Karnataka High Court
Deepa Finance Corporation vs A.K. Mohammed on 20 February, 2001
Equivalent citations: 2001(2)ALD(CRI)731, [2002]108COMPCAS636(KAR), 2001CRILJ3582, ILR2001KAR4310, 2001 AIR - KANT. H. C. R. 1888
Author: K.R. Prasada Rao
Bench: K.R. Prasada Rao
JUDGMENT K.R. Prasada Rao, J.
1. This appeal is filed by the appellant/complainant against the order of acquittal of the respondent/accused in respect of the offence under Section 138 of the Negotiable Instrument Act (for short the ' Act') by the impugned judgment dated 9.7.1997 in CC. 17411/89 on the file of the Court of Prl. Civil Judge and JMFC (Jr. Dn.), Mangalore.
2 Appellant filed a private complaint in the Trial Court alleging that the respondent borrowed loan amount of Rs. 20,000/- on 14.10.1986, Rs. 10,000/- on 22.10.1986, Rs. 10,000/- on 4.11.1986, Rs. 10,000/- on 20.11.1986, Rs. 10,000/- on 6.1.1987, Rs. 7,000/-on 3.2.1987, Rs. 8,500/- on 10.9.1987 from their firm by executing 'on demand pronotes', undertaking to repay the said loan amount jointly and severally. As the respondent did not pay the entire principal amount, the appellant made a demand for repayment of the loan amount and in that connection on 10.4.1989, respondent has issued 8 post-dated cheques for different amounts of Rs. 20,000/-, Rs. 10,000/-, Rs. 10,000, Rs. 10,000/-, Rs. 10,000/-, Rs. 7,000/-, Rs. 8,500/-, Rs. 1,500/-. When the appellant presented the above cheques on 8.5.1989 for collection from his Bank, all the cheques came to be dishonoured with an endorsement "Exceeds arrangement" as per the memorandum dated 8.5.1989 issued by the Vijaya Bank, Bunder Branch, Mangalore, to the respondent, where he held the account. Thereafter, appellant got issued a legal notice to the respondent through his Counsel, which was served on the respondent on 17.5.1989. In spite of service of the said notice, respondent has not paid the loan amount due by him. With these averments, appellant filed a complaint against the respondent in the Trial Court for an offence under Section 138 of the Act.
3. Respondent pleaded not guilty and claimed to be tried when the substance of the accusation was read over and explained to him by the learned Magistrate.
4. At the time of the trial, complainant examined himself as P.W.1 and got examined two witnesses as P.Ws. 2 and 3. who are Manager and Asst. Manager of the Vijaya Bank, Bunder Branch, Mangalore. 49 documents were got marked as Ems. P. 1 to P.49 on behalf of the complainant.
5. After closure of the evidence on the side of the complainant, respondent was examined under Section 313, Cr.P.C with reference to the incriminating circumstances appearing against him in the evidence of P.Ws. 1 to 3 by the learned Magistrate. He denied the said incriminating circumstances and claimed that evidence given by P.Ws. 1 to 3 is false. He has also filed his written statement in the Trial Court.
6. The Trial Court on appreciation of the evidence adduced by the complainant, came to the conclusion that the complainant failed to prove that the above referred 8 cheques were issued by the respondent and that they bear his signatures. Trial Court also found that no account number is mentioned in the said cheques and for this reason also, offence under Section 138 of the Act is not made out against the respondent. Trial Court has also taken a view that in respect of the same loan transaction, the appellant has filed a suit in O.S. 268/ 89 on the file of the Court of Prl. Civil Judge, Mangalore and obtained an order of attachment before judgment in respect of a sum of Rs. 1,65,532/- payable from the Department of P. W.D. to the respondent and, therefore, the alleged loan amount is not subsisting. The Trial Court therefore, came to the conclusion that the respondent is not guilty of the offence under Section 138 of the Act and acquitted him in respect of the said offences by the impugned judgment passed.
7. I have heard the arguments advanced by the learned Counsel for the appellant/ complainant and the learned Counsel for the respondent.
8. Learned Counsel for the appellant submitted that the Trial Court has erroneously accepted the defence taken that the cheques in question do not bear the signatures of the respondent, overlooking the fact that respondent himself admitted in his written statement filed in the suit O.S. 268/89, that the complainant has taken blank cheques containing his signatures in respect of the loan transaction. It is further pointed out by him that the view taken by the Trial Court that loan amount is not subsisting merely because the appellant obtained an order of attachment before judgment in respect of the amount payable by the Department of PWD to the respondent is erroneous when the said amount has not been realised. It is further submitted by him that the Trial Court has also taken an erroneous view that the cheques in question do not bear any account number and for that reason, they cannot be considered as the cheques issued by the respondent on his account in favour of the appellant, though all the cheques bear the seal knowing that they are issued in respect of the O.D. account.
9. In reply to these submissions, learned Counsel for the respondent/accused submitted that appellant is not entitled to resort to the parallel proceedings for recovery of the same amount by obtaining a decree in Civil Court and taking steps to execute the said decree to realise the decree amount and at the same time, prosecuting the criminal proceedings against the respondent in respect of the same amount under the provisions of Section 138 of the Act. He further submitted that the cheques in question were not drawn on any numbered account maintained by the respondent in Vijaya Bank and no account number is mentioned in those cheques, though all the cheques bear the seal as 'O.D.', indicating that they are drawn on O.D. account, the O.D. account number is not mentioned in those cheques to identify these cheques as the cheques drawn on any particular account maintained by the respondent in Vijaya Bank. He, therefore, contended that no case is made out against the respondent under Section 138 of the Act. It is also pointed out by him that the Manager of Vijaya Bank, Bunder Branch, Mangalore City, who has been examined as P.W. 2, has clearly stated in his cross-examination that by 8.5.1989 the date on which the above cheques were drawn, O.D. account of the respondent was not in existence in the Bank and the said account has been closed and the amount outstanding in that account has been transferred to another account. He, therefore, submitted that the Trial Court was justified in holding that the respondent is not guilty of the offence under Section 138 of the Act.
