Loading judgment…
No AI summary yet for this case.
- 1 -
CRL.A No. 495 of 2012
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF DECEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE S RACHAIAH CRIMINAL APPEAL NO. 495 OF 2012 (A) BETWEEN:
SRI M K SESHADRI AGED ABOUT 35 YEARS SON OF LATE M KRISHNAPPA RESIDING AT NO.40(OLD NO. 46) ‘SRI BANASHANKARI NIVAS’ 8TH CROSS, S.P. EXTENTION MALLESWARAM BANAGLORE – 560 003. …APPELLANT
(BY SRI. M K VENKATRAMANA, ADVOCATE)
AND:
SRI M RAMESH AGED ABOUT 43 YEARS SON OF MUNIYAPPA PRESENTLY RESIDING AT 2351, ‘S.V.NILAYA’ 16TH MAIN ‘B’ CROSS H A L SECOND STAGE INDIRANAGAR BANGALORE – 560 008. …RESPONDENT
(BY SRI. P PRASAD, ADVOCATE)
THIS CRL.A IS FILED U/S.378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT/ORDER OF ACQUITTAL DATED 09.03.2012 PASSED IN C.C.NO.25491/2009 BY THE 13TH A.C.M.M, BANGALORE ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I ACT. THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED ON 13.09.2023, BEFORE THE PRINCIPAL BENCH AT BENGALURU BENCH, COMING ON FOR PRONOUNCEMENT OF JUDGMENT, BEFORE THE DHARWAD BENCH, THROUGH VIDEO CONFERENCING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
- 2 -
CRL.A No. 495 of 2012
JUDGMENT 1. This Criminal appeal is filed by the complainant/ appellant being aggrieved by the judgment of acquittal dated 09.03.2012 in CC No.25491/2009 on the file of the XIII Additional Chief Metropolitan Magistrate at Bangalore wherein the Trial Court acquitted the respondent herein for the offence punishable under Section 138 of the Negotiable Instruments Act (for short ‘N.I. Act’).
For the sake of convenience, the rank of the parties would be henceforth referred to as per their rankings before the Trial Court.
Brief facts of the case: The accused and complainant were good friends and they knew each other for several years. On 02.12.2008, the accused was in need of money and approached the complainant and requested the complainant to finance him in order to develop his business. The complainant has paid cash of Rs.5,00,000/- as requested by the accused. The accused had assured him that he would repay the amount within three months and also executed On Demand Promissory Note and also consideration of the receipt for having received the
- 3 -
CRL.A No. 495 of 2012
amount. The complainant demanded the accused to repay the amount on 05.08.2009. Then, the accused had issued a cheque dated 05.08.2009 for a sum of Rs.5,00,000/-. When it was presented for encashment, the complainant has received an endorsement from the bank that the cheque got dishonored for want of sufficient funds. The complainant has received the intimation on 13.08.2009. The accused was intimated the said fact through legal notice dated 20.08.2009. The notice sent to the official address of the accused is served on 21.08.2009. However, the notice sent to the residential address was returned as ‘not claimed’ by the addressee. The accused after having received the notice neither replied nor repaid the amount. Hence, the complainant has filed a complaint before the jurisdictional magistrate having jurisdiction.
To prove the case of the complainant, the examined himself as PW.1 and got marked 9 documents as Exs.P1 to P9 and also on the other hand, the accused has been examined himself as DW.1 and no documents have been marked on his behalf. The Trial Court after considering oral and documentary evidence on record, recorded the acquittal for the offence punishable under Section 138 of Negotiable Instrument Act.
- 4 -
CRL.A No. 495 of 2012
Heard Sri M.K.Venkataramana, learned counsel for the appellant and Sri.P.Prasad, learned counsel for the respondent.
It is the submission of the learned counsel for the appellant-complainant that the findings of the Trial Court in recording the acquittal is perverse, illegal and opposed to the facts and circumstances of the case. Hence, the judgment and order of acquittal is required to be set aside.
It is further submitted that even though the accused has not issued reply notice and admitted the signature and cheque, the Trial Court failed to raise the presumption and also failed to take note of the well settled principle of law that the accused has to rebut the presumption and recorded the acquittal stating that the complainant has to prove the case in respect of legally enforceable debt or liability which is against the settled principle of law. Therefore, the same is liable to be set aside. Making such submission, the learned counsel for the complainant/appellant prays to allow the appeal.
