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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 05TH DAY OF OCTOBER, 2023 BEFORE THE HON’BLE MR. JUSTICE RAJENDRA BADAMIKAR CRIMINAL REVISION PETITION NO.496 OF 2016
BETWEEN:
R. HEERANNA S/O. RAMACHANDRA RAO, AGED ABOUT 53 YEARS, RESIDING AT NO.132, VARALAKSHMI KRUPA, 9TH CROSS, DOCTORS CORNER, GOKULAM III STAGE, MYSURU-570 002. ….PETITIONER
(BY SRI. YASHUDHAR HEGDE, ADVOCATE FOR SRI. AJAY .J. NANDALIKE, ADVOCATE)
AND:
P. PADMANABHA, S/O P. RAMALINGAIAH, AGED ABOUT 65 YEARS, RESIDING AT NO.826, 4TH WEST CROSS, ASHOKA ROAD, MYSURU-570 001. ...RESPONDENT (BY SRI. RAHUL DESAI, ADVOCATE)
THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W 401 OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 06.02.2016 PASSED IN CRL.A.NO.12/2014 BY THE I ADDL. S.J., MYSURU AND CONSEQUENTLY PASS AN ORDER OF ACQUITTAL IN FAVOUR
2 OF THE ACCUSED THEREBY DISMISSING THE CRIMINAL COMPLAINANT BEARING C.C.NO.3047/2008 FILED BEFORE V ADDL. I CIVIL JUDGE AND JMFC, MYSURU AND ORDER FOR THE SUSPENSION OF THE EXECUTION OF THE SENTENCE AND JUDGMENT OF CONVICTION PASSED IN CRIMINAL COMPLAINT NO.3047/2008 DATED 23.12.2013 BY THE V ADDL. I CIVIL JUDGE AND JMFC, MYSURU WHICH HAS BEEN CONFIRMED BY THE I ADDL. S.J., MYSURU VIDE ITS JUDGMENT DATED 06.02.2016 PASSED IN CRL.A.NO.12/2014 AND ALLOW THIS CRL.RP.
THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 14.09.2023, COMING ON FOR ‘PRONOUNCEMENT OF ORDER’ THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
This revision petition is filed under Section 397 read with Section 401 of Code of Criminal Procedure by the revision petitioner / accused challenging the judgment of conviction and order of sentence passed by V Additional Civil Judge and JMFC, Mysore in C.C.No.3047/2008 and confirmed in Crl.A.No.12/2014 on the file of I Additional Sessions Judge, Mysore vide judgment dated 06.02.2016.
3 2. For the sake of convenience, the parties herein are referred with original ranks occupied by them before the trial Court.
The brief factual matrix leading to the case are that the accused and complainant are well acquainted with each other and with the said acquaintance accused availed a loan from complainant for his financial requirement of business of Rs.5 Lakhs on 17.12.2004, Rs.3 Lakhs on 07.02.2005, Rs.2 Lakhs on 17.03.2005, Rs.1,30,000/- on 07.04.2005, Rs.3 Lakhs on 02.06.2005, Rs.1,90,000/- on 26.11.2005 and Rs.3,80,000/- on 22.12.2005. The accused has issued the cheques while borrowing the loan amounts and he has paid interest at the rate of 18% per annum upto January 2006. It is also asserted that thereafter on 25.01.2006, accused borrowed a further loan of Rs.8 Lakhs and at that time, he has taken back all the cheques issued earlier and then issued the cheque
4 dated 24.03.2006 for Rs.28 Lakhs. It is further asserted that when complainant presented the said cheque for encashment, it was dishonored for insufficient of funds. It is also asserted that accused had issued a legal notice and inspite of service of notice; accused has not paid the cheque amount. Hence, he filed a complaint.
On the basis of the complaint, the learned Magistrate has taken cognizance of the offence under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'the N.I.Act' for short) and issued process against the accused. The accused has appeared through his counsel and was enlarged on bail. The plea under Section 138 of the Act was recorded and the accused denied the same.
