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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF FEBRUARY, 2020
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL APPEAL No.57/2017
BETWEEN:
M/S. SAPTAGIRI TRADERS, No.20/22, 1ST FLOOR, 11TH MAIN, 14TH CROSS, WILSON GARDEN, BANGALORE – 560 027. REP. BY ITS MANAGING PARTNER SRI VENKATESH MURTHY.
… APPELLANT
(BY SRI ADINARAYAN, ADVOCATE)
AND:
D. VENKATESH, AGED ABOUT 57 YEARS, No.12, 7TH ‘C’ MAIN ROAD, 3RD STAGE, 4TH BLOCK, BASAVESHWARANAGAR, BANGALORE- 560 079.
... RESPONDENT
(BY SRI N.P.SINGRI, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT OF ACQUITTAL ORDER DATED 18.11.2016 PASSED BY THE XXI A.C.M.M, BENGALURU IN C.C.NO.41767/2010 ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 07.02.2020, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
2 J U D G M E N T
This appeal is filed challenging the judgment and order of acquittal dated 18.11.2016 passed in C.C.No.41767/2010, on the file of XXI Additional Chief Metropolitan Magistrate, Bangalore, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘NI Act’ for short).
The parties are referred to as per their original ranking before the Trial Court as complainant and accused to avoid confusion and for convenience of the Court.
The factual matrix of the case is that the complainant in the complaint has contended that the accused is doing road contract business. The accused was purchasing bitumen for asphalting the road from the complainant on credit basis. In addition to the supply of bitumen to the accused, the complainant had given hand-loan of Rs.5,00,000/- through cheque bearing No.382015 on 16.6.2008. Hence, the accused had issued three cheques in favour of the complainant, two cheques amounting to a sum of Rs.5,00,000/- each and one cheque for Rs.3,00,000/-. The complainant had presented the said cheques to his bank on 20.4.2010 and those cheques were
3 dishounoured with an endorsement “exceeds arrangement”. The said fact was brought to the notice of the accused by issuing legal notice dated 24.4.2010 and the same was duly served and the accused had given untenable reply dated 6.5.2010. Hence, the complainant had filed the complaint which is numbered as C.C.No.41767/2010.
The accused did not plead guilty. Hence, the complainant to substantiate his case, examined himself as P.W.1 and got marked the documents at Exs.P1 to 16. The accused examined himself as D.W.1 and got marked one document as Ex.D1. The Trial Court after recording 313 statement of the accused and after hearing both the parties, acquitted the accused. Hence, the present appeal is filed before this Court.
The grounds urged in the appeal is that the learned Trial Judge has failed to adopt a pragmatic approach while appreciating the facts and specific contentions raised by the parties. The Trial Judge has overlooked the contentions and has wrongly come to the conclusion that the complainant has not proved his case, even though there is no dispute with regard to the fact that the complainant had supplied bitumen to the
4 accused and produced documents at Exs.P.13 to 15 to evidence the said fact and erroneously acquitted the accused based on the wrong assessment of oral evidence without giving weightage to the documentary evidence. The Trial Judge has failed to invoke the presumption under Sections 118 and 139 of the NI Act. In the absence of any rebuttal evidence, the Trial Judge ought to have drawn the presumption and the same has not been done.
The Trial Judge has totally erred in not taking into consideration that there is no misuse of cheques and the accused had not initiated any legal action against the complainant for the misuse of cheques, which were purported to have been given to the complainant for security purpose. This aspect itself was sufficient for the Trial Court to infer that the accused is liable to discharge his debt. Apart from that, the signatures of the accused were sent to the handwriting expert and the handwriting expert opined that those signatures are the signatures of the accused. Inspite of that, the Trial Court has committed an error in acquitting the accused.
The learned counsel for the complainant reiterated the grounds urged in the appeal memo and further contended that
5 Exs.P.13 to 15 supports the case of the complainant. The Trial Court failed to appreciate the documentary evidence available on record, instead accepted the contention of the accused relying upon his oral evidence. The very conclusion of the Trial Judge that the accused has raised a probable defence to rebut the presumption, is not correct. The very conclusion of the Trial Judge that the complainant has failed to prove the guilt of the accused beyond reasonable doubt, is erroneous. The Trial Court while considering the case of the complainant did not appreciate the admission elicited from the mouth of D.W.1 and nowhere in the judgment discussed the evidence of the accused. Hence, it requires interference of this Court.
