Karnataka High Court
M/S Guru Finance Corporation (R) vs Sri S T Murthy on 21 December, 2018
Author: H.B.Prabhakara Sastry
Bench: H.B.Prabhakara Sastry
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF DECEMBER, 2018
BEFORE
THE HON'BLE Dr.JUSTICE H.B.PRABHAKARA SASTRY
CRIMINAL APPEAL No.661 OF 2010
BETWEEN:
M/s. Guru Finance
Corporation (R)
By its Managing Partner,
Sri. M.V. Prabhu,
S/o. M.Veerabhadraiah,
Aged about 48 years,
Residing at Kailash Complex,
Behind BDO Office,
Chitradurga Road,
Challakere Town,
Chitradurga Dist. ...Appellant
(By Sri. Harish N.R. Advocate for
Sri. B.M.Siddappa, Advocate)
AND:
Sri. S.T.Murthy
S/o. Thippeswamy,
Aged about 43 years,
Residing at New Challakere
Center, Mutton Market,
Challakere Town,
Chitradurga District. ...Respondent
(By Sri. Ismail M. Musbha, Advocate for
Sri. C.K.Raghavendra, Advocate)
Crl.A.No.661/2010
2
This Criminal Appeal is filed under Section 378(4) of
Cr.P.C. praying to set aside the judgment order
dated:14.05.2010 passed by the C.J. & JMFC, Challakere in
C.C.No.765/2007 - acquitting the respondent/accused for
the offence punishable under Section 138 of IPC.
This Criminal Appeal having been heard and reserved
for Judgment on 19.12.2018, this day the Court delivered the
following:
JUDGMENT
In the complaint filed by the present appellant under Section 200 of Code of Criminal Procedure, against the present respondent, for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as 'N.I.Act'), the learned Civil Judge and JMFC, Challakere, (hereinafter for brevity referred to as `trial Court'), in C.C.No.765/2007 pronounced the judgment of acquittal on 14.05.2010. It is against the said judgment of acquittal, the complainant has preferred this appeal. Crl.A.No.661/2010 3
2. The summary of the case of the complainant in the trial Court is that the complainant-Firm is a registered business Corporation doing money lending business under license. The accused used to oftenly take loan from it. In one such transaction, the accused borrowed loan of `7,39,000/- from the complainant on 07.04.2007 for his business necessities agreeing to repay the said amount on 07.07.2007. The accused also gave a cheque bearing No.619299 drawn of Canara Bank, Challakere Branch, for a sum of `7,39,000/- from the complainant on 07.07.2007 towards the discharge of his loan liability. When the said cheque was presented by the complainant for realisation, the same came to be returned from the bank with an endorsement "since account stands closed". The complainant caused a legal notice to the accused on 16.08.2007. Despite receipt of the same, the accused except sending an untenable reply did not meet the demand made in the notice, as Crl.A.No.661/2010 4 such, the complainant was constrained to file a complaint against the accused for the offence punishable under Section 138 of the N.I. Act.
3. To prove his case, the complainant got himself examined as PW-1, three witnesses were examined from the complainant's side as PWs.2 to 4 and got marked the documents from Exs.P-1 to Exs.P-16. The accused got himself examined as DW-1 and got marked the documents from Exs.D-1 to Exs.D-9.
4. After hearing both side, the trial Court by its impugned judgment dated 14.05.2010, acquitted the accused of the alleged offence. It is against the said judgment, the appellant has preferred this appeal.
5. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.
Crl.A.No.661/20105
6. Learned counsel for the complainant in his arguments submitted that it is not in dispute that the accused and the complainant were known to each other and the accused used to borrow loan, often from the complainant. It is in one such transaction, the loan in question was given to the accused. Since the accused had issued the cheque in question towards repayment of the said loan amount, the legal presumption formed in favour of the complainant has not been rebutted by the accused. He submitted that, however, the trial Court holding that there was no proof of legally enforceable debt, is an erroneous finding. He also submitted that since both the partners of the Firm have led their evidence as PWs.1 and 2 and the business is of the Firm, the finding of the trial Court that there was no authorization for the complainant to institute the complaint is also an erroneous finding. Crl.A.No.661/2010 6
7. Learned counsel for the respondent in his arguments submitted that the complainant has failed to establish that he had capacity to lend money. The document at Ex.D.6 which is a statement of account of the complainant-Firm, shows that his bank balance was meager. Learned counsel further submitted that the complainant-Firm being a business firm, lending such a huge amount without any documentation is highly unbelievable. He further submitted that the cheque at Ex.P-1 mentions a printed year upon it as " / /19 ", as such, the said cheque which is of the decade 1990, cannot be issued in the year 2007. Therefore, the defence of the accused that the cheque was given to the complainant as a security in the previous loan transaction holds good.
