen 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 7 be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.

(3) (2010) 11 Supreme Court cases 441, in Rangappa, Appellant Vs. Sri

Mohan, Respondent. Wherein the 3 Judge bench of the Hon'ble Supreme Court observed that since appellant admitted that signature on the cheque was his, statutory presumption u/s 139 comes into play. It is also observed that the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt. In the present case in hand the accused failed to raise any probable defence and he was also not able to contest the existence of the legally enforceable debt or liability.

(4) Criminal Appeal No.508 of 2019 (Arising out of Special Leave Petition (Crl.) 1883 of 2018 in Rohitbhai Jivanlal Patel – Appellant (S) Vs. State of Gujarat & Anr – Respondent (S). Wherein the Hon'ble Apex court observed that the respondent No.2 had merely refuted on flimsy ground of his having transacted with witness Jagdishbhai and not with the complainant, has failed to discharge the burden which has shifted upon him. It is to be noted that the respondent

No.2 has admitted his signature on the impugned cheque. At no point of time, the cheque has been disputed. Once this fact is acknowledged that the signature on the cheque is that of the respondent No.2-accused, section 139 of the

Negotiable Instruments Act would mandate the presumption that the cheque concerns a legally enforceable debt or liability.

(5) Special leave petition (criminal) diary No(s).13470/2019 decided on 12- 08-2022 between P.Rasiya ….Petitioner (s) Vs Abdul Nazer & Another ….Respondent (s). Wherein the Hon'ble Apex court observed that by the impugned common judgment and order, the High court has reversed the concurrent findings recorded by both the courts below and has acquitted the accused on the ground that, in the complaint, the complainant has not specifically stated the nature of transactions and the source of fund. However, the High court has failed to note the presumption under section 139 of the

N.I.Act and the Hon'ble Apex court quashed and set side the acquittal judgment passed by the Hon'ble High court and that the order passed by the learned trial court convicting the accused for the offence punishable u/sec.138 of N.I.Act confirmed / modified by the learned sessions court is restored.

(6) Gorantla Venkateswara Rao Vs Kolla Veerabhadra Rao and another, 2006 Cr L J page 1 where in it is observed by the Hon'ble High court of A.P. that there are no other probable circumstances placed by the accused in the process of discharge of his burden. The failure of the accused in giving reply to the legal notice issued by PW1 is one of the strong circumstances to draw an inference that the accused borrowed the amount from PW1 and the cheque was issued towards part payment of the legally enforceable debt.

8 (7) AIR 2001 SUPREME COURT 3897 in Hiten P.Dalal. Appellant v.

Bratindranath Banerjee. Respondent. Wherein 3 Judge Bench of the Hon'ble Apex court observed that the presumption that cheque was drawn for discharge of liability of drawer is presumption of law. It is also observed with regard to the rebuttal evidence that mere plausible explanation is not sufficient and proof of explanation is necessary.

It was also observed by the Hon'ble Apex court that plea by the accused drawer that cheques issued by him to complainant bank were not given to discharge his debt due to bank but were given for intended transactions. No defence witness giving evidence in support of such plea. Not tenable since he has not applied to court for permission to fulfil obligation and it was also held by the Hon'ble Apex court that the defence was improbable and his conviction by raising presumption was proper.

(8) 2015 (1) ALT (Crl.) 68 (A.P) in Om Pralasj Agarwal v. Khaja Krishna

Prasad and another. Wherein our Hon'ble High court observed that the object and intention of the penal provisions of Chapter XVII (Sections 138 to 147) are to prevent issuing of cheques in playful manner or with dishonest intention or with no mind to honour or without sufficient funds in the account maintained by the drawer in Bank and induce the payee/holder or holder in due course to act upon it.

(9) Criminal Appeal No.728 of 2015 (Arising out of SLP (Crl.) No.8091 of 2011) in T.Vasanthakumar Vs Vijayakumari on 28 April, 2015. Wherein the

Hon'ble Apex court observed that 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.

(10) 2016 0 Supreme (SC) 730 in Sampelly Satyanarayana Rao – Appellant

Versus Indian Renuwable Energy Development Agency Limited – Respondent.

Wherein the Hon'ble Apex court observed that cheques represent the outstanding liability and dishonour of such cheque would fall under section 138 of N.I.Act. Wherein the Agreement showing post dated cheques as security, but refers to the cheques being towards repayment of installments. Repayment becoming due the moment the loan is advanced and the installment falls due. So the cheques represent the outstanding liability. As such dishonour of such cheque would fall u/sec.138 of the N.I.Act, as per the observation made by the

Hon'ble Apex court in Para 11 of the Judgment.

It is also observed by the Hon'ble Apex court that once issuance of a cheque and signature thereon are admitted presumption of a legally enforceable debt in favour of the holder of the cheque arises. Accused may rebut the presumption but mere statement of the accused may not be sufficient.

9 (11) I.C.D.S.Ltd vs Beena Shabeer & Anr on 12 August, 2002 in I.C.D.S Ltd, - Petitioner Vs Beena Shabeer – Respondent. Wherein the Hon'ble Apex court observed that the language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of section 138 of the Act.

(12) Criminal Appeal Nos.230-231 of 2019 in Bir Singh – Appellant versus

Mukesh Kumar – Respondent. Wherein the Hon'ble Apex court observed that section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under sec.139 of the

Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts.

(13) Criminal Appeal No. of 2019 (Arising out of S.L.P. (Crl.) No(s).

3858/2019) in Pavan Diliprao Dike – Appellant(s) versus Vishal Narendrabhai

Parmar – Respondent(s). Wherein the Hon'ble Apex court observed that the trial court committed an error in placing heavy burden on the complainant to prove the debt.

(14) Criminal Appeal No.1545 of 2019 (Arising out of SLP (CRL) No.3452 of 2019 in Uttam Ram – Appellant (s) versus Devinder Singh Hudan & Anr –

Respondent (s). Wherein the Hon'ble Apex court observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the

Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt, by referring the decision rendered by the Hon'ble Apex court (2019) 4 SCC 197.

(15) AIR 2004 Supreme Court 408 Paragraph 25 in Goa Plast Pvt.Ltd Vs.

Chico Ursula D'Souza, wherein the Hon'ble Apex Court held that “... an unscrupulous drawer normally taken various pleas to defeat the genuine claim of the payee”...

On the other hand the learned counsel for the accused has cited the following decisions:

(1) Crl.A.No.519 of 1997 in M/s M.M.T.C. LTD vs Mrs Sampooranam on 20- 01-2007. Wherein the Hon'ble High court of Madras observed that in this case

Ex.P1 to P7 xerox copies of the promissory notes have been filed on behalf of the complainant to show that the accused had borrowed Rs.53,72,000/- from the de jure complainant. Ex.P8 is also a xerox copy of the ledger register maintained in the complainant's company. All the above said Ex.P14 to P8 were marked subject 10 to objection. It is further seen from the evidence of PW1 that originals of the above said documents Ex.P1 to P8 were marked in C.C.133/1995 on the file of the judicial magistrate, if it is so then what prevented the complainant from filing necessary application to send for the original documents for Ex.P1 to P8 which are available in C.C.113/1995 pending on the file of the same Magistrate.

(2) Crl.A.No.950 to 952 of 1997 in M/s Industrial Stores Trading Co., Rep by its Mr.R.Sekar – Appellant / complainant vs. M/s Professional Circuit Boards Ltd., and another Respondents/accused. Wherein the Hon'ble High court of Madras observed that xerox copy of the power of attorney produced by the said Sekar is not in conformity with the provisions of section 85 of the Indian Evidence Act, since it was not certified by a notory public.

(3) Crl.A.No.536 of 2006 in Ghanshyamdas Lalchand Chandak vs. Sheikh

Hamid Sheikh Gulab & Anor. Wherein the Hon'ble High court of Bombay observed that the settled position of law is that if the signature on the cheque is admitted, the statutory presumption under section 139 of the Act stands activated and the accused is obligated to rebut the presumption before the burden of proving the existence of debt or liability shits to the complainant.

However, the accused need not adduce direct evidence and it entitled to rely on the material brought on record, during the evidence of the complainant, or otherwise.

(4) R/Crl.A.No.1650 of 2017 in Prabhudayal Devandal Khatri vs. State of

Gujarat. Wherein the Hon'ble High court of Gujarat observed that to make out criminal liability under section 138 of the N.I.Act, there should be a legally enforceable debt or liability in existence on the date of the drawl of the cheque.

In view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, observations made in point no.1, in view of the decisions cited by the learned counsel for the complainant and in view of the observations made in the said decisions by their Lordships I humbly opined that the decisions cited by the learned counsel for the accused cannot be applicable to the case in hand and I am also humbly opined that the accused cannot be escaped from liability and the complainant has proved the guilt of the accused for the offence punishable under sec.138 of N.I.Act beyond all reasonable doubt. Hence point no.2 is answered accordingly in favour of the complainant and against accused.

Hence the accused is found guilty for the offence punishable under

Section.138 of Negotiable Instrument Act and he is convicted U/sec.255(2)

Cr.P.C. for the said offence.

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Dictated to the Stenographer and transcribed by her, corrected and

pronounced by me in the open court, this the 21st day of October, 2022.

Spl.Magistrate–IV I/C Special Magistrate-V Visakhapatnam

When the accused is questioned with regard to the quantum of sentence to be imposed, he has pleaded for mercy of the Court by stating that he has got his wife and children and they are depending upon him.

In view of the present facts and circumstances of the case, this is not a fit case to release the accused by applying the Provisions of Sec.360 of Cr.P.C or

Probation of Offender's Act.

By considering the present facts and circumstances of the case and the submissions made by the accused I am of the considered view that if the accused is sentenced to suffer S.I for a period of six months it would be just and proper.

In the result, the accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.P.C for the said offence and he is sentenced to suffer simple imprisonment for six months.

He is entitled for set off of the period under gone by him u/sec 428 Cr.P.C.

The accused is informed with regard to the right to prefer an appeal and if necessary to provide legal aid to defend him in the appeal through the legal services authority. For which the accused stated that he knows his rights and he does not want any legal aid as he is having sufficient means to engage an advocate to defend his case.