Per contra, learned counsel for the accused in his argument vehemently contended that the complainant did not properly explain how he arrived at an amount of Rs.13,00,000/- when the sale transaction is only to an extent of Rs.5,95,491/- and the accused made the payment of Rs.5,00,000/- and remaining balance of Rs.95,491/- was paid by way of cash and there was no liability. The Trial Judge has rightly appreciated both oral and documentary evidence available on record. It is
6 the duty cast upon the complainant to prove the transaction and also the liability and the same has not been done. The Trial Judge accepted the version of the accused and rightly comes to the conclusion that the defence of the accused is probable and there are no grounds to interfere with the order of the Trial Court.
Having heard the arguments of the learned counsel for the complainant and the learned counsel for the accused, the points that arise for the consideration of this Court are: (i) Whether the Trial Court has committed an error in acquitting the accused for the offence punishable under Section 138 of the NI Act?
(ii) Whether the Trial Court has committed an error in not drawing the presumption under Sections 118 and 139 of the NI Act?
(iii) What Order?
Points (i) to (iii):
On perusal of the complaint, it is clear that the complainant has averred that he is having acquaintance with the accused, since the accused was purchasing bitumen from him. The complainant was supplying bitumen to the accused on credit
7 basis. It is the specific case of the complainant that he had supplied bitumen to the accused and apart from that he had also given hand-loan of Rs.5,00,000/- through cheque on 16.6.2008. In order to pay the hand-loan as well as the business dues, the accused had issued three cheques and the same were dishonoured. It is also his case that notice was issued and the accused gave untenable reply. The complainant in order to substantiate his case, examined himself as P.W.1 and he reiterated the averments of the complaint in his affidavit and got marked the documents at Exs.P1 to 16 i.e., Exs.P.1 to 3 - cheques, bank endorsements at Exs.P.4 to 6, legal notice at Ex.P7, RPAD at Ex.P8, UCP at Ex.P9, unserved postal cover at Exs.P10 and P11, reply to notice at Exs.P.12, invoices at Exs.P.13 to 14, statement of accounts at Ex.P.15 and the complaint at Ex.P16. He was subjected to cross-examination.
In the cross-examination, it is suggested that he used to refer his name as Venkatesh A. or A.Venkatesh, and the same was denied. However, he admits that he is having acquaintance with the accused for the last 10 to 12 years. He also says that the transactions between them are oral transactions and he also
8 admits that for supply of bitumen he used to issue invoice. He admits that he does not remember how many times he has supplied bitumen to the accused so also he cannot tell how many times the accused made the payment. He is not having any accounts for the said transaction. It is elicited that in between 2007-08, he had supplied 5 to 6 loads of bitumen and the accused was in arrears of Rs.26,00,000/-. There were documents to that effect. He again says that if all the invoices are put together, it comes to Rs.26,00,000/-. He also volunteers that the said amount is inclusive of Rs.5,00,000/-, which he has given to him. He admits that he has issued notice in terms of Ex.P.7 to the accused. He admits that in the notice he did not mention anything about lending of Rs.5,00,000/- given to the accused by way of cheque. He says that the said cheque was given in the year 2009 and he does not remember the cheque number, but he advanced the said amount through his bank Catholic Syrian Bank. He did not obtain any document when the cheque was given to him. But he has produced the bank statement.
It is suggested that entry dated 16.6.2008 in Ex.P.15 is in respect of Rs.5,00,000/- cheque and the same is the self-
9 cheque of the accused and he got encashed the said amount, and the said suggestion was denied. It is suggested that while supplying the bitumen in terms of Exs.P13 and 14, he told the accused that if he gives the cheques Exs.P.1 to 3, then only he will supply the same, and the said suggestion was denied. The witness volunteers that those cheques are given after two years of supplying the material i.e., on 20.4.2010. It is suggested that the accused had given the blank signed cheques, and the said suggestion was denied. It is also elicited that he did not question the accused why he put two signatures on Ex.P3, but he claims those signatures are made in his presence. He admits that the signature and the writings found in Ex.P.3 are of different inks. He admits Exs.P.1 to 3 are not in respect of Exs.P13 and 14. However, he says that in the notice he has mentioned the balance is Rs.13,00,000/- and hence he has given the cheque and the same is not mentioned in the notice. He admits that in the complaint as well as in his chief evidence he did not mention total balance amount. He admits that in terms of Exs.P13 and 14, the balance payable was Rs.5,95,491/-. It is suggested that for the said amount, Exs.P.1 to 3 are given as security, and the same was denied. It is suggested that the accused made the
10 entire payment of Rs.5,95,491/- by way of cheque and cash, and the same was denied. It is suggested that inspite of the accused demanding to return the cheques, which were given as security, he did not return and made use of the same for filing this complaint, and the same was denied. It is also suggested that the accused had supplied Paver Finisher Machine to the complainant and the complainant had agreed to pay Rs.75,000/- as rent per month, and he says he is not aware of the same. It is suggested that he did not pay the monthly rent for a period of 14 months and the same was due to the extent of Rs.10,50,000/-, and he says that he is not aware of the same. It is suggested that the said machine is still in his custody, and the same was denied.