Crl.A.No.661/20107
8. The complainant in the case is M/s.Guru Finance Corporation (R). The complainant has stated that it is a registered partnership firm. In the cross- examination of PW.1, the witness has stated that generally a letter of authority is required to institute a case by a partnership firm, which was not to the knowledge of the complainant at that time. Further, PW.1 has also stated that at the time of institution of the complaint, the other partners i.e., his father has not given him any letter of authority. It is relying upon the said statement made by PW.1, it was argued by learned counsel for the respondent/accused that in the absence of any letter of authority, the complaint is not maintainable. It is not in dispute that the complainant- Firm is a registered partnership firm. It is also not the case of the accused that the partnership deed between the partners prohibits any one of the partner to institute a complaint for the offence punishable under Section Crl.A.No.661/2010 8 138 of the N.I. Act against a third person. According to Section 12 of the Indian Partnership Act, 1932, "subject to contract between the partners, every partner has a right to take part in the conduct of the business.
According to Section 2(a) of the same Act, an "act of a firm" means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm.
9. In the instant case, it is the contention of the complainant as well the evidence of PWs.1 and 2 that the business transaction in question is the business of the Firm, as such, it is an act of the Firm. Undisputedly, the partners of the said Firm are only PWs.1 and 2, who are the son and father, respectively. Apart from PW.1, the other partner i.e., PW.2 also got himself examined in the matter and stated that due to his age of 76 years and variations in his health since three years, all the Crl.A.No.661/2010 9 business of the Firm is being taken care of by his son i.e., PW.1-Sri. M.V. Prabhu and he has been authorised by him to carry on the business of the Firm. He has also specifically stated that he has no objection for his son to manage the financial transaction of the Firm, to file case in the Court and to look after the litigation/proceedings.
10. Thus, the said unrebutted evidence of PW.2, the other partner of complainant-Firm since shows that act of institution of the complaint against the accused is an act of a Firm carried on by other partner, who is the son, for which he is duly authorised by him, establishes that the act of the complainant-Firm, which is a registered partnership firm is an act of a Firm done by PW.1 with the consent of other partner i.e.,PW.2, as such, the argument of learned counsel for the accused that in the absence of specific letter of authority the complaint was not maintainable, is not acceptable. Crl.A.No.661/2010 10
11. According to the complainant, it is a financial Firm doing the business of lending money. The transaction in question is one such transaction which it has been doing in its normal course. In order to show that it is a financial firm and the business in question was one of its routine business, the complainant got produced certified copy of money lender licence at Ex.P- 7, certified copy of Form No.A at Ex.P-10, certified copy of Form No.C at Ex.P-11, Partnership Deed at Ex.P-12, Cash Book at Ex.P-13, loan ledger book at Ex.P-14 and copy of ledger at Ex.P.15. The said loan ledger book at Ex.p-14 shows an entry of loan amount of `7,39,000/- as outstanding in the name of the accused. Thus, the alleged bank statement of the said Firm produced by the accused as Ex.D-6, which shows that for the year 2007, the balance was too small and few hundred rupees only, Crl.A.No.661/2010 11 would not give an impression that the complainant-Firm had no money to lend.
On this point, learned counsel for the complainant submitted that the Complainant-Firm has got more than one business account and that the Firm being a financial Firm, would not keep the money idle in the bank account, but keeps it in rotation to earn more profit, also cannot be ignored.
12. More importantly, the contention that the complainant had no capacity to lend has not at all been taken by the accused either in his evidence as DW.1 or in the cross-examination of PW.1. Further, the said point was canvassed only in the argument. Still, in the absence of any evidence or material to show that the bank account at Ex.D-6 was the only bank account which the complainant-Firm had, and in the light of cash book and loan ledger book at Exs.P-13 and 14, it is Crl.A.No.661/2010 12 evident that in the year 2007, with respect to which Ex.D-6 pertains to, the complainant-Firm had lent money to other borrowers also and the same has been entered in their cash book at Ex.P-13, loan ledger book at Ex.P-14 and ledger book at Ex.P-15. Therefore, the contention of the accused that the complainant had no capacity to lend is also not acceptable.
