TMI Blog2020 (11) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Trial Court has not at all invoked the presumption in favour of the complainant and also not discussed the evidence of the defense, particularly, the evidence of the accused, who has been examined as D.W.1 and also two witnesses, who have been examined as D.Ws.2 and 3 on behalf of the accused. Whether the Trial Court has committed an error in acquitting the accused in coming to the conclusion that the complainant has not proved legally recoverable debt? - HELD THAT:- The defense of the accused that the said blank cheque was given to avail the financial assistance from the financiers and it is not the case of the accused from whom the complainant has borrowed the money to start the business. It is also an admitted fact that the Hotel Business was commenced in the year 2001 itself and this cheque pertains to the year 2005. When the accused admits his signature available on cheque - Ex.P1 and also on Ex.P6 notice served on him, the accused did not setup any defense immediately and during the course of cross-examination after thought set up a defense that the said cheque was given as security. The Trial Judge failed to consider the evidence in toto both the evidence of comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenging judgment of acquittal passed in C.C.No.3336/2006 dated 29.12.2010, on the file of XVIII Additional Chief Metropolitan Magistrate and XX ASCJ, Bangalore City for the offence punishable under Section 138 of Negotiable Instruments Act (hereafter for short ' N.I. Act'). 2. For the sake of convenience, the parties are referred to as they are referred to in the original suit before the Trial Court. 3. Brief facts of the case: Complainant filed complaint under Section 200 of Cr.P.C. against the accused under Section 138 of the N.I. Act and made an allegation that accused being a close relative of the complainant, on 7.12.2003, borrowed hand loan of ₹ 6,00,000/- from the complainant, promising to repay the said loan amount within one month and in respect of the above said transaction, complainant demanded the accused for repayment of loan amount, for which, accused had issued a cheque bearing No.085571 dated 31.08.2005, drawn on Syndicate Bank, Nandikoor branch. When the said cheque was presented by the complainant for clearance on 31.08.2005 with his banker, the same was returned unpaid with an endorsement 'funds insufficient on 05.09.2005. 4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been substantiated in his evidence and no cogent evidence has been led by the accused in respect of the same, inspite of the Trial Court has committed an error. 10. The learned counsel appearing for the appellant/complainant in his argument has vehemently contended that the witness who has been examined on behalf of the accused as D.W.3 has categorically admitted with regard to the capacity of the complainant to advance the loan amount. The accused in the cross-examination, admitted that he has not given any reply and admits that there is no difficulty for him to give any reply. Accused/DW1 has also admitted that the complainant was having a car and also his brothers are settled in abroad and also admitted in the cross examination that he was having bank account in different banks, in spite of the same the Trial Court has committed an error in coming to the conclusion that Complainant was not having the capacity to advance the loan amount. Defense was taken in the cross-examination that the cheque was given for security purpose to avail loan by the complainant from other financiers and the same has not been proved. The notice was served on him and only during the cross-exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. The Apex Court held that said approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant. 14. The learned counsel relied upon the judgment dated 14.09.2020 in the case of Uttam Ram Vs. Devinder Singh Hudan and Another and referring to paragraphs 18 to 33 of this judgment the counsel appearing for the appellant would submit that Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. The Court drawn as presumption th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 2003 December. 18. The other contention of the counsel is that though he deposed that he has received the amount of ₹ 3,00,000/- from two different persons in order to advance the said amount to the accused he has not examined those two persons before the Court and hence the case of the complainant cannot be accepted for the above two reasons. In respect of his contentions, the learned counsel has relied upon the judgment reported in (2019) 2 SCC (Cri) 571 in the case of Basalingappa vs. Mudibasappa and referring to this judgment the counsel would contend that dispute is with regard to financial capacity of the complainant to pay the amount and leading evidence to prove the same, the accused had led probable defense in this case and hence burden would be on the complainant to establish his financial capacity. Further the counsel referring to the judgment would submit that principles relied upon in the judgment is aptly applicable to the case on hand. The Counsel also relied upon the judgment of the Apex Court reported in (2008) 1 SCC (Cri) 200 in the case of K. Prakashan vs. P.K. Surenderan, the counsel referring to this judgment would contend that in order to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegorically held that issuance of cheque and signature thereon not disputed by