The complainant was examined himself as PW1 and placed reliance on 14 documents marked at Ex.P1 to Ex.P14. Then the statement of the accused
5 under Section 313 of the Cr.P.C was recorded and the accused denied the incriminating evidence against him. He has also got examined himself as DW1 and got examined one witness on his behalf as DW2. He placed reliance on 7 documents marked at Ex.D1 to Ex.D7.
After hearing the arguments and after appreciating the oral and documentary evidence, the learned Magistrate has convicted the accused for the offence under Section 138 of the N.I.Act and imposed a fine of Rs.33,10,000/- with a default clause.
Being aggrieved by this judgment of conviction and order of sentence, the accused has approached the learned I Additional Sessions Judge, Mysore, in Crl.A.No.12/2014. The learned Sessions Judge after re-appreciating the oral and documentary evidence dismissed the appeal by confirming the judgment of conviction and order of sentence passed by the learned Magistrate. Against these concurrent
6 findings, the accused is before this court by way of this revision.
Heard the arguments advanced by the learned counsel for the revision petitioner / accused and the learned counsel for respondent / complainant. Perused the records.
The learned counsel for the revision petitioner / accused would contend that the cheque is for Rs.28 Lakhs and accused is only an Ayurvedic Doctor and he had no means to advance such a huge amount. He would also contend that the account statement produced only discloses that the amount was transferred from one OD account to other OD account, but it does not refer to Rs.28 Lakhs of huge loan. He would assert that the accused has admitted a transaction of Rs.2,50,000/- and issuance of cheque for Rs.1,25,000/- each and one cheque was obtained as security, but the same has been misused after
7 payment of Rs.2,50,000/- as the cheque was not returned under the guise of misplacement. The learned counsel would also invite the attention of the court to the income tax returns submitted by the complainant, which shows that his income for the period of 2004-06 is Rs.80,000/- and odd and it is hard to accept that he is capable of advancing huge amount of Rs.28,00,000/-. He further invites the attention of this court to evidence of DW2 who is an income tax officer where in it is established that along with income tax returns the statement now produced was not enclosed. He would also contend that though the complainant admitted that he is in possession of the documents to prove his financial status, he has not produced the same and the income tax returns discloses that he did not have any income to advance huge loan of Rs.28 Lakhs. He would also assert that mere ground of attempt to settlement cannot be a ground for conviction, which was done by the courts below, which
8 is erroneous. Hence, he would submit that both the courts below have committed an error in convicting the accused and sought for allowing the revision.
Per contra, the learned counsel for the respondent would submit his argument supporting the judgment of conviction and order of sentence asserting that the income tax records discloses the financial status of the complainant and further, the cheque and signature have been admitted. Hence, he would dispute the claim of revision petitioner.
Having heard the arguments and after appreciating the oral and documentary evidence, now the following point would arise for my consideration: “Whether the judgment of conviction and order of sentence passed by the trial court and confirmed by the appellate court suffers from perversity, illegality
9 and arbitrariness so as to call for any interference by this court?
The complainant asserted that accused has availed loan of Rs.5 Lakhs on 17.12.2004, Rs.3 Lakhs on 07.02.2005, Rs.2 Lakhs on 17.03.2005, Rs.1,30,000/- on 04.05.2005, Rs.3 Lakhs on 02.06.2005, Rs.1,90,000/- on 26.11.2005 and Rs.3,80,000/- on 22.12.2005 by issuing independent cheques. It is further asserted that the accused has paid interest at the rate of 18% upto January 2006 and on 25.01.2006, he availed Rs.8 Lakhs loan and issued the disputed cheque under Ex.P1 by receiving back all other cheques. According to the complainant, he presented the said cheque and it was bounced and hence, he claims to have lodged a complaint. The accused has disputed this transaction. A legal notice came to be issued as per Ex.P3, but the same was admittedly replied as per Ex.P6. In Ex.P6, the accused
10 has disputed the very financial status of the complainant to advance huge loan of Rs.28 Lakhs as asserted on various dates.