Appendix of Evidence

Witnesses examined for complainant :- PW1/ Addepalli Ramakrishna PW2/ V.Lakshmana Rao PW3/ Rajesh Duggirala Witnesses examined for accused : - None Documents marked for complainant :-

1) Ex.P1 Cheque dt.23-07-2019

2) Ex.P2 Cheque return memo dt.24-07-2019

3) Ex.P3 Registered lawyer's notice dt.22-08-2019

4) Ex.P4 Postal receipt dt.22-08-2019

5) Ex.P5 Authorization letter dt.26-09-2019

6) Ex.P6 Acknowledgment dt.24.08.2019

7) Ex.P7 Statement of account of the accused maintained by the complainant for 12 the period from 1-4-2018 to 29-7-2019.

8) Ex.P8 Invoice copies (Total 14 Nos) Ex.P9 it is the certified copy of the General Power of Attorney dt.01-09-2014.

Documents marked for accused : - NIL

Documents marked for third party : -

1) Ex.X1 Authorization given to the PW2 to give evidence.

2) Ex.X2 The statement of account of the accused maintained for the period from 20-7-2019 to 30-7-2019.

3) Ex.X3 Authorization given to the PW3 to give evidence.

4) Ex.X4 The statement of account of the complainant for the period from 1.7.2019 to 31.7.2019.

Spl.Magistrate–IV I/C Special Magistrate-V Visakhapatnam.

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CALENDAR AND JUDGMENT

DISTRICT : : VISAKHAPATNAM

IN THE COURT OF THE SPECIAL MAGISTRATE-V, VISAKHAPATNAM

C.C.NO.4998/2019

DATE OF OFFENCE:

1. Report of complaint:30.09.2019 2.Apprehension of accused:16.03.2020

3. Release of Bail:-----

4. Commencement of trial:17.02.2021

5. Close of trial:11.08.2022

6. Date of Judgment:21.10.2022

EXPLANATION FOR THE DELAY:

The delay is due to non­production of witnesses by the complainant.

JUDGMENT IN CALENDAR CASE NO: C.C.4998/2019 on the file of V Special Magistrate Court, Visakhapatnam. (Old C.C.No.4998/2019 on the file of I Addl. Chief Metropolitan Magistrate Court, Visakhapatnam).

COMPLAINANT: M/s Aaditya Infozone represented by its Authorized Signatory cum Power of Attorney Holder, Sri Addepalli Ramakrishna, S/o A.Nagaraju, office situated at D.No.47-11-3, Eswar Homes, 1st Lane, Dwarakanagar, Visakhapatnam- 530016.

ACCUSED: M.K.Computers, represented by its Proprietor Sri Manoj Kumar, Shop No.9-8-63/4, Balu complex, Opposite Vimal show room, Visakhapatnam.

OFFENCE: Dishonour of cheque for insufficiency of funds, Punishable under sec.138 of Negotiable Instruments Act.

FINDING:Found guilty.

SENTENCE:The accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.P.C for the said offence and he is sentenced to suffer simple imprisonment for a period of six months.

He is entitled for set off of the period under gone by him under Sec.428 Cr.P.C.

Sentence is suspended till 18.11.2022 on executing bond for an amount of Rs.5,000/- with two sureties for a like sum as per the order dated 21.10.2022 in Crl.M.P.No.6923/2022 and the accused has executed the bond as ordered.

Special Magistrate - IV FAC Special Magistrate-V, Visakhapatnam.

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IN THE COURT OF SPECIAL MAGISTRATE-IV, VISAKHAPATNAM.

Present: Sri L.Apparao, Spl.Magistrate-IV.

I/C of Special Magistrate court-V

Thursday, the 20th day of October, 2022.

Calendar Case No.5030/2019

1.Sl. Number: CC.5030/2019 on the file of IV Special

Magistrate, Visakhapatnam (Old C.C.5030/19

on the file of IV ACMM Court, Visakhapatnam).

2.The date of offence: 18-09-2019

3.Name of the complainant: Senapathi Satyanarayana, S/o Sanyasi Rao, aged 42 years, resident of D.No.8-62-7, Vidyanagar colony, Chinnawaltair, Visakhapatnam-530003.

4.Name of the accused: Koppisetti Manikyyala Narasinga Rao, S/o Venkata Surya Prakasharao, aged 37 years, resident of D.No.58-12-19/8, Flat No.302, Simhadri residency, Old Karasa, Visakhapatnam-530009.

5.Offence : Punishable under sec. 138 of N.I Act.

6.Plea of the accused: Total denial.

This case coming on for final hearing on 27-09-2022 before me in the presence of Sri P.V.S.Sai Kumar and K.Vinod Kumar, Advocates for the

Complainant and of Ch.Rani / Indira Bhavani advocates for the accused, and having stood over for consideration till this day, this Court delivered the following:

“J U D G M E N T “

This is a private complaint filed u/sec.190 (1) (a) and 200 of Cr.P.C for the offence punishable u/sec.138 and 142 of N.I.Act. 1881, R/W section 357 of Cr.P.C.

This case is of the year 2019 received by transfer from IV Addl. Chief

Metropolitan Magistrate's Court, Visakhapatnam.

The brief averments of the complaint are as follows:

The accused borrowed an amount of Rs.2,00,000/- from the complainant on 9-6-2018 for the purpose of family expenses and to discharge sundry debts, after receipt of cash consideration he executed a demand promissory note in favour of the complainant on the even date agreeing to repay the same with interest at 24% p.a., either to him or to his order on demand at the residence, 2 that on repeated requests and demands made by the complainant, the accused issued a cheque bearing No.896768 dt.18.09.2019 for Rs.1,00,000/- drawn on

Indian Bank, Maharanipeta branch, Visakhapatnam towards part payment of the above said debt, that he presented the said cheque for collection on 18-09-2019 in his account No.105600011008946 through his banker i.e., Andhra Bank,

Siripuram branch, Visakhapatnam for payment. However, the said cheuqe was returned unpaid by the accused banker i.e., Indian Bank, Maharanipeta branch,

Vsp and the said cheque was returned with an endorsement “Refer to drawer” vide memo dt.19-09-2019, he got issued a registered lawyer's notice dt.11.10.2019 to the accused to pay the cheque amount within 15 days from the date of receipt of the legal notice and the said notice was received by the accused on 15-10-2019, but neither paid any amount nor sent any reply.

The complaint was taken on file for the offence punishable U/s 138 of

N.I.Act against the accused.

After appearance of the accused before the Court, copies of documents were furnished to him.

The accused was examined under sec.251 Cr.P.C and he denied and claims to be tried.

In order to prove the case of the complainant, he himself is examined as

PW1 and got marked six documents as Ex.P1 to P6. He has also examined

B.Gautham who is the accused banker as PW2 and got marked Ex.X1 authorization given to him to give evidence, Ex.X2 statement of account of the accused for the period from 01-06-2019 to 31.10.2019 and Ex.X3 is the extract from the cheque return register showing the details of the returned cheque. He has also examined Madhupada Ramakrishna who is the scribe of Ex.P1 pronote as PW3.

After closure of the complainant side evidence the accused was examined under sec.313 Cr.P.C with regard to the incriminating circumstances appearing against him for which he has stated that the cheque and signature on it and the signature on the pronote are belonged to him and denied the rest.

On behalf of the accused no oral or documentary evidence is adduced.

Heard the arguments of both sides.

Now the points for consideration are:-

Points. 1. Whether the Ex.P2 cheque was issued towards legally enforceable debt?

2. Whether the complainant has proved the guilt of the accused for the offence punishable under sec.138 of 3

N.I.Act beyond all reasonable doubt?

POINT No.1:-

The complainant who is examined as PW1 has stated by way of his chief examination affidavit reiterating the contents of the complaint. He has also stated about filing of the documents which are marked as Ex.P1 to Ex.P6 and contents of the said documents.

On perusal of Ex.P1 it is the promissory note dt.09.06.2018 executed by the accused in favour of the complainant by borrowing an amount of

Rs.2,00,000/- from the complainant agreeing to repay the same with interest @ 24% p.a and the detailed addresses of both parties were clearly noted therein and on further perusal of it the accused signed across the two revenue stamps affixed on the pronote in English as K.M.Narasinga Rao and underneath it he wrote his name in capital letters in brackets and underneath it he wrote his full name in capital letters and it was scribed by Madhupada Ramakrishna and attested by T.Ganga Siva Prasad and V.Jagadeesh Kumar.

On perusal of Ex.P2 it is the cheque dt.18-09-2019 issued by the accused in favour of the complainant for an amount of Rs.1,00,000/- drawn on Indian

Bank, Maharanipeta branch, Vsp and on further perusal of the Ex.P2 it is very clear that the accused signed in English as K.M.Narasinga Rao on the cheque and the account number of the accused were printed on it.

On perusal of Ex.P3 it is the cheque return memo dt.19-09-2019 for return of the Ex.P2 cheque as “Refer to drawer” and the banker made the round seal rubber stamp of the concerned bank and the bank officer put his initial and the serial number of the cheque and the amount covered under the cheque were clearly noted in it.

On perusal of Ex.P4 it is the legal notice dt.11-10-2019 got issued by the complainant to the accused intimating about return of the Ex.P2 cheque as “Refer to drawer” and calling upon him to pay the cheque amount within 10 days from the date of receipt of the legal notice.

On perusal of Ex.P5 it is the postal receipt dt.11-10-2019 for sending the notice to the accused.

On perusal of Ex.P6 it is the acknowledgment dt.15-10-2019 for receipt of the legal notice got issued to the accused by the accused.

Ex.X1 It is the authorization given to the PW2 to give evidence.

Ex.X2 it is the statement of account of the accused for the period from 01.06.2019 to 31.10.2019.

Ex.X3 it is the extract from cheque return register showing the details of 4 the returned cheque.

The complainant who is examined as PW1 has stated all the necessary facts by way of his chief examination affidavit. The complainant has filed all the necessary documents by taking all the necessary steps in time which are contemplated u/sec.138 of N.I.Act.

The oral evidence of PW1 has clearly supported the contents of the documentary evidence adduced by the complainant. PW2 B.Gautham Assistant

Manager, who is examined as PW2 has stated by way of his chief examination that the accused is having account in their branch vide account No.968665079.

