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TMI Blog2020 (11) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin 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. The complainant issued legal notice against the accused which was duly served on him. The accused did not comply the demand and hence complaint was filed against the accused. 5. Accused was secured before the Trial Court and he has pleaded not guilty. Hence, the complainant examined himself as P.W.1 and got marked documents Ex.P.1 to Ex.P.14 and on the other hand accused examined himself as D.W.1 and got examined two witnesses as DWs. 2 and 3 and got marked documents Exs.D.1 and D.2. 6. The Trial Court after perusing both oral and documentary evidence has acquitted the accused. Hence, the present appeal is before this Court. 7. The complainant in the present appeal who contended that the Trial Court has committed error in not appreciating both oral and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount 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-examination the said defense was taken and not given any reply. The counsel also submitted that the trial Court has committed an error in not invoking presumption under Section 139 of N.I. Act and without invoking presumption proceeded to discuss the case of the complainant and not considered the evidence of the accused and also his witnesses evidence. Hence, it is clear that the Trial Court has not considered both oral and documentary evidence of both complainant and the accused while coming to the conclusion that the complainant has not proved the case. 11. The counsel appearing for the appellant in support of his contention relied upon the judgment of the Apex Court reported in 2010 (4) Supreme 169, Rangappa vs. Sri Mohan and referring this judgment the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 that the cheques in question were drawn for consideration and the holder of the cheques i.e. the appellant- complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused to establish a probable defense so as to rebut such a presumption and the same has not been done in the present case for adducing the defense evidence. 15. The counsel also relied upon this Court's judgment reported in 2019 ACD 1037 or 2019 STPL 13612 Karnataka in the case of Lokesh N. Reddy vs. K.V. Nagaraja and brought to the notice of this Court paragraph 10 of the judgment and in this judgment the Court mandates that the Court has to draw a presumption that there exists a legally recoverable debt or liability, then under such circumstances, other discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 prove his source of income, burden is on the complainant to prove beyond reasonable doubt. The burden of proof lying on accused required to be discharged by preponderance of probability. The Accused need not step into witness box to discharge his burden. The Trial Court on detailed analysis of evidence found that accused discharged the burden of proof which lay upon him but High Court reversed the judgment of Trial Court holding that accused had not adduced any evidence to establish the specific case set up by him. The counsel would submits that the Apex Court in coming to the conclusion that judgment of Trial Court being neither perverse nor legally infirm set aside the order of the High Court. The Counsel also brought to the notice of this Court that when two views are possible, appellate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 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 ought to have been invoked and Section 139 of the N.I. Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence. 21. Counsel referring these judgments would submit that even though the defense evidence has been adduced, evidence of P.W.2 and 3 helps evidence of the complainant. Though the accused has been examined and in his defense though says the cheque was given for security it has not been substantiated by leading cogent evidence and hence the impugned judgment is liable to be set aside. 22. Havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 examined two witnesses. It is rightly pointed out by the learned counsel for the appellant/complainant that the trial Judge has failed to consider both oral and documentary evidence available on record inclusive of complainant as well as the accused and no where given any finding with regard to the presumptions to be invoked under Section 139 of the NI Act, except discussing the case of Krishna Janardhana Bhat's case and also Rangappa's case. 25. Learned Counsel for the appellant/complainant also relied upon the Judgment of the Apex Court in Rangappa v. Mohan (AIR 2010 SC 1898) and brought to my notice at paragraph Nos.14 and 15 with regard to invoke the presumption under Section 139 of NI Act. On perusal of the Judgment of the Apex Court in the case of Rangappa v. Mohan, the Apex Court regarding presumption i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 raised is acceptable. No doubt, there is no dispute with regard to the fact that the primary burden is on the complainant to prove with regard to the transaction and presumption has to be drawn if the cheque is admitted and no reply was given. Whether the probable defense was raised by the accused has to be considered. In the case on hand, 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. Hence, I am of the view that the Trial Court has committed an error in not invoking the presumption in favour of the complainant. Hence, I answer point No.2 as 'affirmative'. 28. Point No.(i): ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is his mother. Ex.P8 was confronted to him and a suggestion was made that an amount of Rs. 