The complainant was examined as PW1 and in his examination in chief he has reiterated the complaint allegations. In the cross-examination, he asserts that he is an Ayurvedic Doctor practicing since 40 years and earlier he was having a clinic and at present, he did not have any clinic. He asserts that now he is sitting in front of RTO office and issuing medical certificates to the persons who are seeking licence regarding their fitness. He further asserts that everyday he used to issue certificates upto 10 to 15 persons or sometimes 2 to 3 persons and he asserts that since last 10 to 15 years, he is doing this practice alone. He claims that his income from the practice is Rs.3,000/- to Rs.4,000/- per month and he is possessing a complex in Ashok Road and he is getting
11 Rs.20,000/- to Rs.25,000/- as rent. If this version is accepted, then the monthly income of the complainant is hardly Rs.25,000/-. He is required to maintain his family in this income.
He further admits that he possess account only in Kanikaparmeshwari Cooperative bank and further admits that since, 15 years he is an income tax assessee, but he pleads ignorance as to in which ward he submits the income tax returns.
Subsequently, the complainant has produced the income tax returns submitted by him as per Ex.P10 to Ex.P12. Ex.P10 is the income tax return for the year 2003-04 and the income of the complainant is shown to be Rs.51,940/-. This is for the assessment year 2004-05 and income was from 01.04.2003 to 31.03.2004. It will not assist the complainant in proving his income as the transaction
12 is said to have taken place from 17.12.2004 to 25.01.2006.
Ex.P11 is a material document, which discloses that it is for the year 01.04.2004 to 31.03.2005. Three transactions viz., Rs.5 Lakhs dated 17.12.2004, Rs.3 Lakhs dated 07.02.2005 and Rs.2 Lakhs dated 17.03.2005 fall within this financial period, which is about Rs.10 Lakhs. The total annual income in Ex.P11 is shown to be Rs.51,940/- from the property, by way of rent and professional income is shown to be Rs.35,210/- and total income is Rs.87,150/- as per Ex.P11. When his total income for the said financial year is Rs.87150/-, it is hard to accept the contention of the revision petitioner that he has advanced loan of Rs.10 Lakhs in this period. This is quite unnatural and unacceptable.
However, along with this income tax returns, he produced capital account balance sheet, wherein
13 sundry creditors were shown to be Rs.11 Lakhs and net profit is shown to be Rs.1,09,000/- but this is only his statement. However, this statement does not tally with income tax returns submitted by the complainant to the income tax department, wherein he has shown his total income including professional income to the tune of Rs.87,150/-, but now on the basis of this capital account balance sheet, he wants that court should rely on this document to prove his income capacity. But when this document does not correlate with the income tax returns, it cannot be accepted. Apart from that, DW2 is examined on behalf of accused who is an Income Tax Officer, wherein he has specifically stated that while submitting the income tax returns, the balance sheet and profit and loss statement was not submitted by the complainant. Hence, this document cannot be looked into. Apart from that, PW1 himself has admitted in his cross-
14 examination that Rs.28 Lakhs advanced to the accused was not shown in his income tax return.
The same position is with Ex.P12, which is the accounts statement from 01.04.2005 to 31.03.2006. The total income is shown to be Rs.98,150/- in this period and out of the said amount, the professional income is shown to be Rs.46,210/- and house income is shown to be Rs.51,940/-. Along with it, again a balance sheet was produced, but the said balance sheet is not part of income tax returns as stated by DW2.
The remaining amount of Rs.1,30,000/-, Rs.3 Lakhs, Rs.1,90,000/- Rs.3,80,000/- and Rs.8 Lakhs fall within this period, but that is not forthcoming in this account statement. Though there is a reference of capital account and balance sheet regarding sundry creditors to the tune of Rs.26 Lakhs, the same was not disclosed in his income tax returns as admitted by him. Hence, the documents
15 of capital account and balance sheet now attached along with Ex.P10 to Ex.P12 cannot be looked into.
As per Ex.P1, accused has advanced a total sum of Rs.28 Lakhs and it spreads in two financial years of 2004-05 and 2005-06, but the income tax returns are silent regarding this aspect.