Ex.X1 is the authorization given to him to give evidence in this case today. Ex.X2 is the statement of account of the accused for the period from 1-6-2019 to 31- 10-2019. Ex.X3 is the extract from the cheque return register showing the details of the returned cheque and stated that Ex.P2 cheque was returned because of insufficiency of funds under Ex.P3 cheque return memo given by the Union Bank of India and that Ex.P2 cheque leaf emanated from a cheque book given by their branch to the accused and that the cheque dishonour memo Ex.P3 was given by the Andhra Bank on their information. Madhupada Ramakrishna who is the scribe of the Ex.P1 pronote is examined as PW3 and has stated by way of his chief examination evidence affidavit that the accused borrowed an amount of

Rs.2,00,000/- from the complainant on 09-06-2018 for the purpose of family expenses and clearing sundry debts, that having received the consideration, the accused executed a promissory note in favour of the complainant on the even date, agreeing to repay the same with interest @ 24% p.a either to the complainant or his order on demand. The evidence of PW3 has clearly corroborated the evidence of PW1 with regard to the borrowal of the amount by the accused from the complainant and execution of the Ex.P3 pronote etc., facts and supported the contents of the Ex.P1 pronote. Though the PWs 1 and 3 were cross examined at length by the counsel of the accused he failed to elicit any useful material to discredit the oral and documentary evidence adduced by the complainant. PW2 is not cross examined and reported as nil. For the reasons best known to the accused he failed to come into witness box to give evidence and failed to file any scrap of paper to support his case. For the reasons best known to the accused he failed to take any steps either against the complainant or against anybody either by giving any report to the police or by filing complaint or by giving legal notice and failed to give any reply though he himself received the notice.

During 251 Cr.P.C examination the accused has denied the case of the complainant.

During 313 Cr.P.C examination he has stated that the cheque and signature 5 on it and the signature on the pronote are belonged to him and denied the rest.

During cross examination of the PW1 the case of the accused is that the accused did not borrow any amount from him under the promissory note and he did not execute the promissory note at all and the signature on the cheque Ex.P2 also does not belong to the accused. The accused has taken different pleas during different stages which cannot be believed. One way or the other the accused admitted the cheque and signature thereon. When the accused admitted the cheque and signature thereon the statutory presumption u/s 139 comes into play, the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt, as per the observations made by the

Hon'ble Apex court in Rangappa, Appellant Vs. Sri Mohan, Respondent and

Rohitbhai Jivanlal Patel Vs. State of Gujarat & Anr. As per the observations made by the Hon'ble Apex court in M/s Kalamani Tex v. P.Balasubramanian (Supreme

Court of India, February 10, 2021), once the accused had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt, the trial court fell in error when it called upon the complainant to explain the circumstances under which the accused were liable to pay, such approach of the trial court was directly in the teeth of the established legal position, and amounts to a patent error of law. Though the presumption mandates u/sec.139 of the N.I.Act is rebuttable presumption the accused failed to rebut the same either by way of cross examination of Pws 1 to 3 or other wise. It is not the case of the accused that Ex.P2 cheque was not returned from the bank as Refer to drawer vide Ex.P2 cheque return memo. It is not the case of the accused that he made the payment covered under the Ex.P2 cheque.

On comparison of the signatures of the accused found on Ex.P1 pronote and Ex.P2 cheque with the signatures of the accused made on his 251 Cr.P.C examination and 313 Cr.P.C examination they are similar.

So in view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, admissions made by the accused, presumption mandates u/sec.139 of N.I.Act and failure to rebut the presumption mandates u/sec.139 of N.I.Act by the accused and the discussions made above I am of the considered view that the accused issued Ex.P2 cheque towards legally enforceable debt and the said cheque was returned as “Refer to

Drawer” on it's presentation in the bank for collection and the complainant got issued the legal notice to the accused and it was received by him and did not take any steps and did not give any reply and did not make any payment and he failed to raise any probable defence. Hence point no.1 is answered accordingly in favour of the complainant and against the accused.

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Point No.2:-

In order to support the case of the complainant the learned counsel for the complainant has cited the following decisions reported in (1) AIR 2001 Supreme Court 2895 in K.N.Beena, Appellant vs. Muniyappan and another, Respondents. Wherein the Hon'ble Supreme Court observed that in our view the impugned judgment cannot be sustained at all. The judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under

Section 118, unless the contrary was proved, it is to be presumed that the

Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the 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, the

Court has to presume that the cheque had been issued for a debt or liability.

This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P.Dalal Vs. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view.

(2) 2001 AIR (SC) 1315 [2001] 3 JT 508 in Ashok Yeshwant Badave Versus

Surendra Madhavrao Nighojakar. Wherein the 3 Judge bench of the Hon'ble

Supreme Court of India observed that “Section 138 – 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 offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, 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 the drawn on 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, 7 within fifteen 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.

(3) (2010) 11 Supreme Court cases 441, in Rangappa, Appellant Vs. Sri

Mohan, Respondent. Wherein the 3 Judge bench of the Hon'ble Supreme Court observed that since appellant admitted that signature on the cheque was his, statutory presumption u/s 139 comes into play. It is also observed that the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt. In the present case in hand the accused failed to raise any probable defence and he was also not able to contest the existence of the legally enforceable debt or liability.

(4) Criminal Appeal No.508 of 2019 (Arising out of Special Leave Petition (Crl.) 1883 of 2018 in Rohitbhai Jivanlal Patel – Appellant (S) Vs. State of Gujarat & Anr – Respondent (S). Wherein the Hon'ble Apex court observed that the respondent No.2 had merely refuted on flimsy ground of his having transacted with witness Jagdishbhai and not with the complainant, has failed to discharge the burden which has shifted upon him. It is to be noted that the respondent

No.2 has admitted his signature on the impugned cheque. At no point of time, the cheque has been disputed. Once this fact is acknowledged that the signature on the cheque is that of the respondent No.2-accused, section 139 of the

Negotiable Instruments Act would mandate the presumption that the cheque concerns a legally enforceable debt or liability.

(5) As per the observations made by the Hon'ble Apex court in M/s

Kalamani Tex v. P. Balasubramanian (Supreme Court of India, February 10, 2021), once the accused had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt, the trial court fell in error when it called upon the complainant to explain the circumstances under which the accused were liable to pay, such approach of the trial court was directly in the teeth of the established legal position, and amounts to a patent error of law.

(6) Special leave petition (criminal) diary No(s).13470/2019 decided on 12- 08-2022 between P.Rasiya ….Petitioner (s) Vs Abdul Nazer & Another ….Respondent (s). Wherein the Hon'ble Apex court observed that by the impugned common judgment and order, the High court has reversed the concurrent findings recorded by both the courts below and has acquitted the accused on the ground that, in the complaint, the complainant has not specifically stated the nature of transactions and the source of fund. However, the High court has failed to note the presumption under section 139 of the 8

N.I.Act and the Hon'ble Apex court quashed and set side the acquittal judgment passed by the Hon'ble High court and that the order passed by the learned trial court convicting the accused for the offence punishable u/sec.138 of N.I.Act confirmed / modified by the learned sessions court is restored.

(7) Gorantla Venkateswara Rao Vs Kolla Veerabhadra Rao and another, 2006 Cr L J page 1 where in it is observed by the Hon'ble High court of A.P. that there are no other probable circumstances placed by the accused in the process of discharge of his burden. The failure of the accused in giving reply to the legal notice issued by PW1 is one of the strong circumstances to draw an inference that the accused borrowed the amount from PW1 and the cheque was issued towards part payment of the legally enforceable debt.

(8) AIR 2001 SUPREME COURT 3897 in Hiten P.Dalal. Appellant v.

Bratindranath Banerjee. Respondent. Wherein 3 Judge Bench of the Hon'ble Apex court observed that the presumption that cheque was drawn for discharge of liability of drawer is presumption of law. It is also observed with regard to the rebuttal evidence that mere plausible explanation is not sufficient and proof of explanation is necessary.

It was also observed by the Hon'ble Apex court that plea by the accused drawer that cheques issued by him to complainant bank were not given to discharge his debt due to bank but were given for intended transactions. No defence witness giving evidence in support of such plea. Not tenable since he has not applied to court for permission to fulfil obligation and it was also held by the Hon'ble Apex court that the defence was improbable and his conviction by raising presumption was proper.

(9) 2015 (1) ALT (Crl.) 68 (A.P) in Om Pralasj Agarwal v. Khaja Krishna

Prasad and another. Wherein our Hon'ble High court observed that the object and intention of the penal provisions of Chapter XVII (Sections 138 to 147) are to prevent issuing of cheques in playful manner or with dishonest intention or with no mind to honour or without sufficient funds in the account maintained by the drawer in Bank and induce the payee/holder or holder in due course to act upon it.

(10) Criminal Appeal No.728 of 2015 (Arising out of SLP (Crl.) No.8091 of 2011) in T.Vasanthakumar Vs Vijayakumari on 28 April, 2015. Wherein the

Hon'ble Apex court observed that 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.

(11) 2016 0 Supreme (SC) 730 in Sampelly Satyanarayana Rao – Appellant

Versus Indian Renuwable Energy Development Agency Limited – Respondent.

Wherein the Hon'ble Apex court observed that cheques represent the 9 outstanding liability and dishonour of such cheque would fall under section 138 of N.I.Act. Wherein the Agreement showing post dated cheques as security, but refers to the cheques being towards repayment of installments. Repayment becoming due the moment the loan is advanced and the installment falls due. So the cheques represent the outstanding liability. As such dishonour of such cheque would fall u/sec.138 of the N.I.Act, as per the observation made by the

Hon'ble Apex court in Para 11 of the Judgment.

It is also observed by the Hon'ble Apex court that once issuance of a cheque and signature thereon are admitted presumption of a legally enforceable debt in favour of the holder of the cheque arises. Accused may rebut the presumption but mere statement of the accused may not be sufficient.

(12) 2012 0 Supreme (S.C) 842 Crl. Appeals Nos.1870-1909 of 2012 in M/s

Lakshmi Dyechem v. State of Gujarat & others. Wherein the Hon'ble supreme court observed that the expression amount of money is insufficient is a genus and dishonour for reasons such as account closed, payment stopped, referred to the drawer are only species of that genus. Similarly dishonour on the ground that the signatures do not match or that the image is not found which too implies and would constitute dishonour.

(13) I.C.D.S.Ltd vs Beena Shabeer & Anr on 12 August, 2002 in I.C.D.S Ltd, - Petitioner Vs Beena Shabeer – Respondent. Wherein the Hon'ble Apex court observed that the language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of section 138 of the Act.

(14) Criminal Appeal Nos.230-231 of 2019 in Bir Singh – Appellant versus

Mukesh Kumar – Respondent. Wherein the Hon'ble Apex court observed that section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under sec.139 of the

Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts.

