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Karnataka High Court

T R Srinivasaiah vs Chikkamagaluru District on 17 November, 2020

Equivalent citations: AIRONLINE 2020 KAR 2278, 2021 (1) AKR 560

                                      Crl.R.P.No.109/2017

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  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

   DATED THIS THE 17TH DAY OF NOVEMBER 2020

                      BEFORE

       THE HON'BLE MRS. JUSTICE K.S.MUDAGAL

  CRIMINAL REVISION PETITION NO.109/2017

BETWEEN:

T.R.SRINIVASAIAH
S/O K.RAMAKRISHNAIAH
AGED ABOUT 63 YEARS
R/AT NO.1110, JHANSI LAXMI BAI ROAD
VIDYARANYAPURAM
MYSORE - 08                               ...PETITIONER

(BY SRI.MANJUNATH R, ADVOCATE)

AND:

CHIKKAMAGALURU DISTRICT
CO-OPERATIVE CENTRAL BANK LTD.
CHIKKAMAGALURU
REP. BY ITS MANAGING DIRECTOR
R.G. ROAD, CHIKKAMAGALURU - 577 101       ...RESPONDENT

(BY SRI.M.S.RAGHAVENDRA PRASAD, HCGP)

      THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 R/W 401 OF CR.P.C. PRAYING TO SET ASIDE
THE FINAL ORDER DATED 24.02.2014 PASSED BY THE II
ADDITIONAL CIVIL JUDGE AND JMFC, CHIKKAMAGALURU IN
C.C.NO.2129/2012 AND ORDER DATED 22.10.2016 PASSED
BY THE PRINCIPAL DISTRICT AND SESSIONS JUDGE,
CHIKKAMAGALURU IN CRIMINAL APPEAL NO.43/2014.

      THIS CRIMINAL REVISION PETITION HAVING BEEN
HEARD AND RESERVED FOR ORDERS ON 9TH NOVEMBER
2020, COMING ON FOR PRONOUNCEMENT OF ORDER THIS
DAY, THE COURT THROUGH VIDEO CONFERENCE MADE THE
FOLLOWING:
                                                  Crl.R.P.No.109/2017

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                          ORDER

"Whether the impugned order of conviction and sentence passed against the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 ('the Act' for short) suffer illegality, impropriety or incorrectness?" is the question involved in this petition.

2. The respondent was a Co-operative Society registered under the Karnataka Cooperative Societies Act, 1959. The petitioner was working in the said society as cashier. He was terminated from service on the allegation of misappropriation of funds of the society.

3. Further the respondent initiated the proceedings against the petitioner in Dis.No.GRM DDS.1165/1996-97 before the Arbitrator, Chickmagalur for recovery of personal loan availed by him. In the said case, the Arbitrator passed the award dated 07.10.1997 against the petitioner for recovery of Rs.46,400/-. Crl.R.P.No.109/2017 3

4. The petitioner challenged the said award before Karnataka Appellate Tribunal, Bengaluru (Camp at Mysuru) ('the KAT' for short) in Appeal No. 649/1997. The KAT vide Ex.D1 the order dated 06.09.2020 partly allowed the said appeal. In the said proceedings the petitioner had contended that a sum of Rs.15,000/- deposited by him as security deposit was pending with the bank and the bank has not adjusted the said sum in the loan amount.

5. The KAT upheld the Arbitration Award with regard to availment of the loan by the petitioner. However, it was held that the bank shall adjust the security deposit pending with it towards the outstanding loan amount. Ex.D1 itself shows that the bank contended before the KAT that out of the security deposit, it has deducted Rs.3,000/- towards employees contribution of compulsory insurance and multiple proceedings were pending against the petitioner regarding several loans borrowed by him. Crl.R.P.No.109/2017 4

6. On such contentions, the KAT had not given any findings, but it was only observed that whatever part of the security deposit is pending, that shall be adjusted towards the liability of the petitioner.

7. The respondent presented the cheque Ex.P1 dated 19.04.2007 for a sum of Rs.25,000/- drawn on Bank of Baroda purportedly issued by the petitioner in favour of the respondent's bank for realization. Under Ex.P2, the Banker's memo dated 19.04.2007, the said cheque was dishonoured with endorsement "for want of sufficient funds".

8. The respondent issued notice as per Ex.P3 dated 27.04.2007 claiming that after adjusting the security deposit, loan balance of Rs.28,692/- was due as on 30.03.2000 and towards discharge of that debt, the petitioner had issued the cheque Ex.P1 without making arrangement for its payment. In the notice, the respondent further called upon the petitioner to pay the cheque amount within 15 days failing which to face the prosecution.

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9. The petitioner replied the said notice as per Ex.P5 dated 19.05.2007 denying his liability and alleging that cheque was obtained under coercion. He further claimed that the bank itself was due to him the subsistence allowance payable during the period of his suspension as awarded by the KAT in Appeal No.134/1998 under Ex.D2 dated 08.09.1998.

10. Since the demand under the notice was not complied, the respondent filed the complaint against the petitioner before the Additional Civil Judge (Junior Division) & J.M.F.C, Chickmagalur prosecuting him for the offence punishable under Section 138 of the Act. On taking cognizance, learned Magistrate registered the case in C.C.No.2129/2007, summoned the petitioner and tried him.