Apart from that, when the complainant had consistently advanced huge loan from 17.12.2004 onwards and when the earlier loan was itself not repaid, it is hard to accept his assertion that he went on advancing the loan as per the request. When complainant himself admits that Rs.28 Lakhs advanced to the accused was not shown in income tax returns, it is hard to accept his contention that he was financially sound.
When a suggestion was made that the complainant was not financially capable of paying such
16 a huge amount, he claims that he has paid it in a phase manner and the total amount is Rs.28 Lakhs. It is hard to accept his contention that he could advance such a huge amount when his declared income is very meager and less than Rs.1 Lakh per annum. Apart from that, the complainant all along asserts that he had got documents to show that he was possessing such a huge amount, but he has not produced any documents in this regard. Later on he produced Ex.13 and 14, but the same are OOD accounts and there amount is transferred from one OOD to another OOD and they were withdrawn by complainant himself. Hence, the evidence of complainant regarding his financial status is not established.
The accused has taken a defence that in 2005, one Vallabhshastry was introduced by accused to the complainant and at that time, he took Rs.2,50,000/- from complainant, Rs.37,500/- was
17 deducted towards interest and Rs.10,000/- was charged as hundi amount and he was only paid Rs.2,02,500/- and in this regard, two cheques of Rs.1,25,000/- was given by him and another cheque was taken as a security, which is misused. No doubt, accused has not proved his defence to prove regarding availment of Rs.2,02,500/-, but when he has disputed the financial status of the complainant, it is for the complainant to prove his financial status first, but evidence does not substantiate the said aspect.
The complainant has asserted that in respect of two cheques of Rs.1,25,000/-, the complainant has got filed a complaint through on Raju and said cases were dismissed. The dismissal of these cases was undisputed and the same is evident from Ex.D1 also.
Interestingly, all along, the complainant asserted that his practice was for charity and he is
18 getting house rent of Rs.20,000/- to Rs.25,000/- per month, but during the cross-examination of DW1 a suggestion was made to the accused on behalf of the complainant that the complainant is getting rent to the tune of Rs.55,000/- to Rs.60,000/-. This suggestion is contrary to the evidence given by complainant himself who claims that his house income is only Rs.20,000/- to Rs.25,000/-. Further, complainant asserts that till January 2006, he received the interest at the rate of 18%. He did not disclose how much interest was paid to him and in what way the interest was paid, whether by way of cash or by way of cheque. Admittedly, the complainant is not a money lender and he did not possess money lender’s licence. Under such circumstances, he cannot charge 18% interest and that itself discloses that the complainant is indulged in money lending business illegally.
19 25. This fact is again corroborated by the admission given by the complainant in his cross- examination wherein he admitted that he has lodged a criminal case in C.C.No.1205/2007 against one Srinivas Narsimhan in II JMFC claiming that he is required to receive 1,33,350 US Dollars. This is a huge amount and if it is converted into Indian currency, it runs into Crores. But the complainant has not shown this amount in his income tax return also. Hence, prima facie, it is borne out from the records that the complainant has at first instance, failed to prove his financial capacity to advance the loan of Rs.28 Lakhs and it is also evident that he is indulged in finance business illegally in order to have an unlawful gain.
The learned counsel for the revision petitioner has placed reliance on an unreported decision of this court in CRL.R.P.NO.1252/2019 DATED 11.08.2023, (CHIKKANNA VS. SRINIVASA)
20 wherein it is observed that when the financial status is disputed and it is shown that the complainant has no financial capacity to advance huge loan, the presumption under Section 139 of the N.I.Act is not applicable. In the instant case also, though the accused has admitted the signature on the cheque, it is evident that the cheque was not towards legally enforceable debt. A similar view was taken in CRL.R.P.NO.100141/2021 DATED 13.12.2022 (GOPALKRISHNAMURTHY V. M VENKATESH) by this court. In support of the said contention, learned counsel for the revision petitioner has relied on a decision in CRL.A.NO.112/2012 OF THIS COURT DATED 12.08.2022 (JAGADISH V. H.V.PRABHAKAR), CRL.R.P.NO.391/2014 DATED 21.02.2022 (LAKSHMANAMURTHY R V. UMASHANKAR), and CRL.R.P.1012/2012 DATED 20.01.2022 (SHIVANNA VS. NAGARAJA GOWDA). The principles enunciated in the above cited decisions establish that when the
21 accused is able to prove that the complainant has no financial capacity, then the presumption stands rebutted and the complainant is required to prove regarding his financial status.