accused and transaction between the parties also not disputed. There is a Presumption of a legally enforceable debt or liability under Section 139 of NI ACT. The accused after dishonor of earlier cheques, again issued consolidated cheque and thereafter the cheque was dishonoured for 'Stop Payment'. It is held Courts wrongly acquitted the accused/respondent. In the case on hand also notice was given and no reply was given and the trial Court has not invoked Section 139 of N.I. Act and there is no evidence against the rebuttal complainant evidence. The learned counsel brought to the notice of paragraph No.7 of the judgment and would contend that to rebut the presumption the accused was required to lead the evidence. The counsel would submit that the Apex Court held that the story put forward by the accused that the cheques were given by way of security is not believable in the absence of rebuttal evidence to rebut the presumption and more particularly the cheque in question was issued for second time, after the earlier cheques were dishonoured. Therefore, presumption under Section 139 of N.I. Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding prosecution must prove the guilt of the accused beyond all reasonable doubt, the standard of proof, so as to prove a defense on the part of an accused is 'preponderance of probabilities'. The Trial Court after extracting the Judgment of Rangappa's case and Krishna Janardhana Bhat's case has come to the conclusion that the burden of proof on the accused is preponderance of probabilities and the probabilities can be drawn not only from the material brought on record by the parties but also by reference to the circumstances upon which they relied upon. 24. Thereafter, the Trial Court has discussed the evidence of P.W.1 and in detail dealt with, with regard to the source of income of the complainant to advance the amount of ₹ 6 lakhs. It is rightly pointed out by the learned counsel appearing for the appellant that the trial Judge no where discussed the evidence of DWs.1 to 3, who have been examined on behalf of the accused. The trial Judge while appreciating the material before the Court, consider the evidence of both the complainant as well as the accused, there is no single word discussing the evidence of the accused, who has led the evidence and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the defense and to rebut the presumption; he has to lead the 'preponderance of probabilities'. The Trial Judge has failed to consider particularly, the evidence of DWs.1 to 3 and even not discussed anything in the Judgment. 27. In the case on hand, it has to be noted that there is no dispute with regard to the issuance of the cheque and the same is also not denied by the accused and also has not given any reply notice when the notice was served on him and the defense was set up during the cross-examination that the said cheque was for security purpose to avail the loan by the complainant from the other financier and the same is not proved. It is also important to note that in the cross- examination, DW.1 has categorically admitted that he has not given any reply and further admits that there is no difficulty for him to give any reply. When such being the circumstances, as held in the Judgment of Rangappa's case, the Trial Court ought to have invoked the presumption under Section 139 of the NI Act. No doubt, the said presumption is rebuttable presumption and the Court has to take note of the fact that whether he has raised the plausible defense and the defense raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also his evidence that the cheque - Ex.P1 contains the handwriting of the accused. It is suggested that the accused gave the cheque in order to commence the Hotel to the Complainant in the year 2002 and the said suggestion was denied. He also admits that his wife took the loan on 28.1.2005 in Udupi Mahalakshmi Bank by pledging the gold ornaments and the said loan is not yet cleared. It is suggested that he was involved in kidnapping the daughter of the complainant and the same was denied. However, he admits that in the said kidnapping case his Maruti Omni Car belongs to him was involved. He also admits that in order to advance the amount, he has borrowed an amount of ₹ 1 Lakh from Madhusudan Pejaathhaya @ Kesari and also an amount of ₹ 2 Lakhs from his relative U.B.Venkatesh. He also admits that in kidnapping case, the complainant is his mother. Ex.P8 was confronted to him and a suggestion was made that an amount of ₹ 6,000/- was sent by his brother to take care of his parents and the same was denied. He also admits that he has not produced any document to show that he was having ₹ 6 lakhs to advance the money but he volunteers that he was having the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also cannot tell at what date, he had met the complainant. 