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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF DECEMBER, 2020
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL APPEAL No.94/2011
BETWEEN:
SRI. VISHWANATH RAO N. S/O. N.R. NAGAPPAIAH AGED ABOUT 51 YEARS NO.979, 2ND CROSS 2ND MAIN, VIJAYANAGAR BENGALURU … APPELLANT
(BY SRI. T. MOHANDAS SHETTY, ADVOCATE)
AND:
N. VIJAYA KUMAR S/O. H.N. SIMHA AGED ABOUT 48 YEARS NO.1988, 1ST ‘D’ MAIN RPC LAYOUT VIJAYANAGARA BENGALURU ... RESPONDENT
(BY SRI. AKASH K. RAO, ADVOCATE FOR SRI. K. RAGHAVENDRA RAO, ADVOCATE)
2 THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C PRAYING THIS COURT TO SET ASIDE THE ORDER DATED 20.11.2010 PASSED BY THE XV ADDL.C.M.M., BENGALURU IN CC.NO.1191/2009 - 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 10.12.2020, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
J U D G M E N T
This appeal is filed challenging the judgment of acquittal dated 20.11.2010 passed in C.C.No.1191/2009 on the file of XV Additional Chief Metropolitan Magistrate, Bengaluru City.
The parties are referred to as per their original ranking before the Trial Court as complainant and accused to avoid the confusion and for the convenience of the Court.
The factual matrix of the case is that both the complainant and the accused are friends. The accused had availed hand loan of Rs.20 Lakhs from the complainant for the purpose of production of Kannada feature film by name ‘Indian Police History’. The accused agreed to repay the said amount
3 with interest at the rate of 18% per annum and towards the repayment of the said amount, the accused had issued a cheque dated 14.10.2008 in favor of the complainant for a sum of Rs.20 lakhs. When the cheque was presented, the same was not honoured and it was dishonoured with an endorsement as ‘refer to the drawer’ on 20.10.2008. A legal notice was issued. In spite of receipt of the notice, the accused failed to pay the amount. Hence, the complainant was constrained to file the complaint.
The accused was secured and he did not plead guilty and in order to substantiate the case of the complainant, he examined himself as P.W.1 and marked the documents as Exs.P1 to P7 and P7(a). The statement of accused was recorded under Section 313 of Cr.P.C. Thereafter, he examined himself as DW.1 and documents at Exs.D1 to D7 are marked. The accused also examined two witnesses as D.W.2 and D.W.3. The Trial Judge after considering both oral and documentary evidence acquitted the accused. Hence, the present appeal is filed before this Court.
4 5. The main grounds urged in the appeal is that the accused not at all proved his defense which he had taken that he had availed only Rs.3,50,000/- and paid the entire amount with interest. The Magistrate failed to consider the evidence of P.W.1 and when the accused admitted the issuance of the cheque, the trial Judge ought to have drawn the presumption under Section 139 of the Negotiable Instruments Act, 1881 (‘the NI Act’ for short). The accused claims that the matter has been settled as per ‘Memorandum of Understanding’ (‘MOU’ for short) and the same was disputed by the complainant. Hence, the disputed document was sent to the handwriting expert and the handwriting expert gave the opinion that the signature does not belong to the complainant and the handwriting expert has not been questioned and his report has been unchallenged. In spite of the same, the trial judge committed an error and passed an illegal order. Though the accused had examined two witnesses and their evidence is contrary to each other and in spite of the same, the trial Judge has relied upon their evidence. The very approach of the trial Judge is erroneous. The accused, who has been examined before the Trial Court deposes that he had
5 availed an amount of Rs.3,50,000/- and the complainant had taken a blank signed cheque and also claims that in terms of MOU, an amount of Rs.5,50,000/- was paid. The accused has categorically admitted in the cross-examination that he has spent Rs.80 Lakhs for production of the said movie and he has maintained the account. The Trial Court ought to have considered the same and he has not placed any material before the Court for having spent the money and availed the loan for the production of the movie. The Trial Judge has erred in holding that the complainant is not an Income Tax Assessee and he has not produced any document pertaining to Income Tax. The burden shifts on the accused when he takes the defense that he has availed an amount of Rs.3,50,000/-. Instead of that the Trial Court held that the complainant has not proved the case. The overall appreciation of evidence by the trial judge is erroneous and in spite of contradictions in the evidence of DWs.1 to 3 with regard to Ex.D2 between the complainant and the accused. The trial judge came to a conclusion that the same is a minor contradiction and the very approach of the trial Judge is illegal and not based on the material on record.