(15) Criminal Appeal No. of 2019 (Arising out of S.L.P. (Crl.) No(s).

3858/2019) in Pavan Diliprao Dike – Appellant(s) versus Vishal Narendrabhai

Parmar – Respondent(s). Wherein the Hon'ble Apex court observed that the trial court committed an error in placing heavy burden on the complainant to prove the debt.

(16) Criminal Appeal No.1545 of 2019 (Arising out of SLP (CRL) No.3452 of 2019 in Uttam Ram – Appellant (s) versus Devinder Singh Hudan & Anr – 10

Respondent (s). Wherein the Hon'ble Apex court observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the

Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt, by referring the decision rendered by the Hon'ble Apex court (2019) 4 SCC 197.

(17) AIR 2004 Supreme Court 408 Paragraph 25 in Goa Plast Pvt.Ltd Vs.

Chico Ursula D'Souza, wherein the Hon'ble Apex Court held that “... an unscrupulous drawer normally taken various pleas to defeat the genuine claim of the payee”...

In view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, observations made in point no.1, in view of the decisions cited by the learned counsel for the complainant and in view of the observations made in the said decisions by their Lordships I am of the considered view that the accused cannot be escaped from liability under any circumstances and the complainant has proved the guilt of the accused for the offence punishable under sec.138 of N.I.Act beyond all reasonable doubt. Hence point no.2 is answered accordingly in favour of the complainant and against the accused.

Hence the accused is found guilty for the offence punishable under

Section.138 of Negotiable Instrument Act and he is convicted U/sec.255(2)

Cr.P.C. for the said offence.

Dictated to the Stenographer and transcribed by her, corrected and

pronounced by me in the open court, this the 20th day of October, 2022.

Spl.Magistrate–IV I/C Special Magistrate-V Visakhapatnam

When the accused is questioned with regard to the quantum of sentence to be imposed, he has pleaded for mercy of the Court by stating that he has got his wife and children and they are depending upon him.

In view of the present facts and circumstances of the case, this is not a fit case to release the accused by applying the Provisions of Sec.360 of Cr.P.C or

Probation of Offender's Act.

By considering the present facts and circumstances of the case and the submissions made by the accused I am of the considered view that if the accused is sentenced to suffer S.I for a period of six months it would be just and proper.

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In the result, the accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.P.C for the said offence and he is sentenced to suffer simple imprisonment for six months.

He is entitled for set off of the period under gone by him u/sec 428 Cr.P.C.

The accused is informed with regard to the right to prefer an appeal and if necessary to provide legal aid to defend him in the appeal through the legal services authority. For which the accused stated that he knows his rights and he does not want any legal aid as he is having sufficient means to engage an advocate to defend his case.

Spl.Magistrate–IV I/C Special Magistrate-V Visakhapatnam Appendix of Evidence

Witnesses examined for complainant :- PW1/ Senapathi Satyanarayana PW2/ B.Gautham PW3/ Madhupada Ramakrishna Witnesses examined for accused : - None Documents marked for complainant :-

1) Ex.P1 Promissory note dt.09-06-2018

2) Ex.P2 Cheque dt.18-09-2019

3) Ex.P3 Cheque return memo dt.19-09-2019

4) Ex.P4 Registered lawyer's notice dt.11-10-2019

5) Ex.P5 Postal receipt dt.11-10-2019

6) Ex.P6 Acknowledgment dt.15.10.2019 Documents marked for accused : - NIL

Documents marked for third party : -

1) Ex.X1 Authorization given to the PW2 by their Asst. Manager to give evidence.

2) Ex.X2 The statement of account of the accused for the period from 01.06.2019 to 31.10.2019.

3) Ex.X3 The extract from the cheque return register showing the details of the returned cheque.

Spl.Magistrate–IV I/C Special Magistrate-V Visakhapatnam.

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CALENDAR AND JUDGMENT

DISTRICT : : VISAKHAPATNAM

IN THE COURT OF THE SPECIAL MAGISTRATE-IV, VISAKHAPATNAM

C.C.NO.5030/2019

DATE OF OFFENCE:

1. Report of complaint:04.11.2019 2.Apprehension of accused:19.11.2019

3. Release of Bail:-----

4. Commencement of trial:17.12.2021

5. Close of trial:06.09.2022

6. Date of Judgment:20.10.2022

EXPLANATION FOR THE DELAY:

The delay is due to non­production of witnesses by the complainant.

JUDGMENT IN CALENDAR CASE NO: C.C.5030/2019 on the file of IV Special Magistrate Court, Visakhapatnam. (Old C.C.No.5030/2019 on the file of IV Addl. Chief Metropolitan Magistrate Court, Visakhapatnam).

COMPLAINANT: Senapathi Satyanarayana, S/o Sanyasi Rao, aged 42 years, resident of D.No. 8-62-7, Vidyanagar colony, Chinnawaltair, Visakhapatnam-530003.

ACCUSED: Koppisetti Manikyyala Narasinga Rao, S/o Venkata Surya Prakasharao, aged 37 years, resident of D.No.58-12-19/8, Flat No.302, Simhadri residency, Old Karasa, Visakhapatnam-530009.

OFFENCE: Dishonour of cheque for insufficiency of funds, Punishable under sec.138 of Negotiable Instruments Act.

FINDING:Found guilty.

SENTENCE:The accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.P.C for the said offence and he is sentenced to suffer simple imprisonment for a period of six months.

He is entitled for set off of the period under gone by him under Sec.428 Cr.P.C.

Sentence is suspended till 18.11.2022on executing bond for an amount of Rs.5,000/- with two sureties for a like sum as per the order dated 20.10.2022 in Crl.M.P.No.6922/2022 and the accused has executed the bond as ordered.

Special Magistrate - IV FAC Special Magistrate-V, Visakhapatnam.

1

IN THE COURT OF SPECIAL MAGISTRATE-IV, VISAKHAPATNAM.

Present: Sri L.Apparao, Spl.Magistrate-IV.

Wednesday, the 3rd day of May, 2023.

Calendar Case No.2291/2022

1.Sl. Number: CC.2291/2022 on the file of IV Special

Magistrate, Visakhapatnam (Old C.C.2291/22

on the file of I ACMM Court, Visakhapatnam).

2.The date of offence: 14-02-2022

3.Name of the complainant: Medapati Mohana Ramakrishna Reddy, S/o Venkata Reddy, Hindu, aged about 62 years, business, presently residing at D.No.49-44- 24, F.No.201, Sai Bharathi Residency, Akkayyapalem, Visakhapatnam.

4.Name of the accused: Kandala Phani Manohar, S/o K.A.V.V.L.Narasimha Acharyulu, Hindu, aged about 45 years, Business, residing at H.No.14-433, Plot No.A-3, Simhadrinagar, Balaji Gardens, Gopalapatnam, Visakhapatnam-27.

5.Offence : Punishable under sec. 138 of N.I Act.

6.Plea of the accused: Total denial.

This case coming on for final hearing on 11-04-2023 before me in the presence of Sri M.V.R.K.Reddy, Advocate for the Complainant and of

K.V.Viswanadh, advocate for the accused, and having stood over for consideration till this day, this Court delivered the following:

“J U D G M E N T “

This is a private complaint filed u/sec.190(1)(a) and 200 of Cr.P.C for the offence punishable u/sec.138 and 142 of N.I.Act. This case is of the year 2022 received by transfer from I Addl. Chief Metropolitan Magistrate's Court,

Visakhapatnam.

The brief averments of the complaint are as follows:

The accused borrowed an amount of Rs.4,80,000/- from the complainant on 29-12-2019 for the purpose of business, meeting family expenses and to discharge sundry debts and executed a demand promissory note in favour of the complainant on the even date agreeing to repay the same with interest @ 2% per month per hundred either to the complainant or to his order on demand, the 2 above transaction is took place at the complainant residence, that on several demands made by him, the accused issued a post dated cheque bearing

No.533088 “530002024” dt.14.02.2022 for Rs.6,30,000/- drawn on State Bank of

India, Simhachalam branch, Visakhapatnam, towards part satisfaction of the above said promissory note debt, that he presented the said cheque for collection through his banker i.e., State Bank of India, Lalithanagar branch,

Sankaramatam road, Visakhapatnam and the said cheque was returned with an endorsement “Funds Insufficient” vide cheque return memo dt.14-02-2022, that the accused requested the complainant to present the said cheque on 24-03- 2022 for collection, on the date of presentation of the cheque the accused promised to see sufficient money (balance amount)in his bank account and definitely honour the cheque on the date of presentation, the complainant obliged the promises of the accused and having trust on his words and accordingly as instructed by the accused the complainant second time presented the said cheque for collection in his bank “State Bank of India,

Lalithanagar branch, Sankaramatam road, Vsp, the said cheque was dishonoured and returned by his bank vide memo dt.24-3-2022 for the reasons of “Funds

Insufficient”, he got issued a registered lawyer's notice dt.16.04.2022 calling upon him to pay the cheque amount within 15 days from the date of receipt of the legal notice and the same was received on 20-04-2022 by the accused, but neither paid any amount nor sent any reply.

The complaint was taken on file for the offence punishable U/s 138 of

N.I.Act against the accused.

After appearance of the accused before the Court, copies of documents were furnished to him.

The accused was examined under sec.251 Cr.P.C and the accused has stated that the cheque and signature on it are belonged to him and he issued the same to the auditor and denied the rest and claims to be tried.

In order to prove the case of the complainant, he himself is examined as

PW1 and got marked seven documents as Ex.P1 to P7. The complainant got examined Isai Visweswara Rao who is the 1st attestor of Ex.P7 pronote as PW2.

After closure of the complainant side evidence the accused was examined under sec.313 Cr.P.C with regard to the incriminating circumstances appearing against him for which he has stated that he borrowed an amount of

Rs.1,50,000/- from the complainant/ PW1 and he issued his blank signed cheque and blank signed and thumb impressioned pronote towards security to the PW1 / complainant and denied the rest.

On behalf of the accused no oral or documentary evidence is adduced.

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Heard the arguments of both sides.

Now the points for consideration are:-

Points. 1. Whether the Ex.P1 cheque was issued towards legally enforceable debt?

2. Whether the complainant has proved the guilt of the accused for the offence punishable under sec.138 of

N.I.Act beyond all reasonable doubt?