The accused has been examined as D.W.1 and he reiterates the averments made in his reply notice in his affidavit. He got marked the document Ex.D1 – account extract. He was subjected to cross-examination. In the cross-examination, he admits that he is working as Civil Contractor from last 20 years and he is an income tax assessee. He also admits that Exs.P.13 and 14 are in respect of his address. It is suggested that Saptagiri Traders belongs to Venkatesh Murthy and he claims
11 that the same belongs to A. Venkatesh. He admits that for having paid three security cheques as against the amount of Rs.5,95,491/-, he has not obtained any separate receipt. It is suggested that in terms of Ex.P15, the complainant gave an amount of Rs.5,00,000/- to him, and the witness denies the same that he is not aware. He admits that he is not having any document to show that he gave Paver Finisher Tar Machine to the complainant on a monthly rent of Rs.75,000/-. He also admits that he is not having any document to show that he is having such a machine with him. He admits that the entries found in Ex.D1 is not made in favour of the complainant’s firm or Venkatesh Murthy. However, he volunteers that he gave that amount to the person who supplied bitumen i.e., A. Venkatesh. It is suggested that he was due to an extent of Rs.25,00,000/- and towards part payment he gave the cheques Exs.P1 to 3 and the witness says that two cheques are enchased and he paid the cash of Rs.95,490/- and Exs.P1 to 3 were given as security. It is suggested that Exs.P1 to 3 are given to clear the balance amount, and the same was denied. However, he admits that if any big transactions are made, the same would be made through writing.
Now this Court has to re-appreciate the evidence available before the Court. Having considered both oral and documentary evidence, there is no dispute with regard to supply of bitumen in favour of the accused in terms of Exs.P13 and 14. Total amount is also Rs.5,95,491/-. It is the contention of the accused that he made the payment of Rs.5,00,000/- by way of cheque and paid the balance amount of Rs.95,491/- by cash. It is also the case of the complainant that he had supplied bitumen worth of Rs.5,95,491/- in terms of Exs.P13 and 14. It is also the case of the complainant that he had also lent hand-loan of Rs.5,00,000/- to the accused in 2008 i.e., on 16.6.2008 vide cheque No.382015 and hence the accused was due in all to an amount of Rs.13,00,000/-. Hence, he had issued the cheques. It is important to note that in the cross-examination of the accused for having received the amount of Rs.5,00,000/- in terms of Ex.P.15, he made the payment, but witness says that he is not aware of the same. It is not his specific denial that he did not receive the said amount. Hence, it is clear that Rs.5,00,000/- was paid to him in terms of Ex.P15. It is the defence of the accused that he had supplied Paver Finisher Tar Machine in favour of the complainant and still the machine is in the custody
13 of the complainant and the complainant did not either return the machine or paid the rent of Rs.75,000/- per month. It has to be noted that in the cross-examination, the accused admits that he is not having any document to show that he has given Paver Finisher Tar Machine to the complainant and also he has not produced any document to show that such machine was in his possession.
In the cross-examination of P.W.1 also, nothing is elicited with regard to the supply of the said machine and liability. It is also pertinent to note that the accused did not take any action against the complainant for having not paid the rent towards the said machine for an amount of Rs.10,50,000/-. On perusal of documentary evidence Exs.P13 and 14, it is clear that bitumen was supplied amounting to Rs.5,95,491/- and so also an amount of Rs.5,00,000/- was given to the accused and the said payment is also made through cheque and Ex.P15 evidence the same. During the course of cross-examination of P.W.1, it is suggested that the amount which is evident in terms of Ex.P.15 dated 16.6.2008 was the self-cheque of the accused and the same was encashed by the complainant and the said suggestion was denied categorically by the complainant. Hence, it is clear
14 that the accused took the defence that the said cheque was self- cheque of the accused and the same was encashed by the complainant. In order to substantiate the said contention, the accused has not produced any material before the Court. No doubt in the cross-examination of P.W.1, it is elicited that in the notice the complainant did not mention about the amount of Rs.5,00,000/- lent to the accused. But the accused did not dispute the payment of Rs.5,00,000/-. Instead, the accused relied upon document Ex.D1 – account extract pertaining to State Bank of Mysore.
On perusal of Ex.D1, no doubt there is an entry dated 21.7.2008 to an amount of Rs.5,00,000/- and the said amount is paid in favour of Venkatesh A. The accused contend that the said payment was made in favour of the complainant towards bitumen. On perusal of Exs.P13 and 14, it is clear that bitumen was supplied in the month of March 2008 i.e., on 22.3.2008 and 25.3.2008. The accused made an attempt to connect the payment of Rs.5,00,000/- in terms of Ex.D1 in favour of the complainant. It has to be noted that Ex.D1 payment is made in favour of one Venkatesh A.