6 6. Learned counsel appearing for the appellant in his arguments he vehemently contend that when the accused took the defense that he had availed only Rs.3,50,000/-, gave the blank cheque and repaid the amount in terms of MOU to the tune of Rs.5,50,000/-. When the said document was sent to the handwriting expert, the report is against the accused that the same is concocted and the report has not been challenged. The accused has taken the false defense and in order to prove the false defense, he has indulged in creating a document of Ex.D2 and relied upon the same before the Court and the said document is the forged document. The trial judge ought not to have given any credence to the evidence of the accused and the Trial Court failed to draw the presumption and to appreciate the evidence in a proper perspective, which has resulted in miscarriage of justice.
Learned counsel appearing for the appellant in support of his contentions, he relied upon the judgment of the Apex Court in the case of Rangappa v. Mohan reported in AIR 2010 SC 1898, referring to this Judgment he would submit that
7 the facts of the case on hand and also the principles laid down in the Judgment referred supra is aptly applicable to the case on hand. The Apex Court categorically held that once issuance of cheque has been admitted, the Trial Judge ought to have drawn the presumption and statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant.
The learned counsel relying upon the judgment of the Apex Court in the case of Rohitbhai Jivanlal Patel v. State of Gujarat and Anr. reported in AIR 2019 Supreme Court 1876, referring to this Judgment he brought to the notice of this Court that the paragraph Nos.14, 17, 18.4 and 18.6, regarding presumption held that, it is required to be presumed that cheques in question were drawn for consideration and complainant received it in discharge of an existing debt. Once presumption of existence of legally enforceable debt drawn in favour of the complainant, onus is shifted on the accused. Unless the onus is discharged by the accused that preponderance of probabilities are tilting in his favour, doubt on the case of the
8 complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused. The accused not denying his signatures on cheques but attempting to suggest availability of his signatures on blank stamp paper with friend. No cogent reasons for him to sign blank stamp paper. Cheques with all relevant particulars are the same cheques forming subject-matter of the complainant's case.
The learned counsel relying upon the judgment of the Apex Court in the case of T.Vasanthakumar v. Vijayakumari reported in (2015) 8 Supreme Court Cases 378, referring to this Judgment he would submit that the presumption under Section 139 of the NI Act that holder of cheque received it for discharge of debt or other liability, the burden is on the accused to rebut the same.
The learned counsel relying upon the judgment of the Apex Court in the case of M/s. Shree Daneshwari Traders v. Sanjay Jain and Anr. reported in AIR 2019 Supreme Court 4003, referring to this Judgment he brought to the notice of this Court that the paragraph Nos.18, 19 and 20 of the said
9 judgment and would submit that the complainant by examining himself as P.W.1 has discharged the initial burden cast upon him that the cheques were issued and the statutory presumption under Section 139 of the NI Act arises that the cheques were issued for the discharge of the debt. The Court also to examine the oral and documentary evidence adduced by the complainant is sufficient to prove that it was a legally enforceable debt and the cheques are issued to legally enforceable debt. The Trial Court ought to have raised the presumption under Section 139 of the NI Act. The evidence adduced by the respondent-accused is not sufficient to rebut the presumption raised under Section 139 of the NI Act.
The counsel relying upon the judgment of this Court in the case of Sri Yogesh Poojary v. Sri K.Shankara Bhat reported in 2019 (1) KCCR 750, he would submit that in this Judgment, this Court held that, legal notice demanding payment issued by the complainant was returned as unserved with a postal endorsement as addressee was out of station and did not claim the letter. The Trial Court acquitted the accused on the
10 grounds that the notice was not served to the accused and that the said transaction was not declared in the Income Tax return filed by the Complainant. This Court held that the very approach of the Trial Court is erroneous. Mere making of a suggestion to the complainant that he has not disclosed the alleged loan transaction in his Income Tax Returns or eliciting the statement from the complainant that he has not disclosed the alleged loan transaction in his Income Tax Returns by itself is not sufficient. It is also required for the accused to establish that the complainant is an income tax assessee or required to be an assessee and that the nature of his income tax assessment and the Income Tax Return which he files, requires him to disclose the alleged transaction or the liability in question.
