EIT SERVICES INDIA PVT. LTD. vs. THE DEPUTY COMMISSIONER

This Criminal Revision Petition is filed by the petitioner, being aggrieved by the judgment of conviction and order of sentence dated 19.02.2015 in C.C.No.15712/2011 on the file of the Court of XVIII Additional Chief Metropolitan Magistrate, Bangalore and its confirmation judgment and order dated 27.11.2015 in Crl.A.No.413/2015 on the file of the Court of the LXVI Additional City Civil and Sessions Judge, Bangalore City seeking to set aside the concurrent findings recorded by the Courts below, wherein the petitioner / accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I Act’).

The petitioner is the accused before the Trial Court and appellant before the Appellate Court.

It is the case of the complainant/respondent that, the complainant and the petitioner/accused are known to each other. Due to the said acquaintance, in the third week of March 2010, the petitioner had asked the respondent to pay a sum of Rs.4,50,000/- to meet his urgent financial commitments and assured that he would pay interest of 2% per month for the said amount and also further assured that, he would repay the

The Trial Court after appreciating the oral and documentary evidence and also after raising the presumption envisaged under Section 139 of the N.I Act, convicted the petitioner for the offence under Section 138 of the N.I Act and sentenced the petitioner to pay fine of Rs.4,70,000/-, in default of payment of fine, ordered to undergo simple imprisonment for one year. Being aggrieved by the same, the petitioner preferred an appeal before the Appellate Court, the Appellate Court dismissed the appeal by confirming the judgment of conviction passed by the Trial Court.

Heard Sri.D.P.Prasanna, learned counsel for the petitioner and Sri.Bhaskar Babu H.J, learned counsel for the respondent.

It is the submission of the learned counsel for the petitioner that, the defence set up by the petitioner was not considered by the Courts below. Even though, he is consistent in his evidence that, he has borrowed hand loan of Rs.50,000/- from the respondent. The respondent after deducting interest of Rs.1,500/-, paid the amount of Rs.48,500/-. It is the contention of the petitioner that, at the time of borrowing the said loan, he had issued the cheque which is in dispute in this case as security for the said amount.

It is further submitted that, in spite of having cleared the loan amount, the respondent did not return the cheque and misused the said cheque and filed a criminal case against the petitioner. 8. It is further submitted that, even though the respondent failed to prove that, he had lent the said amount to the petitioner, the Courts below grossly erred in arriving at a conclusion that, the petitioner is guilty of the offence as stated supra. It is further stated that, when the lending capacity of

Per contra, the learned counsel for the respondent justified the concurrent findings of facts and also law and submits that, when the cheque and signature are admitted by the petitioner, it is presumed that, it was issued for the discharge of any debt or other liability. However, it is a rebuttable presumption.

It is further submitted that, mere denial of the transaction may not be enured to the benefit of the petitioner,

Having heard the learned counsel for the respective parties and also perused the concurrent findings of the Courts below, the points which arise for my consideration are: i) Whether the concurrent findings recorded by the Courts below in convicting the petitioner for the offence under Section 138 of N.I Act are sustainable? ii) Whether the petitioner has made out grounds to interfere with the concurrent findings ?

Considering the scope of the Revisional Jurisdiction, it is necessary to have a cursory look upon the documents and the evidence to arrive at a conclusion as to whether any error or perversity, if any, committed by the Courts below in recording the conviction of the petitioner.

In order to avoid the repetition of the facts, it is relevant to refer the evidence of PW.1. According to him, the petitioner had requested to pay a sum of Rs.4,50,000/- in the year 2010 and in lieu of the same, he had issued a cheque for the said amount. The cheque and signature were admitted by the petitioner, however, he denied the transaction. It is needless to say that, once the execution of the cheque, signature is admitted, it is presumed that, it was issued for legally enforceable debt or liability unless the contrary is proved. The Trial Court and the Appellate Court rightly raised the presumption.

It is the defence of the petitioner that, he had borrowed a sum of Rs.50,000/- in the year 2003, the respondent after deducting Rs.1,500/- had paid Rs.48,500/-, in the said transaction, it is stated that, this cheque was issued as a security. The evidence of DW.1 indicates that, on 06.11.2003, there was a transaction and the respondent had paid the

When the petitioner deposed that, he had not borrowed a sum of Rs.4,50,000/- by the respondent and conceded that he borrowed a sum of Rs.50,000/- in the year 2003 and he had issued a cheque as security, the same had been misused by the respondent, the respondent had to prove that, the amount stated in the cheque was paid to the petitioner by producing cogent evidence. On perusal of the entire evidence, the respondent neither produced any bank statement for having paid Rs.4,50,000/- to the petitioner nor produced any income tax returns to substantiate that, the amount was paid to the petitioner. When the complainant failed to discharge the initial burden that amount was paid to the petitioner, the Courts below ought not to have raised the presumption that, the cheque was issued for discharge of the legally enforceable debt or liability.

It is also relevant to refer that, the petitioner had raised the defence that, the respondent had no financial capacity to lend the amount. When such a contention was taken by the petitioner, the respondent should have proved that, he had paid the amount as stated in the cheque.

Now, it is relevant to refer the judgment of the Hon’ble Supreme Court in the case of BASALINGAPPA v. MUDIBASAPPA1 paragraph No.26, which reads thus: “26. Applying the preposition of law as noted above, in facts of the present case, it is clear that signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of PW 1, when the specific question was put that cheque was issued in relation to loan of Rs 25,000 taken by the accused, PW 1 said that he does not remember. PW 1 in his evidence admitted that he retired in 1997 on which date he received monetary benefit of Rs 8 lakhs, which was encashed by the complainant. It was also brought in the evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of Rs 4,50,000 to Balana Gouda towards sale consideration. Payment of Rs

On reading of the dictum of the Hon’ble Supreme Court, it is clear that, during the cross-examination of the respondent, when financial capacity to pay the amount was questioned, there was no satisfactory reply given by the respondent. The Courts below failed to appreciate that, the petitioner has not proved his financial capacity to lend the amount stated in the cheque. Be that as it may, the Courts below failed to appreciate the evidence of PW.1 and DW.1 properly and convicted the petitioner which is erroneous and illegal.

In the light of the observations made above, the points which arose for my consideration are answered as under:-

Hence, I proceed to pass the following:- ORDER (i) The Criminal Revision Petition is allowed. (ii) The judgment of conviction and order of sentence dated 19.02.2015 passed in C.C.No.15712/2011 on the file of the Court of XVIII Additional Chief Metropolitan Magistrate, Bangalore and judgment and order dated 27.11.2015 passed in Crl.A.No.413/2015 on the file of the Court of the LXVI Additional City Civil and Sessions Judge, Bangalore City (CCH-67), are set aside. (iii) The petitioner is acquitted for the offence under Section 138 of the N.I Act.