Commissioner of Income tax vs. M/s.A.Venkata Rao AND others

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY ,THE FIFTEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE JUSTICE G SRI DEVI CRIMIN AL REVISI ON CASE NO:41 OF 2013 CriminalReVisionCaseUnderSection3gT&40lofCriminalRevisionCase against the Judgment dated O3-01-2013 in Crl A No 269 of 2010 on the llle of thcCourtofthelVAdditionalMetropolitanSessionsJudge'atHyderabad Confirming the Judgment dated 26-07-2010 passed in C C No 326 of 2008 on the file of the court of the xlv Additional Judge-cum-XVlll Additional Chief IVetropolitan Magistrate at Hyderabad, Between: Sunil Kumar Shamsheergunj, Hyderabad. CRLRCMP. NO: 69 OF 2013 C R LRC}I \O: 1021 OF 2l) l.l ...RESPONDENTS/COMPLAINANTS 1 2 Jain,S/o Viiayaraj Jain,aged 56 years. FJo H No 18-4-83' --'Hro"rrolb,'- P'resentlv - at H.N6.3-4-3728/1 , - -Lingampally' .,.PETITIONER/ACCUSED AND Dinesh Kumar Jain, S/o Manikchand Jain, aged 46 ye€rs,Oqc: Business' Flal ilii.Ioz, i.i"r;i snwi Apirtments, bkP colon'v, Eksai Road, Boriveli,lw-est) rrrrumuai-+oo oez. . .CoMPLAINANT The State of Andhra Pradesh' Rep. by its Public Prosecutor, High Court of A'P ' at Hyderabad. Petition under Section 397(1) Cr P.C praying that in lhe circumstances stateo in inJ aifioauit filed in suppirt of tne peiltioh, ine !!o,n cgq( mav be pleas.ed i,ltr.rjljrii jn" "ri"Jt,on or sent'encu pass6d in CC No.326 of 2008 on the file of i;" i\ilI Aoot ct,i"r M.N/.. Hvdeiabad as confrrmed rn Crl A'No'269 of 2010 on the iiiJ 6iiiiL rv Aool. Metropolit5n Sessions Judse, at.Hvderab€d, dt'3-1-2013' and i"LiS" tn" p"iitioner on bail in pending drsposal of the Crl'R'C' PetitionunderSectionl4TN.l.Actprayingthatinthecircumstancesstated in the affidavit filed in support of the petition, the High Court may be pleased to permit the petitioner to compound the offence with the Respondent /Accused and he may be acquitted of all charges in CrlRc NO.4-'!/20-13- which is arose out Cc.ito.326/2008 on the file of the XVlll Additional Chief Metropolitan Magislrate, Hyderabad. pending before this Hon'ble Court. Counsel forthe Petitioner : SRl. C' SHARAN REDDY Counsel for the Respondent No. 1 : SRl. P PREM RAJ Counsel for the Respondent No.2: PUBLIC PROSECUTOR (TG) The Court made the following: ORDER

HONOURABLE IUSTICE G. SRIDEVI This. Criminal Revision Case is filed under Sections 397 and 401 of the Code of Criminal procedure, 1973 against the judgment, dated 03.01.2013, passed in Crl.A.No.269 of 2010, wherein the learned Iv-Additional Metropolitan Sessions Judge, Hyderabad, confirmecl the .judgment, c1t-rted 26.07.2010, passed in C.C.No.326 of 2008 orr the file of rhe XlV-Additional Judge-cum-XVlll-Additional Chief Metropolitarl Magisrrate at Hyclerabad. 'fhe facts of the case are as untler: The 1$ respondent herein, who is the complainant before the trial Court, filed a private complaint under Section 200 Cr.P.C. against the revision petitioner/ accused for the offence p'unishable under Section 13g of the Negotiable Instruments Act, stating that he was doing business in gold j6wel1ery and supplies the same to various traders; that the revision petitioner/ accused approached him in September, 2004 and requested him for a hand loan of Rs.32.00 lakhs for his business pLlrposes with a promisc to repa1, the sante h,ithin a short time; that betweer-r September, 200; ;n.1 November, 2004. the l,t t- CRL.R.C. No.41 of 2013 IUDGMENT:

GSD, J Crlrc 41 2013 respondent/complainant gave an amount of Rs.32,00,000/- on various occasions to the revision petitioncr/ accused; that, on 30.07.2005, the revision petitioner/ accused executed a Memorandum of Understanding promising to repay the amount as per the terms and conditions mentioned in the said Memorandum of Understanding and issued three post dated cheques, one cheque for Rs.5,00,000/- and two cheques for Rs.1,00,000/- each towarcls clischarge of the said debt and that when the saicl cheques lt,ere prescnted for cncashment, tlrc same were dishonoured on 24.11 .2005 on the ground that tlre revision petitioner/ accused issued instructions to the banker to stop payment. Therefore, the 1st lespondent/complainant got issued notice, to which the revision petitioner/ accused gave a reply with false contents. As suclL the 1"t respondent/complainant filed a complaint for the offence punishable under Section 138 of the Negotiable Inshuments Act, 1881 (for short'the Act'). On behalf of the I't respondent/complainant, P.Ws.l arrd 2 were examined and Exs.Pl to P12 were marked. On behalf of the revision petitioner/ accust d, D.Ws, I and 2 rvere examinecl arrd Exs.D I ancl D2 u,ert-. markecl

t GSD, J Crlrc 4l 2013 The trial Court, after considering both the oral and documentary evidence found the revision petitioner/accused guilty for the offence punishable under Section 13g of the Negotiable Instruments Act an<I accordingly convicted and sentenced him to undergo simple imprisonmerrt for a period of six months and to pay compensation of Rs.10,000/_ to the 1d respondent/complainant, in default, to undergo simple imprisonment for three months. Aggrievetl bv the same, the revision petitioner/ accused pre.ferred Crl.A.No.269 of 2010 before the IV-Additional Metropolitan Sessions Judge, Hyderabad. Vide jtdgment, dated 03.01.2013, the learned Sessions Judge dismissed the appeal confirming the conviction and sentence imposed by the trial Court. None appears on behalf of the 1"t respondent/complainant. Heard leamed Counsel for the revision petitioner/ accused, learned Assistant public Prosecutor appearing for the 2,,t responrlent/ Sta te ancl perusecl tht recorcl. Learned Counsel for the revision petitioner/ accuseci would submit that the 1.t responclent/ complainant has no capacity to lend such a huge amount of Rs.32.00 lakhs. It is I

-1 further submitted that the 1't respondent/complainant, who was examined as P.W.l, has adrnitted in his evidence that though he was an income tax assessee/ the returns were not filed in the Court and he did not know whether the present transaction was shown in his ircome tax retums or not and that his income is only Rs.20,000/- to Rs.30,000/- per month lt is further submitted that when the revision petitioner/accused disputed the financial capacity of the 1't respondent/complainant, the burden shifts on the l't respondent/complainant to prove the same lt is also subrnitted that the l'r respondent/ complainant has not proved his source of furrcls, thc t.trode, tlle timc or place whcn he lent such huge amount of Rs.32.00 lakhs ar-rd that the revisiot-t petitioner/ accused did not execute any document at the time of receipt of the loan. It is further submitted that P'W'1 also admitted in his cross-examination that the revision petitioner/ accused lodged a rePort against him and one Abid Bhai, and the same was registered as a case in Crime No'353 of 2005 of Humayun Nagar P.S., for the offences punishable under Sections 342, g47 and 506 of I'P'C', stating that the 1s respondent/comPlainant and one Abid had forcibly taken his signatures on tlventv cheque leaves bearing Nos-247161 to GSD..] Crlrc ll l0ll