Per contra, learned counsel appearing for the accused would submit that the amount, which claimed by the complainant is not a small amount and the same is a huge amount to the tune of Rs.20 lakhs and he was not having the capacity to pay the said amount. The complainant also did not produce the books of accounts for having paid the amount in
11 favour of the accused. The accused also examined himself as DW.1 and also examined two witnesses and rebutted the evidence of the complainant. The accused rebutted the presumption and produced the documents, particularly, the police issued the endorsement to show that it was the transaction only for a sum of Rs.3,50,000/- and the cheque which was obtained was mis-used.
Learned counsel appearing for the respondent in support of his contentions, he relied upon the judgment of the Apex Court in the case of John K. Abraham v. Simon C. Abraham & Another reported in (2014) 2 SCC 266, the Apex Court held that, in order to draw presumption under Section 118 read with Section 139, burden lies on complainant to show that he had the requisite funds for advancing the sum of money to the accused that the issuance of cheque by accused in support of repayment of money and that the accused was bound to make payment as has been agreed while issuing cheque in favour of complainant.
12 The learned counsel referring to this Judgment would contend that in the present case, the complainant was not aware of the date when substantial amount of Rs.1,50,000/- was advanced by him and failed to produce relevant documents in support of the alleged source for advancing money to the accused. The complainant also not sure as to who wrote the cheque and contradictory statement in this regard and in view of the said serious defects, reversal of the Judgment was perverse and could not be sustained and the Apex Court set aside the Judgment of the High Court and restored the acquittal order.
The learned counsel relying upon the judgment of this Court in the case of Shiva Murthy v. Amruthraj reported in 2008 (4) KCCR 2477, in this judgment, this Court held that the Trial Court and the Appellate Court have mainly proceeded to consider the conduct of the accused. Before considering the conduct of the accused to find out as to whether or not he has been able to rebut the statutory presumption available under Section 139 of the NI Act. The Courts ought to have considered as to whether the complainant has proved the existence of
13 legally enforceable debt. It is only after satisfying that the complainant has proved the existence of legally enforceable debt, the Courts could have proceeded to draw presumption under Section 139 of the NI Act. As the complainant inability to show his source of income so as to enable him to advance a huge loan; non-production of book of accounts; absence of any written document evidence lending money; absence of any witness to the transaction and non-compliance of provisions of Section 269SS of the Income Tax Act, the case of the complainant is doubtful.
The learned counsel relying upon the judgment of this Court in the case of Shrimathi v. Renuka reported in 2010 Cri.LJ 372 KAR, referring to this Judgment, the learned counsel would submit that the presumption that holder received cheque for discharging of debt and for raising the said presumption complainant has to establish the fact that he received the cheque in question from the accused and thereby he become its holder and the presumption can be drawn only after the
14 complainant establishes that such debt or liability in fact existed as on the date of the cheque was drawn.
The learned counsel relying upon the judgment of this Court in the case of H. Manjunath v. A.M.Basavaraju reported in ILR 2014 KAR 6572, the learned counsel would submit that in the absence of statement in the complaint as to when the amount was actually given to the accused and the absence of material particulars of the transaction in the complaint except signature all other entries are in different handwriting, different ink and undoubtedly made at different time, mentioning of merely the date of issue of cheque without any material particulars creates a doubt in the case of the complainant and it is difficult to accept the version of the complainant.
The learned counsel relied upon the judgment of the Apex Court in the case of M/s. Kumar Exports v. M/s. Sharma Carpets reported in 2009(2) SCC 513, referring to this Judgment, the learned counsel would submit that the presumption displaced by the accused to show that the cheques were not issued by the accused in discharge of any debt or
15 liability and rebuttal does not require proof beyond reasonable doubt. Something probable has to be brought on record. Burden of proof can be shifted back to the complainant by producing convincing circumstantial evidence. Thereafter, the said presumption arising under Sections 118 and 139 cease to operate.
The learned counsel referring to all these Judgments would contend that the accused has made out his case and rebutted the evidence of the complainant. Hence, it does not require any interference of this Court.