POINT No.1:-

The complainant who is examined as PW1 has stated by way of his chief examination affidavit reiterating the contents of the complaint. He has also stated about filing of the documents which are marked as Ex.P1 to Ex.P5 and contents of the said documents.

On perusal of Ex.P1 it is the cheque dt.14-02-2022 issued by the accused in favour of the complainant for an amount of Rs.6,30,000/- drawn on State Bank of India, Simhachalam, Vsp and on further perusal of the Ex.P1 it is very clear that the accused signed in English as K.Phani Manohar on the cheque and the account number of the accused and his name as K.Phani Manohar were printed on it.

On perusal of Ex.P2 it is the cheque return memo dt.14-02-2022 for return of the Ex.P1 cheque as “Funds Insufficient” and the rubber stamp of the concerned bank was made and the bank officer put his initial and the serial number of the cheque and the amount covered under the cheque were clearly noted in it.

On perusal of Ex.P3 it is the cheque return memo dt.24-03-2022 for return of the Ex.P1 cheque as “Funds Insufficient” and the rubber stamp of the concerned bank was made and the bank officer put his initial and the serial number of the cheque and the amount covered under the cheque were clearly noted in it.

On perusal of Ex.P4 it is the legal notice dt.15-11-2021 got issued by the complainant to the accused intimating about return of the Ex.P1 cheque as “Funds Insufficient” and calling upon him to pay the cheque amount within 15 days from the date of receipt of the legal notice.

On perusal of Ex.P5 it is the legal notice dt.16-04-2022 got issued by the complainant to the accused intimating about return of the Ex.P1 cheque as “Funds Insufficient” and calling upon him to pay the cheque amount within 15 days from the date of receipt of the legal notice.

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On perusal of Ex.P6 it is the acknowledgment dt.20-04-2022 for receipt of the legal notice got issued to the accused.

On perusal of Ex.P7 it is the promissory note dt.29.12.2019 executed by the accused in favour of the complainant by borrowing an amount of

Rs.4,80,000/- from the complainant agreeing to repay the same with interest @ 24% p.a and the detailed addresses of both parties were clearly noted therein and on further perusal of it the accused signed across the four revenue stamps affixed on the pronote in English as K.Phani Manohar and besides that he made the thumb mark on it and it was attested by I.Visweswara Rao and G.Sai

Santhosh Kiran and signed by the scribe.

The complainant who is examined as PW1 has stated all the necessary facts by way of his chief examination affidavit. The complainant has filed all the necessary documents by taking all the necessary steps in time which are contemplated u/sec.138 of N.I.Act.

The oral evidence of PW1 has clearly supported the contents of the documentary evidence adduced by the complainant. PW2 Isai Visweswara Rao has clearly stated by way of his chief examination affidavit that the accused borrowed an amount of Rs.4,80,000/- from the complainant on 29-12-2019 for the purpose of business, meeting family expenses and to discharge his sundry debts and the accused executed a demand promissory note in favour of complainant agreeing to repay the said amount with interest @ 24% p.a. The evidence of PW2 has clearly corroborated the evidence of PW1 and supported the contents of the Ex.P7 pronote. Though the Pws 1 and 2 were cross examined at length by the counsel of the accused he failed to elicit any useful material to discredit the oral and documentary evidence adduced by the complainant. For the reasons best known to the accused he failed to come into witness box to give evidence and failed to file any scrap of paper to support his case. For the reasons best known to the accused he failed to take any steps either against the complainant or against anybody either by giving any report to the police or by filing complaint or by giving legal notice. Though the statutory notice got issued to the accused was received under Ex.P6 acknowledgment he failed to issue any reply notice denying contents of the legal notices got issued by the complainant.

During 251 Cr.P.C examination he has stated that the the cheque and signature on it are belonged to him and he issued the same to the auditor and denied the rest and claims to be tried.

During 313 Cr.P.C examination he has stated that he borrowed an amount of Rs.1,50,000/- from the complainant/ PW1 and he issued his blank signed cheque and blank signed and thumb impressioned pronote towards security to 5 the PW1 / complainant and denied the rest.

During cross examination of the PW1 the case of the accused is mere denial of the case of the complainant.

The accused has taken different pleas during different stages which cannot be believed. One way or the other the accused admitted the cheque and signature thereon. When the accused admitted the cheque and signature thereon the statutory presumption u/s 139 comes into play, the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt, as per the observations made by the Hon'ble Apex court in

Rangappa, Appellant Vs. Sri Mohan, Respondent and Rohitbhai Jivanlal Patel Vs.

State of Gujarat & Anr. As per the observations made by the Hon'ble Apex court in M/s Kalamani Tex v. P.Balasubramanian (Supreme Court of India, February 10, 2021), once the accused had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt, the trial court fell in error when it called upon the complainant to explain the circumstances under which the accused were liable to pay, such approach of the trial court was directly in the teeth of the established legal position, and amounts to a patent error of law.

Failure of the accused in giving reply to the legal notice issued by the complainant is one of the strong circumstances to draw an inference that the accused has taken the amount from the complainant and the cheque was issued towards part payment of the legally enforceable debt, as per the observation made by our Hon'ble high court in Gorantla Venkateswara Rao Vs Kolla

Veerabhadra Rao and another. Though the presumption mandates u/sec.139 of the N.I.Act is rebuttable presumption the accused failed to rebut the same either by way of cross examination of PW1 or other wise. It is not the case of the accused that Ex.P1 cheque was not returned from the bank as Funds Insufficient vide Ex.P2 & P3 cheque return memos. It is not the case of the accused that he made the payment covered under the Ex.P1 cheque.

On comparison of the signatures of the accused found on Ex.P7 pronote and Ex.P1 cheque with the signatures of the accused made on his 251 Cr.P.C examination and 313 Cr.P.C examination they are similar.

So in view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, admissions made by the accused, presumption mandates u/sec.139 of N.I.Act and failure to rebut the presumption mandates u/sec.139 of N.I.Act by the accused and the discussions made above I am of the considered view that the accused issued Ex.P1 cheque towards legally enforceable debt and the said cheque was returned as “Funds 6

Insufficient” on it's presentation in the bank for collection and the complainant got issued the legal notice to the accused and it was received under Ex.P6 acknowledgment and he did not give any reply notice and did not take any steps and did not make any payment and he failed to raise any probable defence.

Hence point no.1 is answered accordingly in favour of the complainant and against the accused.

Point No.2:-

In order to support the case of the complainant the learned counsel for the complainant has cited the following decisions reported in (1) AIR 2001 Supreme Court 2895 in K.N.Beena, Appellant vs. Muniyappan and another, Respondents. Wherein the Hon'ble Supreme Court observed that in our view the impugned judgment cannot be sustained at all. The judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under

Section 118, unless the contrary was proved, it is to be presumed that the

Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the 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, the

Court has to presume that the cheque had been issued for a debt or liability.

This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P.Dalal Vs. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view.

(2) 2001 AIR (SC) 1315 [2001] 3 JT 508 in Ashok Yeshwant Badave Versus

Surendra Madhavrao Nighojakar. Wherein the 3 Judge bench of the Hon'ble

Supreme Court of India observed that “Section 138 – 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 offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may 7 extend to one year, 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 the drawn on 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 fifteen 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.

(3) (2010) 11 Supreme Court cases 441, in Rangappa, Appellant Vs. Sri

Mohan, Respondent. Wherein the 3 Judge bench of the Hon'ble Supreme Court observed that since appellant admitted that signature on the cheque was his, statutory presumption u/s 139 comes into play. It is also observed that the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt. In the present case in hand the accused failed to raise any probable defence and he was also not able to contest the existence of the legally enforceable debt or liability.

(4) Criminal Appeal No.508 of 2019 (Arising out of Special Leave Petition (Crl.) 1883 of 2018 in Rohitbhai Jivanlal Patel – Appellant (S) Vs. State of Gujarat & Anr – Respondent (S). Wherein the Hon'ble Apex court observed that the respondent No.2 had merely refuted on flimsy ground of his having transacted with witness Jagdishbhai and not with the complainant, has failed to discharge the burden which has shifted upon him. It is to be noted that the respondent

No.2 has admitted his signature on the impugned cheque. At no point of time, the cheque has been disputed. Once this fact is acknowledged that the signature on the cheque is that of the respondent No.2-accused, section 139 of the

Negotiable Instruments Act would mandate the presumption that the cheque concerns a legally enforceable debt or liability.

(5) As per the observations made by the Hon'ble Apex court in M/s

Kalamani Tex v. P. Balasubramanian (Supreme Court of India, February 10, 2021), once the accused had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt, the trial court fell in error when it called upon the complainant to explain the circumstances under which the accused were liable to pay, such approach of the trial court was directly in the teeth of the established legal position, and amounts to a patent error of law.

(6) Special leave petition (criminal) diary No(s).13470/2019 decided on 12- 8 08-2022 between P.Rasiya ….Petitioner (s) Vs Abdul Nazer & Another ….Respondent (s). Wherein the Hon'ble Apex court observed that by the impugned common judgment and order, the High court has reversed the concurrent findings recorded by both the courts below and has acquitted the accused on the ground that, in the complaint, the complainant has not specifically stated the nature of transactions and the source of fund. However, the High court has failed to note the presumption under section 139 of the

N.I.Act and the Hon'ble Apex court quashed and set side the acquittal judgment passed by the Hon'ble High court and that the order passed by the learned trial court convicting the accused for the offence punishable u/sec.138 of N.I.Act confirmed / modified by the learned sessions court is restored.

(7) AIR 2001 SUPREME COURT 3897 in Hiten P.Dalal. Appellant v.

Bratindranath Banerjee. Respondent. Wherein 3 Judge Bench of the Hon'ble Apex court observed that the presumption that cheque was drawn for discharge of liability of drawer is presumption of law. It is also observed with regard to the rebuttal evidence that mere plausible explanation is not sufficient and proof of explanation is necessary.

It was also observed by the Hon'ble Apex court that plea by the accused drawer that cheques issued by him to complainant bank were not given to discharge his debt due to bank but were given for intended transactions. No defence witness giving evidence in support of such plea. Not tenable since he has not applied to court for permission to fulfil obligation and it was also held by the Hon'ble Apex court that the defence was improbable and his conviction by raising presumption was proper.

(8) 2015 (1) ALT (Crl.) 68 (A.P) in Om Pralasj Agarwal v. Khaja Krishna

Prasad and another. Wherein our Hon'ble High court observed that the object and intention of the penal provisions of Chapter XVII (Sections 138 to 147) are to prevent issuing of cheques in playful manner or with dishonest intention or with no mind to honour or without sufficient funds in the account maintained by the drawer in Bank and induce the payee/holder or holder in due course to act upon it.