13. According to the complainant, the cheque in question was issued to it by the accused towards the repayment of loan on 07.07.2007. The defence of the accused is that the said cheque was issued for security in a previous loan transaction, however, the same was misused by the complainant. In that connection, learned counsel for the accused canvassed his argument that the date portion of the cheque is printed in format as "..../..../19...". The date filled therein is "07/07/19 2007" (the underlined digits i.e.,19 is scratched off in Crl.A.No.661/2010 13 the cheque). With the said imprint of the date portion as "19", learned counsel submits that the cheque was of the decade 1990, as such, the same could not have been issued in the year 2007. In support of his argument, learned counsel for the accused has also relied upon the bank pass books said to be belonging to the accused, which are marked at Exs.D-1 to D-5.
14. The pass book at Exs.D1 to D.5 though mentions about several transactions, but nowhere they give an impression that the cheque in question was being issued in seriatim at any relevant point of time. In a similar case, in T. Vasanth Kumar Vs. Vijayakumari reported in {(2015)8 Supreme Court Cases 378}, the Hon'ble Apex Court was pleased to hold that, noticing the printed proforma, date on the cheque leaf as "...../..../199..." the High Court observing that it was hard to believe that a business transacting Crl.A.No.661/2010 14 party would give a cheque which is of the year 1990 in relation to the transaction in the year 2007, that by itself in the absence of any other evidence, cannot be conclusive of the fact that the cheque was issued in 1999.
15. The said principle squarely applies to the case on hand also. In the absence of any other material, merely because the proforma date on the cheque leaf shown the same to be of the decade 1990 by that itself it cannot be concluded that the cheque was issued in the said decade, but not the written date mentioned upon it. Further, it is also not the case of the accused that the cheque issued in 1990s cannot be used in the year 2007 by the customer.
16. Therefore, in the absence of any material to show that the cheque in question was issued by the Crl.A.No.661/2010 15 accused as a security in the previous transaction with the complainant, cannot be accepted. Consequently, the presumption existing in favour of the complainant under Section 139 of the N.I. Act about the existence of the legally enforceable debt is further crystallised by the evidence of PWs.1, 2 and by the documents at Exs.P-10 to P-15, which also includes cash book, loan ledger book and copy of the ledger. The said presumption could not be rebutted by the accused.
17. Consequently, the cheque in question has been dishonoured with the shara "since account stands closed" would not entitle the accused to claim that guilt against him for the offence punishable under Section 138 of the N.I. Act, has not been proved. Since the trial Court without appreciating the materials placed before it in its proper perspective, has erroneously held that the complainant has failed to prove his capacity to lend and Crl.A.No.661/2010 16 which finding has led the trial Court in pronouncing the judgment of acquittal, the same deserves to be set aside and has to be held that the complainant has proved beyond reasonable doubt that the accused has committed the offence punishable under Section 138 of the N.I. Act.
Accordingly, I proceed to pass the following order:
ORDER The Appeal stands allowed. The judgment of acquittal dated 14.05.2010, passed by the learned Civil Judge and JMFC, Challakere in C.C.No.765/2007 is set aside. The respondent/accused by name - Sri. S.T. Murthy S/o Thippeswamy, residing at New Challakere Center, Mutton Market, Challakere Town, Chitradurga District, is convicted for the offence punishable under Section 138 of N.I.Act.Crl.A.No.661/2010
17
To hear on the sentence and for pronouncement of order on sentence, call the matter at 2.30 p.m. Sd/-
JUDGE BMC Crl.A.No.661/2010 18 ORDER ON SENTENCE Heard the learned counsel from both side on sentence part.
While the learned counsel for the appellant/ complainant submits for awarding maximum sentence for the offence for which the respondent/accused is convicted, the learned counsel for the respondent/accused submitting that accused is a family holder and a respectable person in society, prays for taking a lenient view.
It is the sentencing policy that the sentence ordered should not be either exorbitant nor for name sake for the proven guilt. It must be proportionate to the guilt for which the accused is found guilty of.
Considering the facts and circumstances of the case, the accused is sentenced to pay a fine of `7,50,000/- (Rupees Seven Lakhs Fifty thousand only) within four weeks from today, and in case of default of Crl.A.No.661/2010 19 payment of fine, to undergo simple imprisonment for a period of one year. In case of payment of fine amount, a sum of `7,39,000/- (Rupees Seven Lakhs Thirty Nine Thousand) be paid to the complainant-Firm, M/s. Guru Finance Corporation (R), represented by its Managing Partner, Sri.M.V. Prabhu S/o M. Veerabhadraiah, and remaining sum of `11,000/- (Rupees Eleven Thousand only) be taken to the account of the State.
The Registry is directed to transmit a copy of this judgment to the trial Court forthwith, to enable it to proceed further in the matter for issuance of warrant of conviction, if necessary and proceed in accordance with law.
An entire copy of this judgment also be delivered to the respondent/accused, immediately free of cost.
Sd/-
JUDGE BMC