Having heard the arguments of the learned counsel appearing for the appellant/complainant and the learned counsel appearing for the respondent/accused and also on perusal of the material available on record, the points that would arise for consideration of this Court are:-
(1) Whether the Trial Judge has committed an error in acquitting the accused for the offence punishable under Section 138 of the NI Act?
(2) What order?
16 Point Nos.(1) and (2):
Before appreciating the oral and documentary evidence, this Court would like to refer to the contents of the complaint. The complainant in the complaint averred that both of them are being friends and the accused requested the complainant for hand loan for production of Kannada feature film titled as ‘Indian Police History’ and promised to repay the amount with interest within a short period. Hence, the complainant had paid the amount of Rs.20 Lakhs and the accused had agreed to repay the same with 18% interest. When the cheque was presented, the same was dishonoured and thereafter notice was given and the accused did not comply with the demand.
Now, this Court has to consider the evidence. The complainant has reiterated the averments of the complaint in his evidence in the affidavit in lieu of his chief evidence. He also marked the documents as Exs.P1 to P7 and P7(a). He was subjected to cross-examination. In the cross-examination, he admits that he knows the accused from the last 10 years. It is
17 suggested that the accused did not shoot the film ‘Indian Police History’ and the same was denied. He also admits that with regard to the said transaction no other persons are mediated. The accused borrowed the amount in the year 2002, 7 to 8 times, but he cannot tell the exact date, but he is having the accounts. P.W.1 says that the accused had maintained the book and he had signed and given the same to him. He also admits that when the accused had borrowed the loan from him 7 to 8 times, he gave the cheques. It is elicited that he gave the money twice in his house and 5 to 6 times in his Lodge. But he did not obtain any receipts. He admits that he is an Income Tax Assessee and he did not disclose the same in the Income Tax returns. In 2001-2003, his annual turnover was Rs.30 Lakhs and the income was Rs.3 lakhs. He can produce the annual Income Tax returns before the Court. It is suggested that in the year 2002, the accused had borrowed an amount of Rs.3,50,000/- and the said suggestion was denied. But he admits that he heard the name of Sri Umesh Banakar and also Puttaswamy. It is suggested that these two persons were introduced him to the accused and the same was denied. It is
18 also suggested that these two persons have convened the Panchayath and the same is also denied. It is also suggested that the Panchayath was held in the Jagajeevanram Nagar Police Station and the same was denied. It is suggested that he gave the statement before the police that the accused gave one cheque in the year 2002 and the same was lost and the said suggestion was denied. The witness says that he never went to the Police Station. It is suggested that the complaint was given on 24.7.2008 to Jagajeevanram Nagar Police Station and witness replies he is not aware of the same. He says Srinivas and Raghavendra were present when he gave the money to the accused. He studied PUC. He admits that he has not given any notice to Censor Board or Karnataka Film Board that he gave the money to the accused to the tune of Rs.20 Lakhs. It is suggested that in the presence of Umesh Banakar and Puttaswamy, MOU was entered on 29.3.2008 and the same was denied. It is suggested that he has signed the said MOU and witness denies his signature. It is suggested that in terms of settlement dated 29.03.2008, the accused gave the amount of Rs.5,50,000/- to him and the same was denied. It is suggested that at the time
19 he replied that the subject matter of the cheque was lost and the same has been mentioned in MOU and he denies the same. In spite of demand being made he did not return the cheque and the same was denied. It is suggested that on 24.7.2008, the accused gave the complaint against him with Jagajeevanram Nagar Police Station for non returning of the said cheque and witness says he is not aware of the same. He admits that in the legal notice and in the complaint and in the affidavit, he has stated that the accused has agreed to repay the amount with 18% interest. He says he paid the amount out of his income and the said income has not been shown in the Income Tax returns. It is suggested that the signature and handwritings available in Ex.P2 are in different ink and the same has been denied. It is suggested that he is not signing the documents similarly and the said suggestion was denied. It is suggested that at the time of availing the amount of Rs.3,50,000/- he has collected two blank cheques for security and the said suggestion was denied.