11. The trial Court rejecting the defence of the petitioner by the judgment and order dated 24.02.2014 convicted him for the offence punishable under Section 138 of the Act and sentenced him to pay fine of Rs.50,000/-. Out of the fine amount of Rs.50,000/-, the trial Court awarded a sum of Rs.45,000/- to the Crl.R.P.No.109/2017 6 respondent as compensation under Section 357(1) of Cr.P.C. The trial Court further held that in default to pay the fine amount, the petitioner shall undergo simple imprisonment for three months.

12. The petitioner challenged the said judgment and order before the Principal District & Sessions Judge, Chickmagaluru in Crl.A.No.43/2014. The first appellate Court on hearing the parties, by the impugned judgment and order dismissed the appeal and confirmed the order of conviction and sentence passed by the trial Court against the petitioner.

13. In the proceedings before the trial Court, the petitioner admitted that the cheque Ex.P1 pertains to his account and his signature on the same. He also admitted that the cheque was dishonoured "for want of sufficient funds". Further it was also admitted that he borrowed loan from the respondent-bank and he was removed from service of the respondent-bank on the charge of misappropriation.

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14. The defence of the petitioner before the trial Court was as follows:

(i) The bank obtained the cheque Ex.P1 under coercion;

(ii) The bank did not adjust the security deposit pending to his credit with it as per the order of KAT under Ex.D1;

(iii) The bank itself was liable to pay him the subsistence allowance as per Ex.D2, the order of the KAT; therefore, he was not liable to pay any amount to the bank.

15. The trial Court rejected the defence of the petitioner on the following grounds:

(i) The petitioner has not rebutted the presumption attached to the holder of the cheque as contemplated under Sections 118 and 139 of the Act;

(ii) The alleged story of coercion was not substantiated;

(iii) Ex.D3 the account extracts produced by the petitioner himself shows that the petitioner was due to the bank;

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(iv) Ex.P6 the Arbitration Award shows that the award amount was Rs.46,400/- with future interest at 17% per annum.

16. As already pointed out, the petitioner admitted that he had borrowed personal loan from the Bank. He further admitted that the cheque Ex.P1 pertains to his account and it bears his signature. Under such circumstances, as rightly pointed out by the Courts below, the respondent was entitled to the presumption under Sections 118 and 139 of the Act to the effect that the cheque was issued for consideration and towards discharge of debt or liability. Therefore, the burden was on the petitioner to discharge the said presumption.

17. Petitioner's first contention that the cheque was obtained under coercion by the bank and its employees was denied by PW.1 in his cross-examination as well as by cross-examining the petitioner. Except for the self serving testimony of the petitioner nothing was produced to show that he had initiated action against the bank alleging that the cheque was obtained under coercion. Thus, such defence remained unsubstantiated. Crl.R.P.No.109/2017 9 Therefore, both the Courts rejected the said defence. This Court does not find any perversity in that.

18. The next question was, whether there was any surplus amount in the alleged security deposit of the petitioner to adjust towards the loan due. Ex.D1 the order of the KAT in Appeal No.649/1997 itself shows that in the said proceedings, the petitioner himself claimed that the security deposit was Rs.15,000/-. The said order further shows that the petitioner himself submitted that out of that amount Rs.3,000/- was deducted as employees' share of contribution towards compulsory Insurance.

19. In Ex.D1 it was also observed that the petitioner has several borrowings. That order was passed in 2000 and cheque was issued in 2007. The petitioner did not adduce any evidence to show that after the order under Ex.D1 he called upon the respondent to adjust any specified amount towards loan account.

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20. As per Ex.P6 the Arbitrator's Award the sum due was Rs.45,035/- and petitioner was liable to pay that with interest accruing thereon. In the notice, the complainant claimed that the security deposit along with accrued interest was Rs.16,343/- and even after adjusting that, the amount due as on 30.03.2000 was Rs.28,692/-. The petitioner did not adduce any evidence to show that he had repaid the said sum of Rs.28,692/- and cleared the liability. Therefore, the Courts below rightly rejected the said contention.

21. So far as non payment of subsistence allowance awarded under order Ex.D2, the said order itself shows that the petitioner did not challenge the order of dismissal from service on the charge of misappropriation. The said order further shows that his period of suspension was from 03.12.1993 to 28.03.1995. The KAT awarded subsistence allowance at 50% for six months and 75% for 9 months 25 days. According to the complainant, the order was complied.

22. The order of the KAT was passed in September 1998. If that order was not complied, a Crl.R.P.No.109/2017 11 person of ordinary prudence would have taken action for recovery of the said amount within a reasonable time. Only after initiation of the proceedings under Section 138 of the Act, petitioner came up with the claim that the order under Ex.D2 was not complied. Therefore both the Courts rightly rejected the claim and held that the petitioner has failed to rebut the presumption under Section 139 of the Act that the cheque Ex.P1 was issued towards discharge of debt/liability.

By no stretch of imagination, it can be said that the trial Court and the first appellate Court have adopted a perverse approach in appreciation of the evidence and legal position.

Under the circumstances, this Court does not find any grounds to interfere with the impugned orders. Therefore, the petition is dismissed.

Sd/-

JUDGE akc