) c 247180 including the impugnecl cheques, GSD, J Crlrc_41_2013 Memorandum of re\rtsloll 1tt Understanding and other clocuments It is also submitted that apart from filing the present case against the petitioner/ accused in Hyderabacl, the responclent/complainant also file.cl sevell cases of a similar nature in the Courts at Mumbai in corurectiorr rvith the alleged dishonour of the above cheques arising out of the same hansaction. Out of those seven cases, two cases were ended in acquittal and the remaining five cases were withdrawn on account of a compromise between the parties. It is further submitted that the revision petitioney'accused entered into a compromise with the 1"t respondent/complainant and the 1.t respondent/complainant fited a compromise pefition in CrI.R.C.M.P.No.4O27 of 2073 on 70.i.2.2013, but the 1.t respondent/complainant has withtlrawn his consent for compromise after receiving Rs.3.00 lakhs through demand drafts. Therefore, pravetl to ajlorv the revision. In support of his contentions he relied upon the follon,ing juclgments:- 1. Basalingappa a, Mrdibasaytptat 2. Meters and Instntments piaate Linrited and others zt, Kanchan Mehta2 I (20l9) 5 SCC 418 '(20r8) I SCC 560

6 GSD..I Crlrc 4l 20l l Learned Assistant Public Prosecutor appearing for the 2"d responden t/ Sta te u,ould submit that the trial Court has rightlv found the revision petitiorler/ accused guilty of the offer"rce punishable untler Sectiorr 138 of the N.i. Act and the same was confirmed by the appellatc Court anc1, therefore, no interference is warranted. Today, before pronouncing the judgment, the learned Counsel for the 1"t respondent/complainant has appeared before this Court and submitted that both the Courts below rightly held that the 1"t respondent/complainant had established his case that the cheques were issued by the revision petitioner/ accused towards discharge of legally enforceable deht, which was affirmed by the appellate Court. He further subn-ritted that the reasoning assigned bv the Courts beiow in support of its findings in favour of the f i respondent/ cornpla irrant arrd against the revisiotr petitioner/ accused, is justified and that there is no reason to interfere with the concurrent findings of the Courts below and, therefore, prayed to dismiss the revision. A perusal of the material on record would show that in order to prove his case, the 1"t respondent/complainant has filed Exs.P1 to Pl2. The case of the 1* respondent/complainant

( k GSD, J Crlrc_41_201 3 is that he advanced a sum of Rs.32,00.000/_ to the revision petitioner/ accusecl between septr.mber, 2004 and November, 2004 and thereafter on 30.07.2005, the revision petitioner/ accused executecl a Mentorandum of Understanding, which was marked as Ex.p10. In order to discharge the said liability in pafi, the revision petitioner/accused issued the impugned cheques. The defence of the revision petitioner is that the 1st respondent has not advanced any amount to him and that the disputed cheques were obtained from him forcibly and that the revision peti tioner/ accused has lodgecl a complaint in Humayun Nagar Police Station, Hyderabad. The recortl also reveals tlrat during the cross_exa minatioit, the 1st respondent/complainant har.1 aclmittecj that the revision peti tioner/ accused lodgecl a report against him and one Abid Bhai in Crime No.353 of 2005 of Humayun Nagar police Statiory for the offences punishable under Sections 342,347 and 506 of I.P.C. as they forcibly taken his signatures on twenty cheque leaves bearing Nos.247161 to 2477g0, Memorandum of Understanding and other documents. The 1"r respondent/complainant has not been abre to show why the revision petiUon}/iccused has filed a complaint against him

8 GSD, J Crlrc 41 2013 with Humayun Nagar Police Statioo Hyderabad. So also, the 1* respondent/ complainant has failed to show the mode, the time and place of handing over of the amount of Rs.32,00,000/- that too in the i-car 2004. Further, the l't respondent/ complainant has failecl to produce any record to show his profit anci loss account and balance sheet and list of debtors pertaining to the year 2004 to support his case that he has lent a sum of Rs.32,00,000/- to the revision petitioner/ accused. In Basalingappa o. Muilibasappa (7 supra), the Apex Court held as under:- "We are of the view that when evidence was led before the Court to indicate that apart from loan of Rs.6.00 iakhs given to the accused, within two yeats, amount of Rs.18.00 lakhs have been given out by the complainant and his financial capacity being questioned, it was incumbent on the complainant to have explained his firrarrcial capacity. Court cannot insist on a person to lead negative evidence. The observation of the High Court that h ial Court's finc{ing that the cornplainant failed to prove his financial capacity of lending money is perverse cannot be supported. We fail to see that hon' the trial Court's findings can be termed as perverse by the High Court when it was based on consideration of the evidence, which was led on behalf of the defence." r