(9) Criminal Appeal No.728 of 2015 (Arising out of SLP (Crl.) No.8091 of 2011) in T.Vasanthakumar Vs Vijayakumari on 28 April, 2015. Wherein the

Hon'ble Apex court observed that 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.

(10) 2016 0 Supreme (SC) 730 in Sampelly Satyanarayana Rao – Appellant

Versus Indian Renuwable Energy Development Agency Limited – Respondent.

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Wherein the Hon'ble Apex court observed that cheques represent the outstanding liability and dishonour of such cheque would fall under section 138 of N.I.Act. Wherein the Agreement showing post dated cheques as security, but refers to the cheques being towards repayment of installments. Repayment becoming due the moment the loan is advanced and the installment falls due. So the cheques represent the outstanding liability. As such dishonour of such cheque would fall u/sec.138 of the N.I.Act, as per the observation made by the

Hon'ble Apex court in Para 11 of the Judgment.

It is also observed by the Hon'ble Apex court that once issuance of a cheque and signature thereon are admitted presumption of a legally enforceable debt in favour of the holder of the cheque arises. Accused may rebut the presumption but mere statement of the accused may not be sufficient.

(11) Gorantla Venkateswara Rao Vs Kolla Veerabhadra Rao and another, 2006 Cr L J page 1 where in it is observed by the Hon'ble High court of A.P. that there are no other probable circumstances placed by the accused in the process of discharge of his burden. The failure of the accused in giving reply to the legal notice issued by PW1 is one of the strong circumstances to draw an inference that the accused borrowed the amount from PW1 and the cheque was issued towards part payment of the legally enforceable debt.

(12) 2015 (2) ALT (Crl.)137 (A.P.) in P.Ranga Rao Vs. M/s.Bharath Vaddera

Labour Contractor and others. In that case the notice was said to have been served whose relationship with the accused is not established like the present case on hand. The contention raised by the accused was negatived by the

Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and the

State of Andhra Pradesh relying upon the larger bench decision rendered by the

Hon'ble Apex Court, in Alavi Haji Vs Palapetty Muhammed & Another.

(13) I.C.D.S.Ltd vs Beena Shabeer & Anr on 12 August, 2002 in I.C.D.S Ltd, - Petitioner Vs Beena Shabeer – Respondent. Wherein the Hon'ble Apex court observed that the language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of section 138 of the Act.

(14) Criminal Appeal Nos.230-231 of 2019 in Bir Singh – Appellant versus

Mukesh Kumar – Respondent. Wherein the Hon'ble Apex court observed that section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under sec.139 of the

Negotiable Instruments Act is a presumption of law, as distinguished from 10 presumption of facts.

(15) Criminal Appeal No. of 2019 (Arising out of S.L.P. (Crl.) No(s).

3858/2019) in Pavan Diliprao Dike – Appellant(s) versus Vishal Narendrabhai

Parmar – Respondent(s). Wherein the Hon'ble Apex court observed that the trial court committed an error in placing heavy burden on the complainant to prove the debt.

(16) Criminal Appeal No.1545 of 2019 (Arising out of SLP (CRL) No.3452 of 2019 in Uttam Ram – Appellant (s) versus Devinder Singh Hudan & Anr –

Respondent (s). Wherein the Hon'ble Apex court observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the

Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt, by referring the decision rendered by the Hon'ble Apex court (2019) 4 SCC 197.

(17) AIR 2004 Supreme Court 408 Paragraph 25 in Goa Plast Pvt.Ltd Vs.

Chico Ursula D'Souza, wherein the Hon'ble Apex Court held that “... an unscrupulous drawer normally taken various pleas to defeat the genuine claim of the payee”...

In view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, observations made in point no.1, in view of the decisions cited by the learned counsel for the complainant and in view of the observations made in the said decisions by their Lordships I am of the considered view that the accused cannot be escaped from liability under any circumstances and the complainant has proved the guilt of the accused for the offence punishable under sec.138 of N.I.Act beyond all reasonable doubt. Hence point no.2 is answered accordingly in favour of the complainant and against the accused.

Hence the accused is found guilty for the offence punishable under

Section.138 of Negotiable Instrument Act and he is convicted U/sec.255(2)

Cr.P.C. for the said offence.

Dictated to the Stenographer and transcribed by her, corrected and

pronounced by me in the open court, this the 3rd day of May, 2023.

Special Magistrate-IV, Visakhapatnam.

When the accused is questioned with regard to the quantum of sentence to be imposed, he has pleaded for mercy of the court by stating that he has got his 11 wife and children and they are depending upon him.

In view of the present facts and circumstances of the case, this is not a fit case to release the accused by applying the Provisions of Sec.360 of Cr.PC or

Probation of Offender's Act.

By considering the present facts and circumstances of the case and the submissions made by the accused I am of the considered view that if the accused is sentenced to suffer S.I for a period of six months it would be just and proper.

In the result, the accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.PC for the said offence and he is sentenced to suffer simple imprisonment for six months.

He is entitled for set off of the period under gone by him u/sec 428 Cr.PC.

The accused is informed with regard to the right to prefer an appeal and if necessary to provide legal aid to defend him in the appeal through the legal services authority. For which the accused stated that he knows his rights and he does not want any legal aid as he is having sufficient means to engage an advocate to defend his case.

Spl. Magistrate – IV Visakhapatnam Appendix of Evidence

Witnesses examined for complainant :- PW1/ Medapati Mohana Ramakrishna Reddy PW2/ Isai Visweswara Rao Witnesses examined for accused : - None Documents marked for complainant :-

1) Ex.P1 Cheque dt.14-02-2022

2) Ex.P2 Cheque return memo dt.14-02-2022

3) Ex.P3 Cheque return memo dt.24-02-2022

4) Ex.P4 Registered lawyer's notice dt.15-11-2021

5) Ex.P5 Registered lawyer's notice dt.16-04-2022

6) Ex.P6 Acknowledgment dt.20-04-2022

7) Ex.P7 Promissory note dt.29-12-2019 Documents marked for accused : - NIL

Special Magistrate-IV, Visakhapatnam.

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CALENDAR AND JUDGMENT

DISTRICT : : VISAKHAPATNAM

IN THE COURT OF THE SPECIAL MAGISTRATE-IV, VISAKHAPATNAM

C.C.NO.2291/2022

DATE OF OFFENCE:

1. Report of complaint:27.05.2022

2. Apprehension of accused:08.09.2022

3. Release of Bail:-----

4. Commencement of trial:04.11.2022

5. Close of trial:11.04.2023

6. Date of Judgment:03.05.2023

EXPLANATION FOR THE DELAY:

The delay is due to non­production of witnesses by the complainant.

JUDGMENT IN CALENDAR CASE NO: C.C.2291/2022 on the file of IV Special Magistrate Court, Visakhapatnam. (Old C.C.No.2291/2022 on the file of I Addl. Chief Metropolitan Magistrate Court, Visakhapatnam).

COMPLAINANT:

Medapati Mohana Ramakrishna Reddy, S/o Venkata Reddy, Hindu, aged about 62 years, business, presently residing at D.No.49-44-24, F.No.201, Sai Bharathi Residency, Akkayyapalem, Visakhapatnam.

ACCUSED: Kandala Phani Manohar, S/o K.A.V.V.L.Narasimha Acharyulu, Hindu, aged about 45 years, Business, residing at H.No.14-433, Plot No.A-3, Simhadrinagar, Balaji Gardens, Gopalapatnam, Visakhapatnam-27.

OFFENCE: Dishonour of cheque for insufficiency of funds, Punishable under sec.138 of Negotiable Instruments Act.

FINDING:Found guilty.

SENTENCE: The accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.P.C for the said offence and he is sentenced to suffer simple imprisonment for a period of six months.

He is entitled for set off of the period under gone by him under Sec.428 Cr.P.C.

Sentence is suspended till 01.06.2023 on executing bond for an amount of Rs.5,000/- with one surety for a like sum as per the order dated 03.05.2023 in Crl.M.P.No.1724/2023 and the accused has executed the bond as ordered.

Special Magistrate-IV, Visakhapatnam. \\ True copy //

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IN THE COURT OF SPECIAL MAGISTRATE-IV, VISAKHAPATNAM.

Present: Sri L.Apparao, Spl.Magistrate-IV.

FAC of Special Magistrate court -V

Wednesday, the 7th day of September, 2022.

Calendar Case No.317/2017

1.Sl. Number: CC.317/2017 on the file of IV Special

Magistrate, Visakhapatnam (Old CC

913/2016 on the file of I ACMM Court, Visakhapatnam).

2.The date of offence: 04-03-2016

3.Name of the complainant: Sadaram Visweswara Rao, S/o Appa Rao, Hindu, aged 38 years, R/at D.No.38-10-3/1, Gavara Veedhi, Marripalem, Visakhapatnam- 530018.

4.Name of the accused: Alla Veerabhadra Rao, S/o Sambaiah, Hindu, aged 45 years, R/at D.No.38-12-3, Maharanipeta, Marripalem, Visakhapatnam- 530018.

5.Offence : Punishable under sec. 138 of N.I Act.

6.Plea of the accused: Total denial.

This case coming on for final hearing on 02-09-2022 before me in the presence of Sri Rapeti Srinivasa Rao, Advocate for the Complainant and of

V.Santhosh Kumar, advocate for the accused, and having stood over for consideration till this day, this Court delivered the following:

“J U D G M E N T “

This is a private complaint filed u/secs.190(1) (a) and 200 of Cr.P.C punishable under sections.138 and 142 of N.I.Act. This case is of the year 2016 received by transfer from I Addl. Chief Metropolitan Magistrate's Court,

Visakhapatnam.