Per contra, the learned counsel for the respondent vehemently justified the judgment and order of acquittal passed by the Trial Court and submitted that the accused has
- 5 -
CRL.A No. 495 of 2012
not received any notice and notice has not been sent to the proper address. It is further submitted that the complainant has not established that the accused is liable to be paid. The Trial Court after appreciating the oral and documentary evidence on record, recorded the acquittal which is relevant and proper and there is no occasion for this Court to interfere with the findings of the Trial Court. Making such submission, the learned counsel for the respondent prays to dismiss the appeal.
Having heard the learned counsel for the respective parties and also perused the findings of the Trial Court, the points which would arise for my consideration are:- i) Whether the judgment and order of acquittal passed by the Trial Court for the offence under Section 138 of N.I Act is justifiable? ii) Whether the appellant has made out grounds to interfere with the judgment of acquittal passed by the Trial Court?
This Court being the First Appellate Court in order to re-appreciate the facts and law in respect of the Negotiable Instruments Act, it is necessary to have a look upon the
- 6 -
CRL.A No. 495 of 2012
evidence of both PW.1 and DW.1 and the records which they had relied upon. However, in a case of appeal against acquittal it is to be noted here that the scope of interference is not as a matter of routine. The Court has to interfere only where the findings of the Trial Court in recording the acquittal appears to be perverse and illegal.
Having considered the settled principle of law, now it is relevant to refer to the judgment of Hon’ble Supreme Court in the case of Kishan Rao Vs. Shankar Gouda1, paragraph Nos. 18 to 22 which read as under: “18. Section 139 of the 1881 Act provides for drawing the presumption in favour of holder. Section 139 is to the following effect: “139. Presumption in favour of holder.—It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.” 19. This Court in Kumar Exports v. Sharma Carpets [Kumar Exports v. Sharma Carpets,
(2009) 2 SCC 513 : (2009) 1 SCC (Civ) 629 :
(2009) 1 SCC (Cri) 823] , had considered the
1 2018 (8) SCC 165
- 7 -
CRL.A No. 495 of 2012
provisions of the Negotiable Instruments Act as well the Evidence Act. Referring to Section 139, this Court laid down the following in paras 14, 15, 18 and 19: (SCC pp. 519-20) “14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. 15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) “may presume” (rebuttable), (2) “shall presume” (rebuttable), and (3) “conclusive presumptions” (irrebuttable). The term “presumption” is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the “presumed fact” drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or
- 8 -
CRL.A No. 495 of 2012
admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means “taking as true without examination or proof”. *** 18. Applying the definition of the word “proved” in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a
- 9 -
CRL.A No. 495 of 2012
prima facie case for a party for whose benefit it exists. 19. The use of the phrase “until the contrary is proved” in Section 118 of the Act and use of the words “unless the contrary is proved” in Section 139 of the Act read with definitions of “may presume” and “shall presume” as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.” 20. This Court held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. The following was held in para 20: (Sharma Carpets case [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 : (2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823] , SCC p. 520) “20. … The accused may adduce direct evidence to prove that the note in
- 10 -
CRL.A No. 495 of 2012
question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. …” 21. In the present case, the trial court as well as the appellate court having found that cheque contained the signatures of the
- 11 -
CRL.A No. 495 of 2012
accused and it was given to the appellant to present in the Bank, the presumption under Section 139 was rightly raised which was not rebutted by the accused. The accused had not led any evidence to rebut the aforesaid presumption. The accused even did not come in the witness box to support his case. In the reply to the notice which was given by the appellant, the accused took the defence that the cheque was stolen by the appellant. The said defence was rejected by the trial court after considering the evidence on record with regard to which no contrary view has also been expressed by the High Court. 22. Another judgment which needs to be looked into is Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] . A three-Judge Bench of this Court had occasion to examine the presumption under Section 139 of the 1881 Act. This Court in the aforesaid case has held that in the event the accused is able to raise a probable defence which creates doubt with regard to the existence of a debt or liability, the presumption may fail. Following was laid down in paras 26 and 27: (SCC pp. 453-54) “26. In light of these extracts, we are in agreement with the respondent
- 12 -
CRL.A No. 495 of 2012
claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] , may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable
- 13 -
CRL.A No. 495 of 2012
presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard of proof.”