The learned counsel for the revision petitioner on this point has also placed reliance on the recent decision of Hon’ble Apex Court in ‘RAJARAM VS. MARUTHACHALAM’, 2023 SCC ONLINE SC 23. On this point only, he has further placed reliance on decision of Hon’ble Apex Court in ‘M.S.NARAYAN MENON VS. STATE OF KERALA AND ANOTHER’,
(2006) 6 SCC 39, ‘KAMALA S. V. VIDHYANDHARAN M J., (2007) 5 SCC 264, ‘RANGAPPA VS. SRI.MOHAN’, (2010) 11 SCC 441, ‘M K JEEVANDHAR VS. MARGARET MANENZES’, 2012 SCC ONLINE KAR 8, ‘K.NARAYAN NAYAK VS. M.SHIVARAMA SHETTY’, ILR 2008 KAR 3635.
22 28. Further, in the decision reported in RAJARAM supra, the Hon’ble Apex Court had an occasion to deal with the submission of the income tax returns also and in para No.28 to 34, the Hon’ble Apex Court has considered the relevancy of income tax returns submitted. In the present case also, the income tax returns submitted by the accused does not establish his income as asserted by him. Further, the evidence of DW2 clearly discloses that the capital account and balance sheet annexed to Ex.P11 and Ex.P12 are not submitted to the Income Tax department and the author of these statements was also not examined. Hence, these capital statements cannot be a ground and admission of complainant / PW1 itself discloses that he has not shown advancement of loan of Rs.28 Lakhs to the accused in his income tax returns. In view of these aspects, it is hard to accept his contention that he has advanced a loan of Rs.28 Lakhs, when his declared income itself is
23 less than Rs.1 Lakh for the relevant period. Hence, the presumption available under Section 139 of the N.I.Act in favour of the complainant stands rebutted. The complainant has failed to prove his financial status.
Both the courts below have not appreciated the oral and documentary evidence in its proper perspective especially with reference to Ex.P10 to Ex.P12 i.e., the income tax returns and admissions given by complainant regarding not referring this transaction in his income tax returns. Further the courts below have also ignored the fact that he has charged interest at the rate of 18% and claimed to have received it and hence, it is evident that he is doing money lending business without having any licence. In that event also, the amount cannot be said to be a legally enforceable debt. When complainant in his evidence asserts that he has got sufficient means and he possess documents to show his income and when
24 he fails to do so, the adverse inference is required to be drawn against him under Section 114 of Indian Evidence Act, 1872. The courts below did not appreciate any of these aspects and in a mechanical way that the cheque belongs to accused and it bears the signature of the accused, proceeded to convict the accused, which has resulted in miscarriage of justice. Though the accused has failed to prove his defence conclusively, but considering the cross-examination, he has probablized his defence and the complainant has not been able to establish his case.
Considering these facts and circumstances, it is evident that the judgment of conviction and order of sentence passed by both the courts below is perverse and arbitrary; hence, it calls interference by this court. Considering these facts, the point under consideration is required to be answered in the affirmative and
25 hence, the petition needs to be allowed. Accordingly, I proceed to pass the following:
ORDER (i) The revision petition is allowed. (ii) The impugned judgment of conviction and order of sentence passed V Additional Civil Judge and JMFC, Mysore in C.C.No.3047/2008 and confirmed in Crl.A.No.12/2014 by I Additional Sessions Judge, Mysore vide judgment dated 06.02.2016 are set aside. (iii) The accused stands acquitted for the offence under Section 138 of the N.I.Act and he is set at liberty. (iv) The bail bonds executed by him stand cancelled. (v) The amount in deposit made by the revision petitioner / accused shall be refunded to him.
Sd/- JUDGE