The accused also led his evidence by filing affidavit and reiterated his defense in his affidavit and also marked the
20 documents as Exs.D1 to D7. He was subjected to cross- examination. In the cross-examination, he admits that the complainant is running ‘Nanda Lodge’. He also admits that the complainant may be running the Hotel by spending lakhs of rupees. He also admits that ‘Nanda Lodge’ located at Gandhinagar. Film Producers and Labourers used to visit the said Hotel. He also admits that he used to visit the ‘Nanda Lodge’. He also admits that he is the producer of ‘Indian Police History’ Kannada movie. He also admits that the Censor Board has raised the objection. Hence, the name was changed and the said objection was raised in the year 2002 or 2003. He admits that while getting the Censor Certificate, the Producer has to place the documents for having spent the money and only thereafter they issue the Censor Certificate. It is suggested that in order to pay the money to the workers, who have worked he was in need of money and used to availing the amount from the complainant and the said suggestion was denied. He claims that he had taken the amount of Rs.3 Lakhs from the complainant and repaid the amount with interest in total to the tune of Rs.5,50,000/-, which he volunteered, but he claims that he was
21 demanding interest at the rate of 7 to 10% to the said amount. It is suggested that while issuing the cheque in favour of the complainant, he used to fill the entire cheque and not giving the blank cheque and the said suggestion was denied. He admits he has signed the blank cheque and giving it to Swastik Shankar and he took it back. He admits that he also gave the blank cheque in favour of B.Krishnamurthy, and obtained the loan. He also admits that after the death of the said Krishnamurthy, he gave the cheque in favour of his son Srinivas and he filed a complaint against him. It is suggested that he has spent Rs.1 Crore to shoot the movie, but he claims that major part of shooting was already done by others and subsequently, he took over the same and spent only Rs.20 lakhs. He also admits that for having returned the amount of Rs.9 lakhs to Srinivas, he did not disclose the same in the Income Tax returns. He also admits that having received the amount of Rs.3.5 Lakhs and repayment of Rs.5,50,000/- has not been shown in his Income Tax returns. He had also not seen who wrote the cheque and also not aware of who filled it. It is suggested that he only got it written the cheque and given to the complainant and the same is denied. He
22 claims in Ex.D2, the complainant had signed in blank paper but he gave the receipt in English Language and he insisted him to give the same in Kannada. Hence, he got it typed in Kannada near Taluk office. Both of them have signed Ex.D2 near the Taluk Office and at that time, only he himself and the complainant were there. Puttaswamy and Umesh Banakar were signed the same after the complainant left the place by taking the amount.
The accused also examined one witness-Umesh Banakar and in his affidavit, he says both complainant and accused were executed MOU and he himself and Puttaswamy attested the said document. It is also his evidence in terms of the said MOU, an amount of Rs.5,50,000/- was paid to the complainant. He was subjected to cross-examination. In the cross-examination, he admits that he is not aware of availing of loan from the complainant by the accused. Before giving the complaint, he came to know that an amount was obtained from Krishnamurthy through the complainant but he does not know what is the total amount but an amount of Rs.3,80,000/- was
23 given to the complainant in his presence in the Court premises. He admits that the said amount of Rs.3,80,000/- was given to the complainant to pay the amount to Sri Krishnamurthy. After four months of having paid the amount they all sat in Mayura Hotel and not met in Kanishka Hotel as deposed. In the said meeting, the complainant said that he will tell within 2 to 3 days, the amount due from the accused. After two days, the accused came and gave an amount of Rs.1,00,000/- to handover the same to the complainant. The remaining amount he will pay and settle the dispute. Still he is having the said money and not paid to the complainant. The police intimated him to settle the issue since the Police have received the complaint and he is spoken to the complainant over the phone. Later, he came to know that the case has been registered against the accused and he tried to resolve the dispute. He did not see the cheque for settling the amount to the tune of Rs.5,50,000/-. The accused has not given the amount of Rs.5,50,000/- in his presence, only the accused told him that he made the payment of Rs.5,50,000/-. It is suggested that no settlement has been arrived between the complainant and the accused and the said suggestion is denied.
24 But he claims that the complainant was present, but the complainant had already signed the document but while making his signature both complainant and accused were present. It is suggested that Exs.D2 and D3 are created by himself and the accused and the same was denied.