15 17. During the course of cross-examination of P.W.1, a suggestion was made that the complainant is also called as Venkatesh A. or A. Venkatesh, and the same was specifically denied. On perusal of Ex.P15 which evidence the fact of payment of Rs.5,00,000/- in favour of the accused, is standing in the name of Saptagiri Traders and payment of Rs.5,00,000/- is made in favour of D. Venkatesh i.e., accused only. The accused did not place any material to show that an amount of Rs.5,00,000/- was paid in favour of the complainant. It is pertinent to note that in the cross-examination of D.W.1, he categorically admits that in terms of Ex.D1, the amount has not been paid either in favour of the complainant’s firm or in favour of Venkatesh Murthy. But he volunteers that the said amount is paid to A. Venkatesh for the supply of bitumen.
Having considered the specific admission of D.W.1, the very contention of the accused that he made payment of Rs.5,00,000/- in favour of the complainant, has not been proved. Apart from that, he claims that he made payment of Rs.95,491/- by way of cash and for having made the payment of Rs.95,491/- also, he has not examined any person and not produced any receipt for having paid the same. It is also
16 important to note that in the cross-examination of P.W.1, a suggestion was made that the accused made the payment of Rs.45,491/- by cash, and the same was denied. The balance amount was Rs.95,491/- and not Rs.45,491/-. To substantiate the contention of the accused, there is no material.
The Trial Court failed to take note of both oral and documentary evidence available on record and did not appreciate the material on record in right perspective. The Trial Judge instead of believing the documentary evidence, believed the oral evidence of D.W.1 and failed to consider the admission elicited from the mouth of D.W.1. I have already pointed out that there is no dispute with regard to the supply of bitumen and also the complainant has placed document Ex.P15 for having paid hand- loan of Rs.5,00,000/- in favour of the accused through cheque. The accused in the cross-examination also did not specifically deny the payment of Rs.5,00,000/-. Only in the cross- examination he says he is not aware of it and there is no any specific denial. The accused did not prove the fact that he made the payment of Rs.5,00,000/- in favour of the complainant. The document Ex.D1 cannot be relied upon since the accused himself admitted that the said payment is not either in favour of the firm
17 or in favour of the complainant but he tries to give an explanation that payment was made in favour of the person who supplied bitumen i.e., Venkatesh.
The Trial judge failed to appreciate both oral and documentary evidence and has erroneously come to the conclusion that the case of the accused is probablised by placing the material and very such conclusion arrived by the Trial Court is erroneous. Instead of considering the documentary evidence, the Trial Court relied upon oral evidence. The documentary evidence excludes oral evidence and the material placed before the Court also does not inspire the confidence of the Court to accept the contention of the accused. Though the accused claims that he had supplied the Paver Finisher Tar Machine, he categorically admits that he is not having any document to show that he had given the same to the complainant and also to show that he was having such a machine with him, he did not place any material. When such being the case, the accused did not probablise his case by placing either oral evidence or documentary evidence and inspite of it, the Trial Court committed an error in acquitting the accused. It is rightly pointed out by the complainant’s counsel that when the
18 document evidence the fact of transaction, the Trial Judge ought to have invoked the presumption under Sections 118 and 139 of the NI Act. No doubt, under Section 139 of the NI Act, the presumption is rebuttal presumption and the accused did not place any rebuttal evidence before the Court to rebut the presumption. Under such circumstance, the Trial Court ought to have drawn presumption under Section 118 of the NI Act.
I would like to rely upon the judgment of the Hon'ble Apex Court in the case of RANGAPPA v. SRI MOHAN reported in (2010) 11 SCC 441, wherein the Apex Court has held that the Court can draw presumption that the cheques are given towards debt or liability, unless the same is rebutted. In the case on hand, there is no rebuttal evidence except the oral defence and the Trial Court accepted the same as probable and the said finding is erroneous.
Having considered the material available on record and also giving anxious consideration, the judgment of acquittal requires to be set aside.
In view of the discussions made above, I pass the following:
19 ORDER (i) The appeal is allowed.
(ii) The impugned judgment and order of acquittal dated 18.11.2016 passed in C.C.No.41767/2010 is set aside.
(iii) The accused is convicted for the offence punishable under Section 138 of the NI Act and is directed to pay double the amount of the cheque amount and if he fails to pay the amount within four weeks, the accused shall undergo simple imprisonment for a period of six months.
Sd/- JUDGE