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 Rs. 6 lakhs to advance the money but he volunteers that he was having the said amount and no entry in the Income Tax Returns. He also admits that, the loan taken and reference made in Ex.P14 is not yet cleared. 29. DW.1 also filed an affidavit reiterating his defense that he gave the cheque as security in order to avail the loan by the complainant to start his business. DW.1 was subjected to cross-examination. In the cross-examination, he admits that the complainant and his family members spent more than an amount of Rs. 3 Lakhs when their father passed away. He also admits that Sri K.Nagesh Bhat and brother of the complainant constructed 'Krishnaprasad Apartment' and the complainant himself is taking care of the construction. He also admits that the Maruti Omni Car bearing registration No.KA-04 M-8402 belongs to the complainant. He also admits that he was running a Municipal Canteen at Shidlaghatta and he has suffered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 was registered against him and the same was denied. However, he admits Crime No.146/2000 but he claims that his mother gave the complaint against him by mistake. He also admits that he does not know the avocation of the accused and also to whom he gave the cheque. He admits that at the instance of the accused without the summons from the Court, he came to give evidence before the Court. He also does not know how much amount the complainant has spent for starting a Hotel at Bengaluru, but he commenced the Hotel in the year 2003. He also admits that he did not give any suggestions to his maternal uncle to proceed against the complainant in accordance with law. 32. DW.3, in his evidence, he says the complainant is the nephew of the accused. During the year 2001-02, the complainant visited the accused house and at that time, he himself and one Varadaraj Rao were pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 this evidence is discussed by the Trial Court, the same goes against the accused. DW.3 also admits that the accused has suffered loss in the hotel which he was running in different places and after that he came and settled in the village. DW.2 categorically in his evidence admits that in the year 1990 itself, the accused came and settled at his village after he has suffered loss. 34. DW.2 also categorically admits that the accused only called him to come and give evidence and he categorically admits the said cheque was not given in his presence and no summons was received from the Court. A case was registered against him based on the complaint of his mother. He did not advice his maternal uncle to initiate complaint against his brother. Having taken note of particularly, the evidence of DWs.2 and 3 regarding financial capacity of the complainant, he was having the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 Rs. 8,000/- in respect of the loan transaction of the complainant. 35. The learned counsel appearing for the accused brought to the notice of this Court to see the date of letter. No doubt, the said letter was written on 21.02.2004 i.e., immediately, after the transaction i.e., in the year 2003. The Trial Court also mainly relied upon the document Ex.P14. It has to be noted that the complainant himself has relied upon the said document and it is also his case that he has advanced the amount in the year 2003. The fact that the Hotel was started in the year 2001 itself is not in dispute and DW.1 himself admits the same. DW.2 claims that the Hotel was started in the year 2003 and the same is contrary to the evidence of the accused. Only basing on Ex.P14, the Trial Court has come to the conclusion that he was not having the financial source to lend the money in favour of the accused. 36. Having c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted 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 would attract presumption under Section 139 of the NI Act. The Apex Court also in the case of Rohitbhai Jivanlal Patel v. State of Gujarat and Anr. reported in 2019 SCCONLINE SC 662, held that, non-examination of two witnesses from whom the amount was borrowed to advance the amount need not be necessarily examined these witnesses. The Trial Judge has mainly concentrated the case of the accused on the ground that from whom he has borrowed an amount of Rs. 3 lakhs, were not examined. The Apex Court in the Judgment has observed in paragraph No.17 that, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him and the very said approach of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lainant 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 admitted that they were not having any knowledge of issuance of cheque by the accused and in their presence no transaction was taken place and though DW.3 claims that in his presence the said cheque was given and the evidence of DWs.2 and 3 is very clear that on the instance of the accused only they came and gave the evidence before the Court and the accused only taken care of the Hotel and Food expenses and they had given evidence at the instance of the accused. When such being the case, the accused though led the defense evidence to rebut the case of the complainant and in the absence of cogent rebuttal evidence this Court has to accept the evidence of the complainant and the presumption is also in favour of complainant and in the cross- examination of P.W.1, nothing is elicited to come to the conclusion that the cheque was not given for legally recoverable debt and the Trial Court mainly conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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