The brief averments of the complaint are as follows:

The accused approached the complainant and borrowed an amount of

Rs.2,00,000/- from the complainant on 26-04-2015 for the purpose of family expenses and discharging of sundry debts and after receipt of the said consideration in cash the accused executed a promissory note on the even date in favour of the complainant agreeing to repay the same with interest at 24% p.a., either to him or to his order on demand, that on repeated requests and 2 demands made by him, the accused did not pay any amount either interest or

principal to the complainant, the accused issued a cheque bearing No.379301

dt.04-03-2016 for Rs.1,00,000/- drawn on State Bank of India, INCS Complex branch, Naval base, Visakhapatnam-530014 towards part payment of the debt, the complainant presented the cheque for collection through his banker i.e., ICICI

Bank, RPC branch, Visakhapatnam for encashment, but the said cheque was returned with an endorsement “Exceeds Arrangement” dt.26-05-2016, he got issued a registered lawyer's notice dt.24-06-2016 to the accused demanding him to pay the cheque amount within 15 days from the date of receipt of the notice and it was returned on 25-06-2015 with an endorsement “Intimation served and not claimed”, but the accused neither paid any amount nor sent any reply.

The complaint was taken on file for the offence punishable U/s 138 of

N.I.Act against the accused.

After appearance of the accused before the Court, copies of documents were furnished to him.

The accused was examined under sec.251 Cr.P.C and he denied claimed to be tried.

In order to prove the case of the complainant, he himself is examined as

PW1 and got marked five documents as Ex.P1 to P5 during his chief examination.

Besides that the complainant has also examined B.Sattibabu who is the accused banker as PW2 and got marked Ex.X1 and Ex.X2 during his chief examination i.e., the authorization and statement of the account of the accused maintained for the period from 1-5-2016 to 31-5-2016 and P.Suresh who is the complainant's banker as PW3 and got marked Ex.X3 authorization and Ex.X4 statement of account of the complainant and S.V.Rama Rao who is the first attestor of the pronote as PW4 and the scribe of the pronote by name Ch.Srinivasa Rao as PW5.

After closure of the complainant side evidence the accused was examined under sec.313 Cr.P.C with regard to the incriminating circumstances appearing against him and he has stated that the cheque and signature on it and the signatures on the pronote are belonged to him and he also stated that he issued his blank signed cheque and blank signed pronote to some other person when he borrowed the amount and denied the rest.

On behalf of the accused no oral or documentary evidence is adduced.

Heard the arguments of both sides.

Now the points for consideration are:-

Points. 1. Whether the Ex.P2 cheque was issued towards legally enforceable debt?

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2. Whether the complainant has proved the guilt of the accused for the offence punishable under sec.138 of

N.I.Act beyond all reasonable doubt?

POINT No.1:-

The complainant who is examined as PW1 has stated by way of his chief examination affidavit reiterating the contents of the complaint. He has also stated about filing of the documents which are marked as Ex.P1 to Ex.P5 and contents of the said documents.

On perusal of Ex.P1 it is the promissory note dt.26-04-2015 executed by the accused in favour of the complainant by borrowing an amount of

Rs.2,00,000/- from the complainant agreeing to repay the same with interest @ 24% p.a and the detailed addresses of both parties were clearly noted therein and on further perusal of it the accused signed across the revenue stamp affixed on the pronote in English stylishly and underneath it he wrote his name in capital letters and it was scribed by Ch.Srinivasa Rao and attested by S.V.Rama Rao and

B.Ganesh.

On perusal of Ex.P2 it is the cheque dt.04-03-2016 issued by the accused in favour of the complainant for an amount of Rs.1,00,000/- drawn on State Bank of India, Naval Base, Visakhapatnam and on further perusal of the Ex.P2 it is very clear that the accused signed in English stylishly on the cheque and the account number of the accused and his full name as Veerabhadra Rao Alla were printed on it.

On perusal of Ex.P3 it is the cheque return memo dt.26-05-2016 for return of the Ex.P2 cheque as “Exceeds Arrangement” and the bank officer put his initial and made the round seal rubber stamp of the concerned bank and the serial number of the cheque and the amount covered under the cheque were clearly noted in it.

On perusal of Ex.P4 it is the legal notice dt.24-06-2016 got issued by the complainant to the accused intimating about return of the Ex.P2 cheque as “Exceeds Arrangement” and calling upon him to pay the cheque amount within 15 days from the date of receipt of the legal notice.

On perusal of Ex.P5 it is the returned RP cover dt.25-06-2016 for returning the same as intimation.

On perusal of Ex.X1 it is the authorization given by their chief Manager to give evidence.

On perusal of Ex.X2 it is the statement of the account of the accused for the period from 1-5-2016 to 31-5-2016.

4

On perusal of Ex.X3 it is the authorization given by their authorized signatory to give evidence.

On perusal of Ex.X4 it is the statement of account of the complainant for the period from 1-5-2016 to 30-5-2016.

The complainant who is examined as PW1 has stated all the necessary facts by way of his chief examination affidavit. The complainant has filed all the necessary documents by taking all the necessary steps in time which are contemplated u/sec.138 of N.I.Act.

The oral evidence of PW1 has clearly supported the contents of the documentary evidence adduced by the complainant. During cross examination of Pws 2 and 3 they have stated that the Ex.P2 cheque was returned as Funds

Insufficient. PW4 and PW5 stated during their evidence about the borrowal of amount of Rs.2,00,000/- by the accused from the complainant and execution of

Ex.P1 pronote etc., facts. Though the Pws 1 to 5 were cross examined at length by the counsel of the accused he failed to elicit any useful material to discredit the oral and documentary evidence adduced by the complainant. For the reasons best known to the accused he failed to come into witness box to give evidence and he failed to file any scrap of paper to support his case. For the reasons best known to the accused he got returned the statutory notice as intimation. For the reasons best known to the accused he failed to take any steps against the complainant either by giving any report to the police or by filing complaint or by giving legal notice. It is not the case of the accused that the address mentioned in the statutory notice and on the returned RP cover is not his address. The accused has not furnished any other address. During cross examination of the PW1 the case of the accused is that the accused borrowed an amount from the sister of the PW1 by name D.Uma and at that time blank signed promissory note and cheque were obtained and later when he discharged the debt the sister of the complainant did not return back those documents stating that there were misplaced and by misusing that promissory note and cheque the complainant filed this case and deposing false. During 251 Cr.P.C examination the accused has denied and claims to be tried. During 313 Cr.P.C examination the accused has stated that the cheque and signature on it and the signatures on the pronote are belonged to him and he also stated that he issued his blank signed cheque and blank signed pronote to some other person when he borrowed the amount and denied the rest. The accused has taken different pleas during different stages which cannot be believed.

One way or the other the accused admitted the cheque and signature thereon. When the accused admitted the cheque and signature thereon the statutory presumption u/s 139 comes into play, the presumption mandated by 5

Sec.139 includes a presumption that there exists a legally enforceable debt, as per the observations made by the Hon'ble Apex court in Rangappa, Appellant Vs.

Sri Mohan, Respondent and Rohitbhai Jivanlal Patel Vs. State of Gujarat & Anr.

As per the observations made by the Hon'ble Apex court in M/s Kalamani Tex v.

P.Balasubramanian (Supreme Court of India, February 10, 2021), once the accused had admitted his signatures on the cheques and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt, the trial court fell in error when it called upon the complainant to explain the circumstances under which the accused were liable to pay, such approach of the trial court was directly in the teeth of the established legal position, and amounts to a patent error of law. Though the presumption mandates u/sec.139 of the N.I.Act is rebuttable presumption the accused failed to rebut the same either by way of cross examination of Pws 1 to 5 or other wise. It is not the case of the accused that the complainant has not presented the Ex.P2 cheque for collection. It is not the case of the accused that

Ex.P2 cheque was not returned from the bank as Exceeds Arrangement vide

Ex.P3 cheque return memo. It is not the case of the accused that he made the payment covered under the Ex.P2 cheque.

On comparison of the signatures of the accused found on Ex.P1 pronote and Ex.P2 cheque with the signatures of the accused made on his 251 Cr.P.C examination and 313 Cr.P.C examination they are similar.

So in view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, admissions made by the accused, presumption mandates u/sec.139 of N.I.Act and failure to rebut the presumption mandates u/sec.139 of N.I.Act by the accused and the discussions made above I am of the considered view that the accused issued Ex.P2 cheque towards legally enforceable debt and the said cheque was returned as “Exceeds

Arrangement” on it's presentation in the bank for collection and the complainant got issued the legal notice to the accused by registered post with acknowledgment due intimating the said fact but he got returned the same as intimation and he did not take any steps and did not make any payment and he failed to raise any probable defence. Hence point no.1 is answered accordingly in favour of the complainant and against the accused.

Point No.2:-

In order to support the case of the complainant the learned counsel for the complainant has cited the following decisions reported in (1) AIR 2001 Supreme Court 2895 in K.N.Beena, Appellant vs. Muniyappan and another, Respondents. Wherein the Hon'ble Supreme Court observed that in 6 our view the impugned judgment cannot be sustained at all. The judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under

Section 118, unless the contrary was proved, it is to be presumed that the

Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the 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, the

Court has to presume that the cheque had been issued for a debt or liability.

This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P.Dalal Vs. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view.

(2) 2001 AIR (SC) 1315 [2001] 3 JT 508 in Ashok Yeshwant Badave Versus

Surendra Madhavrao Nighojakar. Wherein the 3 Judge bench of the Hon'ble

Supreme Court of India observed that “Section 138 – 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 offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, 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 the drawn on 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 fifteen 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.

(3) (2010) 11 Supreme Court cases 441, in Rangappa, Appellant Vs. Sri

Mohan, Respondent. Wherein the 3 Judge bench of the Hon'ble Supreme Court 7 observed that since appellant admitted that signature on the cheque was his, statutory presumption u/s 139 comes into play. It is also observed that the presumption mandated by Sec.139 includes a presumption that there exists a legally enforceable debt. In the present case in hand the accused failed to raise any probable defence and he was also not able to contest the existence of the legally enforceable debt or liability.

(4) Criminal Appeal No.508 of 2019 (Arising out of Special Leave Petition (Crl.) 1883 of 2018 in Rohitbhai Jivanlal Patel – Appellant (S) Vs. State of Gujarat & Anr – Respondent (S). Wherein the Hon'ble Apex court observed that the respondent No.2 had merely refuted on flimsy ground of his having transacted with witness Jagdishbhai and not with the complainant, has failed to discharge the burden which has shifted upon him. It is to be noted that the respondent

No.2 has admitted his signature on the impugned cheque. At no point of time, the cheque has been disputed. Once this fact is acknowledged that the signature on the cheque is that of the respondent No.2-accused, section 139 of the

Negotiable Instruments Act would mandate the presumption that the cheque concerns a legally enforceable debt or liability.

(5) AIR 2001 SUPREME COURT 3897 in Hiten P.Dalal. Appellant v.