The accused also examined one witness as DW.3- Mr.Puttaswamy, in his evidence he says that on 29.03.2008, the complainant and the accused were executed MOU and he himself and Umesh Banakar attested the said document. It is also his evidence that in terms of the said MOU, an amount of Rs.5,50,000/- was paid. After receiving the said amount from the accused, the complainant has filed the case to extract more money from the accused. He identifies his signature in Ex.D2 and he claims that the accused and complainant have signed the said document in his presence. In the cross-examination, it is elicited that he does not know anything other than this transaction between the complainant and the accused. He also admits that when the accused had availed the loan from the complainant he was present and also he is not aware of how
25 much amount the complainant has given to the accused. But he claims that the complainant has told him that he has paid the amount of Rs.3,50,000/- to the accused and insisted him to get the amount from the accused. He claims that, first time they met at Mayura Hotel and thereafter at Kanishka Hotel. It was settled to return the amount of Rs.5,50,000/- in the Hotel. He says that he himself and DW.2 and the accused met in Kanishka Hotel. In the Hotel, they have signed the document-Ex.D2 and the accused gave an amount of Rs.2 lakhs and DW.2 was also present at that time. He came to know that he has already paid the remaining amount of Rs.3,50,000/-. It is suggested that while signing Ex.D2, the complainant was not present and the same was denied. It is suggested that the complainant signature was forged and the same was denied.
Having perused both oral and documentary evidence available on record and also the principles laid down in the judgments referred supra by the respective counsel, this Court has to re-appreciate the evidence available on record.
26 26. P.W.1 claims that he has lent the amount of Rs.20 Lakhs to the accused. It is the defense of the accused that he had availed only an amount of Rs.3,50,000/- and not Rs.20 Lakhs. It is also his defense that while lending an amount of Rs.3,50,000/- he has collected two cheques. The defense, which is raised by the accused was put to P.W.1 in the cross- examination and the same was denied. No doubt, the complainant in the complaint has not stated on what date he has lent the money but his claim is that he gave the amount 7 to 8 times and during that time he has given the cheques. He also admits that he is an Income Tax Assessee but he has not disclosed the same in his Income tax returns. It is suggested that on 29.03.2008, MOU came into existence and accordingly an amount of Rs.5,50,000/- was paid and the said suggestion was denied.
P.W.1 also denied the signature in the MOU. It is also suggested that while getting the amount of Rs.3,50,000/- he gave two cheques for security. Throughout in the cross- examination of P.W.1 except eliciting that he did not disclose the
27 lending of the amount in the Income Tax Returns, nothing is elicited. Though a specific defense was taken in the cross- examination, while cross-examining P.W.1 that there was a MOU and an amount of Rs.5,50,000/- was paid, nothing is elicited. It is important to note that the accused also led defense evidence and in the affidavit as well as in his evidence, he reiterate that he has received only Rs.3,50,000/-. With regard to the capacity of the complainant is concerned, DW.2 admits in the cross- examination that P.W.1 is running ‘Nanda Lodge’ in Bengaluru and further he admits that the complainant is spending lakhs of rupees for running the Hotel Business. He used to visit the said 'Nanda Lodge' and the Producers are also visiting the said 'Nanda Lodge'. He also admits that he shooted the 'Indian Police History’, Kannada movie and objection was also raised by the Censor Board and as a result he has changed the name. He claims in the cross-examination voluntarily that he had availed an amount of Rs.3 Lakhs and he repaid the same with interest totally to the tune of Rs.5,50,000/-. In his evidence, he says he has collected Rs.3,50,000/-, but volunteers that he has collected only Rs.3 Lakhs. It is also evident from the evidence of DW.1
28 that he gave the blank cheque in favour of one Shankar, who claims he took it back and also he admits that he had availed the loan from Krishnamurthy and gave the blank cheque in his favour also. After his death, he gave the cheques in favour of his son Srinivas and he had also filed a case against him. He also admits that for having paid the amount of Rs.9 lakhs to Krishnamurthy including the interest, he did not disclose the same in his Income Tax returns. Further, he admits that for having paid the amount of Rs.5,50,000/- in favour of the complainant also he did not disclose the same in the Income Tax Returns. He did not dispute the cheque, but, he claims that the matter was settled and in terms of Ex.D2 he made the payment in favour of the accused in the presence of DWs.2 and 3. In the cross-examination he admits that he obtained the signature on Ex.D2 from the complainant and the same was an empty paper. It is also elicited from DW.1 that he himself and the complainant both have signed Ex.D2 near Taluk Office and at that time he himself and the complainant were present. He categorically admits that he took the signature of DWs.2 and 3 after the complainant left the place by after taking the money. Hence, it
29 is clear that DWs.2 and 3 were not present at the time of signing Ex.D2. It is important to note that the complainant disputed the document-Ex.D2 and also the document was sent to the handwriting expert and the handwriting expert given the report that the signature in Ex.D2 is not the signature of the complainant. The accused also relies upon the document Ex.D3- endorsement issued by the Police Inspector of Jagajeevanram Nagar Police Station and these documents do not contain the signature of the complainant. But also relies upon the endorsement for having given the complaint in terms of Ex.D4. The accused also gave the reply in terms of Ex.D5.