On careful reading of the above said dictum of the Hon’ble Supreme Court, it makes it clear that Section 139 of the N.I. Act provides for a drawing the presumption in favour of the holder of the cheque. It shall be presumed unless the contrary is proved that the holder of the cheque of nature referred to in Section 138 of the N.I. Act for the discharge in whole or in part, of any debt or other liability. It is further added that the initial burden lies on the accused to rebut the presumption once the ingredients of Section 138 of N.I. Act is established by the complainant.
- 14 -
CRL.A No. 495 of 2012
In the present case, the accused has raised two main grounds, one is, no notice has been served in respect of dishonor of cheque and second one is, he has not borrowed any loan from the complainant. Now, let us consider regarding service of notice.
As per the averments of the complaint, the complainant has issued a legal notice on 20.08.2009 through under certificate of posting and also registered post acknowledgement due. The notice sent through registered post to the address of company of the accused served on 21.08.2009. However, the notice sent to the residential address has been returned as unserved with a postal endorsement dated 04.07.2008 as ‘not claimed’. In the evidence of DW1, except denial in respect of notice, the accused has not produced any documents to show that he was not residing in the address to which the notice was sent.
In his evidence, DW1 further stated that the Court summons was received by him at the instance of jurisdictional police. It is also further admitted in his evidence that the complainant had informed him regarding the dishonour of the cheque by calling to his mobile. When these two admissions of
- 15 -
CRL.A No. 495 of 2012
DW1 in respect of notice are admissible in nature, the contention in respect of he has not received notice regarding dishonour of cheque would not survive.
As regards, the legally enforceable debt or liability is concerned, it is a well settled principle of law that once the ingredient of Section 138 of N.I Act is proved, the Court has to raise the presumption mandatorily in respect of liability. The initial burden lies on the accused to discharge the presumption. The accused has denied the signature found on Exs.P1 and P2. However, he has admitted the signature on the cheque which is marked as Ex.P3. The accused in the cross-examination of PW.1 tried to elicit that the complainant had no financial capacity to lend amount of Rs.5,00,000/- to him. Though the accused has put several questions in the cross-examination in respect of income tax returns and also non examination of the persons whom the complainant has received the amount to lend the accused etc., however, the accused has failed to establish how the cheque in dispute was issued to the complainant. It is needless to say that mere denial of the transaction is not sufficient to rebut the presumption.
- 16 -
CRL.A No. 495 of 2012
The complainant in the cross-examination of DW.1 has elicited that, the accused had borrowed loan from various persons and those persons have filed similar cases against him. Though the complainant has established that the accused was in the habit of borrowing loan and also in the habit of issuing the cheques without maintaining the sufficient amount in his Bank Account and committed similar offences, the Trial Court failed to take note of the same and recorded the acquittal on the ground that the complainant has failed to establish the lending capacity appears to be erroneous and not proper. Therefore, the findings of the Trial Court is required to be set aside.
In the light of the observation made above, the points which arose for my consideration are answered as under:-
Point No.(i) in the ‘Negative’
Point No.(ii) in the ‘Affirmative’. 19. Hence, I proceed to pass the following:- ORDER i) The appeal is allowed.
- 17 -
CRL.A No. 495 of 2012
ii) The judgment and order of acquittal dated 09.03.2012 passed in C.C No.25491/2009 by XIII Additional Chief Metropolitan Magistrate at Bangalore is set aside. iii) The respondent /accused is convicted for the offence under Section 138 of N.I. Act and he is sentenced to pay a fine of Rs.6,00,000/- (Rupees Six lakhs only). In default of payment of fine, he shall undergo simple imprisonment for one year. iv) On deposit of the said fine amount, the Trial Court is directed to pay compensation to the complainant a sum of Rs.5,90,000/- (Rupees Five lakhs ninety thousand only) in terms of Section 357-A of Cr.P.C. and the balance of Rs.10,000/- (Rupees Ten thousand only) is to be adjusted to the exchequer of the State.
The Registry is directed to send the Trial Court record along with the copy of the judgment for its execution as per law.
Sd/- JUDGE
Vmb/UN/bss