Bratindranath Banerjee. Respondent. Wherein 3 Judge Bench of the Hon'ble Apex court observed that the presumption that cheque was drawn for discharge of liability of drawer is presumption of law. It is also observed with regard to the rebuttal evidence that mere plausible explanation is not sufficient and proof of explanation is necessary.

It was also observed by the Hon'ble Apex court that plea by the accused drawer that cheques issued by him to complainant bank were not given to discharge his debt due to bank but were given for intended transactions. No defence witness giving evidence in support of such plea. Not tenable since he has not applied to court for permission to fulfil obligation and it was also held by the Hon'ble Apex court that the defence was improbable and his conviction by raising presumption was proper.

(6) 2015 (1) ALT (Crl.) 68 (A.P) in Om Pralasj Agarwal v. Khaja Krishna

Prasad and another. Wherein our Hon'ble High court observed that the object and intention of the penal provisions of Chapter XVII (Sections 138 to 147) are to prevent issuing of cheques in playful manner or with dishonest intention or with no mind to honour or without sufficient funds in the account maintained by the drawer in Bank and induce the payee/holder or holder in due course to act upon it.

(7) Criminal Appeal No.728 of 2015 (Arising out of SLP (Crl.) No.8091 of 2011) in T.Vasanthakumar Vs Vijayakumari on 28 April, 2015. Wherein the 8

Hon'ble Apex court observed that 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.

(8) 2007 (5) Supreme 277 Supreme Court of India in Alavi Haji Vs Palapetty

Muhammed & Another. Wherein the 3 Judge Bench of the Hon'ble Supreme court observed that averment made in complaint that even though complainant issued lawyers notice intimating dishonour of cheque and demanded payment same was returned saying that accused was out of station. No averment in complaint that notice was sent at correct address of drawer of cheque by registered post acknowledgment due – Returned envelope was however annexed to complaint and it, formed a part of complaint which showed that notice was sent by registered post acknowledgment due to correct address and was returned with an endorsement that addressee was abroad. Held requirements of Section 138 were sufficiently complied with in fact of the case.

(9) 2016 (1) ALT (Crl.) 25 (A.P) in Petta Satya Govinda Ramachandra Rao @

Babji v. Yarlagadda Vijaya Kumar and another. Wherein our Hon'ble High court observed that regarding service of notice including statutory notice of dishonour of cheque, if the same was returned with endorsement “door locked” or “addressee left or not available”, court may presume receipt of the notice by the addressee. Once notice is sent by registered post even no proof of service received as deemed service.

(10) 2016 0 Supreme (SC) 730 in Sampelly Satyanarayana Rao – Appellant

Versus Indian Renuwable Energy Development Agency Limited – Respondent.

Wherein the Hon'ble Apex court observed that cheques represent the outstanding liability and dishonour of such cheque would fall under section 138 of N.I.Act. Wherein the Agreement showing post dated cheques as security, but refers to the cheques being towards repayment of installments. Repayment becoming due the moment the loan is advanced and the installment falls due. So the cheques represent the outstanding liability. As such dishonour of such cheque would fall u/sec.138 of the N.I.Act, as per the observation made by the

Hon'ble Apex court in Para 11 of the Judgment.

It is also observed by the Hon'ble Apex court that once issuance of a cheque and signature thereon are admitted presumption of a legally enforceable debt in favour of the holder of the cheque arises. Accused may rebut the presumption but mere statement of the accused may not be sufficient.

(11) 2012 0 Supreme (S.C) 842 Crl. Appeals Nos.1870-1909 of 2012 in M/s

Lakshmi Dyechem v. State of Gujarat & others. Wherein the Hon'ble supreme court observed that the expression amount of money is insufficient is a genus and dishonour for reasons such as account closed, payment stopped, referred to 9 the drawer are only species of that genus. Similarly dishonour on the ground that the signatures do not match or that the image is not found which too implies and would constitute dishonour.

(12) I.C.D.S.Ltd vs Beena Shabeer & Anr on 12 August, 2002 in I.C.D.S Ltd, - Petitioner Vs Beena Shabeer – Respondent. Wherein the Hon'ble Apex court observed that the language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of section 138 of the Act.

(13) Criminal Appeal Nos.230-231 of 2019 in Bir Singh – Appellant versus

Mukesh Kumar – Respondent. Wherein the Hon'ble Apex court observed that section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under sec.139 of the

Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts.

(14) Criminal Appeal No. of 2019 (Arising out of S.L.P. (Crl.) No(s).

3858/2019) in Pavan Diliprao Dike – Appellant(s) versus Vishal Narendrabhai

Parmar – Respondent(s). Wherein the Hon'ble Apex court observed that the trial court committed an error in placing heavy burden on the complainant to prove the debt.

(15) Criminal Appeal No.1545 of 2019 (Arising out of SLP (CRL) No.3452 of 2019 in Uttam Ram – Appellant (s) versus Devinder Singh Hudan & Anr –

Respondent (s). Wherein the Hon'ble Apex court observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the

Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt, by referring the decision rendered by the Hon'ble Apex court (2019) 4 SCC 197.

(16) AIR 2004 Supreme Court 408 Paragraph 25 in Goa Plast Pvt.Ltd Vs.

Chico Ursula D'Souza, wherein the Hon'ble Apex Court held that “... an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee”...

In view of the present facts and circumstances of the case, oral and documentary evidence adduced by the complainant, observations made in point no.1, in view of the decisions cited by the learned counsel for the complainant and in view of the observations made in the said decisions by their Lordships I humbly opined that the decisions cited by the learned counsel for the accused 10 cannot be applicable to their case and I am also considered view that the accused cannot be escaped from liability under any circumstances and the complainant has proved the guilt of the accused for the offence punishable under sec.138 of N.I.Act beyond all reasonable doubt. Hence point no.2 is answered accordingly in favour of the complainant and against the accused.

Hence the accused is found guilty for the offence punishable under

Section.138 of Negotiable Instrument Act and he is convicted U/sec.255(2)

Cr.P.C. for the said offence.

Dictated to the Stenographer and transcribed by her, corrected and

pronounced by me in the open court, this the 7th day of September, 2022.

Spl. Magistrate – IV I/C Special Magistrate -V Visakhapatnam Appendix of Evidence

Witnesses examined for complainant :- PW1/ Sadaram Visweswara Rao PW2/ B.Sattibabu PW3/ Doddi Suresh

PW4/ Sadaram Venkata Ramarao PW5/ Chadaram Srinivasa Rao Witnesses examined for accused : - None Documents marked for complainant :-

1) Ex.P1 Promissory note dt.26-04-2015

2) Ex.P2 Cheque dt.04-03-2016

3) Ex.P3 Cheque return memo dt.26-05-2016

4) Ex.P4 Registered lawyer's notice dt.24-06-2016

5) Ex.P5 Returned RP cover dt.25-06-2016

Documents marked for accused : - NIL

Documents marked by third party :-

1) Ex.X1 Authorization given by their chief Manager to give evidence.

2) Ex.X2 Statement of the account of the accused for the period from 1-5-2016 to 31-5-2016.

3) Ex.X3 Authorization given by their authorized signatory to give evidence.

4) Ex.X4 it is the statement of account of the complainant for the period from 1.5.2016 to 30.5.2016.

Spl. Magistrate – IV I/C Special Magistrate -V Visakhapatnam 11

C.C.317/2017 Dt.27-09-2022 Accused present. NBW of the accused is recalled on petition. When the accused is questioned with regard to the quantum of sentence to be imposed, he has pleaded for mercy of the Court by stating that he has got his wife and children and they are depending upon him.

In view of the present facts and circumstances of the case, this is not a fit case to release the accused by applying the Provisions of Sec.360 of Cr.PC or

Probation of Offender's Act.

By considering the present facts and circumstances of the case and the submissions made by the accused I am of the considered view that if the accused is sentenced to suffer S.I for a period of six months it would be just and proper.

In the result, the accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.PC for the said offence and he is sentenced to suffer simple imprisonment for six months.

He is entitled for set off of the period under gone by him u/sec 428 Cr.PC.

The accused is informed with regard to the right to prefer an appeal and if necessary to provide legal aid to defend him in the appeal through the legal services authority. For which the accused stated that he knows his rights and he does not want any legal aid as he is having sufficient means to engage an advocate to defend his case.

Spl. Magistrate – IV FAC Special Magistrate -V Visakhapatnam 12

CALENDAR AND JUDGMENT

DISTRICT : : VISAKHAPATNAM

IN THE COURT OF THE SPECIAL MAGISTRATE-V, VISAKHAPATNAM

C.C.NO.317/2017

DATE OF OFFENCE:

1. Report of complaint:28.06.2016 2.Apprehension of accused:11.04.2022

3. Release of Bail:-----

4. Commencement of trial:07.08.2019

5. Close of trial:16.08.2022

6. Date of Judgment:07.09.2022

EXPLANATION FOR THE DELAY:

The delay is due to non-production of witnesses by the complainant.

JUDGMENT IN CALENDAR CASE NO: C.C.317/2017 on the file of IV Special Magistrate Court, Visakhapatnam. (Old C.C.No.913/2016 on the file of I Addl. Chief Metropolitan Magistrate Court, Visakhapatnam).

COMPLAINANT:

Sadaram Visweswara Rao, S/o Appa Rao, Hindu, aged 38 years, R/at D.No.38-10-3/1, Gavara Veedhi, Marripalem, Visakhapatnam- 530018.

ACCUSED: Alla Veerabhadra Rao, S/o Sambaiah, Hindu, aged 45 years, R/at D.No.38-12-3, Maharanipeta, Marripalem, Visakhapatnam- 530018.

OFFENCE: Dishonour of cheque for insufficiency of funds, Punishable under sec.138 of Negotiable Instruments Act.

FINDING:Found guilty.

SENTENCE: The accused is found guilty for the offence punishable under sec.138 of N.I.Act and he is convicted under sec.255(2) of Cr.P.C for the said offence and he is sentenced to suffer simple imprisonment for a period of six months.

He is entitled for set off of the period under gone by him under Sec.428 Cr.P.C.

Sentence is suspended till 27.10.2022 on executing bond for an amount of Rs.5,000/- with two sureties for a like sum as per the order dated 27.09.2022 in Crl.M.P.No.6640/2022 and the accused is released as he executed the bond as ordered in the above said Crl.M.P.

Special Magistrate-IV, FAC of Special Magistrate court -V Visakhapatnam.