In paragraph No.6, he specifically contended that he took the amount of Rs.3 Lakhs and he repaid the same with interest, in total, a sum of Rs.5,50,000/-. The complainant has executed a receipt in front of Mr.Umesh Banakar and others. But the said receipt is not placed before the Court. It is also pertinent to note that DWs.2 and 3 both claim that they were present at the time of execution of document - Exs.D1 and D2. But D.W.1 says no one present except himself and complainant.
30 29. DW.2 categorically admits that an amount of Rs.1 lakh was given to him to return the amount to the complainant and the said amount is still in his possession and not paid the amount to the complainant. It is also elicited that the accused has not given the money in favour of the complainant in his presence but only the accused told him about giving money to the complainant.
Having taken note of the evidence of DW.2, it is clear that the amounts are not given to the complainant. DW.3 though in his evidence, he says that the amount was paid in his presence and the complainant has affixed the signature on Ex.D2. It is elicited in the cross-examination that he does not know anything about the payment of money by the complainant to the accused and also how much amount was paid to him, but he claims that the complainant told him that the accused has availed an amount of Rs.3,50,000/- and insisted him to get the money from the accused. He also claims that in the Hotel, it was decided to return the amount of Rs.5,50,000/-. All of them have signed the documents in the Kanishka Hotel, DW.2 was also
31 present and he claims that an amount of Rs.2 lakhs was paid, but he came to know that already an amount of Rs.3,50,000/- was paid prior to that. DW.2 says that in his presence the amount was not paid and he subsequently signed the documents-Exs.D2. But DW.3 claims that in his presence only after receiving the amount of Rs.2 Lakhs, the complainant has signed the documents. It is suggested that while signing the document - Ex.D2, the complainant was not present and the same was denied. DW.1 himself says that he obtained the signature of DWs.2 and 3 after the complainant left the place by receiving the money. There are material contradictions in the evidence of DWs.1 to 3 for having repaid the amount of Rs.5,50,000/-. Though, the accused relies upon the document- Ex.D2, it is proved that the said document is forged and the evidence of the handwriting expert is unchallenged and also the accused did not examine the handwriting expert and did not dispute the opinion of the handwriting expert. When such being the case, the evidence of the accused cannot be relied upon and the Court cannot give any credence to the evidence of DW.1. For having repaid the amount, the evidence of DWs.1 to 3 are
32 contradictory to each other and even the document-Ex.D2 came into existence is also under the suspicious circumstances. The trial Judge has failed to appreciate these materials before the Court.
The Trial Judge though considered the Judgment in Rangappa’s case (supra), an observation has been made that the ratio laid down in the aforesaid decision is applicable and supports the defense taken by the accused. The very observation is erroneous. How it supports the case of the defense has not been stated in the judgment. Instead of that the same judgment is helpful to the complainant since the complainant has caused the legal notice in terms of Ex.P4 and also produced Ex.P5-Postal receipt, Ex.P6-UCP receipts, Ex.P7- notice and Ex.P7(a)-envelope.