GSD, J Crlrc 4 I 2013 In the instant case also, the 1.t respondent/complainant has failed to produce any evidence to show that he is having financial capacity to lend such huge amount of Rs.3 2,00,000 / - to the revision petitioner/accused within a short span of three months time. Further, the record also reveals that apart from filing the present case against the revision petitioner/ accused in Hyderabacl, the 1't respondent/complainant has also filed seven cases of a similar nature in the Courts at Mumbai in connection with the alleged tlishonour of the above cheques arising out of the same transaction. Out of those seven cases, two cases were ended in acquittal and the remaining five cases were withdrawn on account of a compromise between the parties. That apar! in the present case, the revision petitioner/ accused entered into a compromise with the 1st respondent/complainant agreeing to pay a sum of Rs.3.00 lakhs to him in two equal instalments and as per the understanding, he paid a sum of Rs.1.50 lakhs by way of Demand Draft bearing No.014393 dated 23.09.2073 and that the 1,t respondent/complainant filetl a compromise petition on 10."12,2013. Thereafter, the revisior-r peti tioner/ trccusecl paicl a \\ sum of Rs.1.00 by way of Demand Draft bearing No.014530

l0 GSD. J Crlrc 41 2013 dated 17.12.2073 and a sum of Rs.50,000/ - by way of Demand Draft bearing No.014586 dated 15.02.2014 and that the said Demand Drafts were encashed by the 1"t respondent/complainant in his bank account in Indian Overseas Bank, Kalbadevi Branch, Mumbai. However, the 1"t respondent/complainant has lvithclrawn his consent for compromise after recciving Rs.3.00 lakhs frorn the r.evisiorr petitioner/ accused through the aforesaid Demand Drafts. For the aforesaid reasons and in view of the decision of the Apex Court referred to above and since the 1't respondent/complainant failed to establish his financial capacity/ the mode, time or place when he lent such a huge amount of Rs.32,00,000/- to the revision petitioner/accused, I am of the considered view that the finding recorded by the trial Court that the 1"t respondent/complainant had established that the cheques were issued towards discharge of legally enforceable debt, which was affirmed by the appellate Court, is suffered from iltegality and caused miscarriage of justice. Hence, the conviction and sentence of imprisonment imposed against the revision peti tiollcr/ accused for the offence punishable unrler Section 138 of the N.I. Act is liable to be sct aside. -/ t

lt To, GSD, J Crlrc 41 2013 Accordingly, the Criminal Revision Case is allowed. The conviction and sentence of imprisonment imposed by the trial Court as affirmed by the appellate Court for the offence punishable under Section 13g of the N.I. Act are hereby set aside and the revision petitioner/ accusecl is acquitted of the sair"1 charge. Fine/compensation amount, if any, paid by the revision petitioner/ accused shall be refuncled to him. The bail bonds of the revision petitioner/ acc used shall stand cancellecl. Miscellaneous petitions, if any, pending shall stand closed. SD/.CH.VEN KATESWARULU DEPUTY REGIS //TRUE COPY// SECTIO oFFICER 1. The lV Additional Metropolitan Sessions Judge, at Hyderabad (with record , if any ) 2. The XIV Additional Judge-cum-XVlll Additional Chief Metropolitan Magistrate at HYderabad. a. Two CCs to Public Prosecutor, High Cou( for the State of Telangana, at HYderabad [OUT] 4. one cc to SRI.CSHARAN REDDY Advocate [oPUC] 5. One CC to SRl. P PREM RAJ Advocate IOPUC] 0. One CCs to Superintendent Central Jail Chanchalguda' at Hyderabad' 7. Two CD Copies 8. One Spare CoPY CDL MMA I 4- t--

HIGH COURT DATED:1 510212022 ORDER CRLRC.No.41 of 2013 ALLOWING THE CRL.R.C 5iAr E O ,i) .t''e ts il :. .,, $[q 1$1 f'! ) lb