10. I have carefully gone through the entire evidence placed on record and the documents produced by the appellant in support of this case. The appellant has produced the certified copy of the judgment in O.S. 268/89 on the file of the Court of Civil Judge, Mangalore, dated 2.1.1993, to show that in respect of the same loan transaction, the appellant has obtained a decree for a total amount of Rs. 1,12,794.10. It is, therefore, not open to the respondent to still contend that the cheques in question were not issued by him in respect of the loan taken by him from the appellant. The cheques in dispute were also produced and got marked in the above civil suit as Exs. P.17 to P.23. A specific issue No. 5 has been framed in the said suit on the contention taken by the present respondent even in that suit, that, blank cheques were taken from him after obtaining signatures on them by the appellant and the said Court answered the issue in the affirmative holding that the present respondent has issued those cheques by way of repayment of the loan amount taken by him and the said cheques were dishonoured. As rightly pointed out by the learned Counsel for the appellant, the present respondent has clearly admitted in the suit filed that the cheques in dispute bear his signatures. Having regard to all these facts, I agree with the contention of the learned Counsel for the appellant that the Trial Court erred in holding that the cheques in dispute do not bear signatures of the respondent and that the appellant managed to obtain those blank cheques from the Manager of the Bank as he was an ex-employee of Vijaya Bank.
11. On a careful perusal of the cheques in dispute issued by the respondent, it is found that no account number is mentioned in those cheques though they disclose that they are drawn on O.D. account. Further, it is found from the evidence of P.W.2 Manager of Vijaya Bank, Bunder Branch, Mangalore City, that the respondent had O.D. account in that branch bearing No. 3/85 and the said O.D. account was not in existence by 8.5.1989, the date on which all the above cheques were drawn by the respondent and the amount outstanding in the said account has been transferred to another account by closing the said account. He produced an extract of the said Account No. 3/85, which is marked as Ex. P.85 to prove this fact. From these facts, it is clear that the cheques were drawn on unnumbered O.D. account by the respondent and the said O.D. account was not in existence at that time. It is prerequisite of the offence under Section 138 of the Act, that the cheque drawn by a person must be on an account maintained by him with the Banker and if such a cheque has been dishonoured, the drawer of the said cheque will be liable for the said offence. Since in the instant case, it is found that the cheques in question were not drawn on any particular account maintained by the respondent in Vijaya Bank, Bunder Branch, Mangalore City and since it is further found that O.D. account of the respondent was not in existence in the said Bank by the date on which said cheques were drawn, I find that no case is made out against the respondent for the offence under Section 138 of the Act. Even assuming that non-mention of the O.D. account number in the cheques drawn by the respondent is not of any importance when he has mentioned that the cheques were drawn on O.D. account, since it is found that even that O.D. account was not maintained by the respondent in the above said Bank by the date on which the above cheques were drawn it is clear that the above cheques were not drawn on an account maintained by the respondent in the above Bank. Further, this is not a case where O.D. account maintained by the respondent in the above Bank has been closed by him subsequently after the date on which the said cheques were drawn by him with a intention to cheat the appellant and to prevent him from getting the amount realised. Since it is found that O.D. account was not in existence by the date on which the said cheques were drawn by the respondent, in my view, the provisions of Section 138 of the Act arc not attracted in the present case. Appellant has to blame himself for not taking care to get the account number mentioned in the cheques issued in this case by the respondent, at the time when the said cheques were drawn and in not verifying with the Bankers as to whether really the respondent had any O.D. account in the above said Bank by the date on which the cheques were drawn by him. In this view of the matter, I find that no case is made out against the respondent for the offence under Section 138 of the Act. Apart from this fact, it is also doubtful whether the appellant is entitled to prosecute the criminal proceedings under Section 138 of the Negotiable Instruments Act, when he has chosen to obtain a decree for the same loan amount in a Civil Court and when he is executing the said decree by attachment of the amount payable to the respondent from P. W.D. funds, though the appellant is entitled to contend that as long as the decree amount remained unrealized or unpaid, the cheques in question issued must be taken as the cheques issued for the loan amount due by the respondent. But, I agree with the contention of the learned Counsel for the appellant that the learned Magistrate was not correct in holding that by virtue of the order of the attachment obtained by the appellant before judgment in respect of the amount payable to the respondent by P.W.D. authority, it must be taken that the loan amount is not outstanding and the cause of action does not survive in favour of the appellant to prosecute the respondent for the offence under Section 138 of the Act. However, since it is found that the cheques in question have not been drawn by the respondent in respect of any particular account number maintained by him on the Vijaya Bank, Bunder Branch, Mangalore City, I find that no case is made out for the offence under Section 138 of the Act.
12. For all the above reasons, I find no grounds to interfere with the order of acquittal of the appellant passed by the Trial Court in respect of the offence under Section 138 of the Act by the impugned judgment.
13. This appeal is, therefore, dismissed.