The Judgment of this Court in Sri Yogesh Poojary’s case (supra), is aptly applicable to the case on hand with regard to the service of notice is concerned and so also the Apex Court in the Judgment of Rangappa’s case (supra), categorically held that when the notice is issued and the accused did not dispute
33 the issuance of cheque and signature, the presumption available in favour of the complainant unless the evidence of the complainant is rebutted. In the case on hand, though the accused made all efforts to rebut the case of complainant nothing is elicited in the cross-examination of PW.1 and instead of the evidence, which he has adduced as DW.1 and also DWs.2 and 3 and the same falsifies the case of the accused. The very defense of the accused is that in one breath he borrowed an amount of Rs.3 Lakhs and in another breath an amount of Rs.3,50,000/-, totally, repaid the amount of Rs.5,50,000/-. In view of the admission, it is narrow down the case of the complainant since the accused admitted the transaction but only the defense is that he repaid the amount of Rs.5,50,000/-.
I have already pointed out that though he relies upon the document - Ex.D2 and the same is not proved. DW.3 says when the document - Ex.D2 came into existence the accused paid the amount of Rs.2 Lakhs and none of the witness speaks about the payment of another Rs.3,50,000/- prior to the document coming into existence. It is also not the evidence of
34 DWs.1 and 2 apart from that DW.1 himself claims that he obtained the signature of DWs.2 and 3 after complainant left the place by taking the money. For having paid the money of Rs.5,50,000/-, he categorically admits that except the complainant and accused, no other persons were there. When such being the case, the defense of the accused is not substantiated. But the trial Judge committed an error that the accused led the plausible evidence. Despite the document- Ex.D2, which has been forged and created, has been proved by the complainant that the signature of the accused does not appear in Ex.D2. The Trial Judge has committed an error in relying upon the evidence of the accused. The observation made was that the complainant has paid the amount in the presence of one Zinnias and Raghavendra, but not taken any steps to examine those persons, is an error committed by the Trial Court. When the complainant has proved his case and accused admitted the signature and also admitted the transaction only his contention is that only an amount of Rs.3,50,000/- is involved. Hence, burden shifts on the accused to rebut the same instead of the trial judge committing an error in not examining
35 the witness, who was present at the time of lending the loan. The other reason given by the Trial Court also if really the complainant has paid such a huge amount of Rs.20 Lakhs to the accused as hand loan what would prevent him to pay the same by way of an account payee cheque or by way of Demand Draft as required under the provisions of Section 269SS of Income Tax Act. The Trial Judge also committed an error in observing with regard to Section 269SS of Income Tax Act, the accused also claimed that he repaid the amount of Rs.9 Lakhs to one Srinivas and also paid the amount to Krishnamurthy. He also categorically admitted that he did not disclose the same in his Income Tax Returns. There cannot be two yardsticks and the Trial Judge comes to a conclusion that the same is not disclosed in the Income Tax Returns. The accused also admitted the same that he did not disclose the same in the Income Tax Returns. The trial Judge ought not to have come to such a conclusion. The trial Judge failed to appreciate the admission elicited from the mouth of DWs.1 to 3 particularly with regard to the defense which he has taken instead of that doubted the case of the complainant. Even though nothing is elicited in the cross-
36 examination of PW.1 except not disclosing the same in the Income Tax returns. Hence, the Judgment of the Trial Court requires to be set aside, the same is perverse and not based on the material available on record and also the documents relied upon by the accused also not creditworthy and the accused even gone to the extent of indulging in creating of document - Ex.D2 and other documents not comes to the aid of the accused and in spite of that he has not rebutted the evidence of the complainant, erroneously acquitted the accused.
The subject matter of the cheque is for the year 2008 and almost 12 years has elapsed and while imposing the fine, this Court has to take note of the period of 12 years in sentencing the accused for the offence under Section 138 of the NI Act.
In view of the discussions made above, I pass the following:
ORDER (i) The appeal is allowed.
(ii) The impugned judgment of acquittal dated 20.11.2010 passed in C.C.No.1191/2009 on the file of XV Additional Chief Metropolitan Magistrate, Bengaluru City, is hereby set aside.
(iv) The accused is convicted for the offence punishable under Section 138 of the NI Act.
(v) The accused is directed to pay the amount of Rs.22,00,000/- to the complainant within eight weeks from today and in default of the payment of the fine amount, the accused shall undergo simple imprisonment for a period of one year.
(vi) The trial Court is directed to secure the accused if he fails to pay the amount and subject him to serve sentence.
(vii) The Registry is directed to transmit the Trial Court records to the Trial Court, forthwith.
Sd/- JUDGE cp*