31. Regarding the receipt of notice, he says after receipt of notice, he met his Advocate Balakrishna, but he did not show the said notice to him, but he told about issuance of legal notice and discussed with regard to the same. He categorically admits the cheque - Ex.P1 and also the signature. However, he admits the address mentioned in Ex.P6 and also admits the signature on Ex.P6 and there was no difficulty to reply to the notice. He also admits that there was no impediment to give complaint against the complainant when the said cheque was misused. The other witness is DW.2, who is the younger brother of the complainant and this witness reiterates the defense of the accused in his affidavit regarding handing over the cheque and he also says the complainant is not having any capacity to lend the money and the cheque was given for security. He was subjected to cross- examination. In the cross-examination, he admits that the accused called him to come to the Court stating that there is a blank cheque and to give evidence. He admits that the said cheque was not given in his presence. It is suggested that a criminal case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gave the money in the year 2003 in favour of the accused. It is the contention of the accused that the complainant has approached him that he is in need of a blank cheque to get the amount from the financiers. It has to be noted that, it is emerged in the evidence of the witnesses, the Hotel was started in the year 2001 and the witness, who is also the relative of the complainant and accused, who has been examined as DW.2 claims that the complainant has started the Hotel business in the year 2003. The evidence of DW.2 is contrary to the evidence of the accused. It has to be noted that the main defense of the accused is that the complainant had approached to issue a blank cheque and DW.3 claims that he was present at the time of issuing the cheque in favour of the complainant. In the evidence of DW.3, it has categorically elicited that he came and gave evidence on behalf of the accused at his request and the accused only taken care of him when he came to Bengaluru along with him. The evidence of DW.2 is clear that the complainant was having a big hotel at Bengaluru and his financial capacity was good and this evidence has not been discussed by the Trial Court. It appears that, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e admits the receipt of legal notice. There was no difficulty for him to give reply to the notice. He also categorically admits that there was no impediment for him to give any complaint against the complainant when the said cheque was mis-used. First of all, the accused did not dispute the issuance of the cheque and the same bears his signature and also did not dispute the fact that he has received the notice and he has not given any reply and there was no difficulty to give reply and also there was no impediment to give complaint against the complainant when the cheque was mis-used. No doubt, PW.1 in the cross-examination, he admits that he has borrowed an amount of ₹ 2 lakhs from other two persons and other two persons were not examined before the Trial Court and also admits that on 28.01.2005, by pledging the gold ornaments of his wife, the loan was taken. It has to be noted that the transaction between the accused and the complainant was of the year 2003. The accused mainly relies upon the document-Ex.P14. No doubt, on perusal of Ex.P14, it clearly discloses that father-in-law of the complainant wrote a letter stating that he has paid the interest of ₹ 8,000/- in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the Hotel Business was commenced in the year 2001 itself and this cheque pertains to the year 2005. When the accused admits his signature available on cheque - Ex.P1 and also on Ex.P6 notice served on him, the accused did not setup any defense immediately and during the course of cross-examination after thought set up a defense that the said cheque was given as security. The Trial Judge failed to consider the evidence in toto both the evidence of complainant and DWs.1 to 3 and not considered the documentary evidence available on record and mainly considered the evidence of P.W.1 and particularly, Ex.P14 - the letter and the said letter is not disputed by the complainant himself, he only got marked the document and the trial Court only concentrated on the source of the complainant. 37. Learned Counsel appearing for the appellant relied upon the Judgment of the Apex Court reported in (2019) 4 SCC 197 in the case of Bir Singh v. Mukesh Kumar. In this judgment, the Apex Court held that, when the accused did not dispute the issuance of cheque and admitted the issuance of cheque and even a blank cheque voluntarily signing and handed over by the accused towards some person, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and in the case on hand, the accused also did not dispute the cheque as well as his signature and also he has not given any reply and no complaint was given when the notice was given. If really the said cheque was mis-used he would have given the complaint and categorically admits that he is not having any impediment to give complaint and also no difficulty to give any reply. When such being the case, the presumption is available in favour of the complainant and no doubt the said presumption is rebuttable presumption and the question before this Court is whether the accused rebutted the presumption and I have already discussed in detail, the evidence of DWs.1 to 3, it is clear that the accused himself has suffered the loss in Hotel business and his house was also brought for sale when the Sales Tax of the Hotel was not paid. DW.3 categorically admitted the financial condition of the complainant was sound and he was running a big hotel in Bengaluru and in order to substantiate the defense of the accused also, no material is placed before the Court that he gave the cheque in favour of the complainant as security to get the financial assistance. DWs.2 and 3 have categorically adm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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