Karnataka High Court
M/S Raghoji Finance And Leasing ... vs Shri Parmeshwar S/O Bhimrao Marab on 24 September, 2020
Author: Hanchate Sanjeevkumar
Bench: Hanchate Sanjeevkumar
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 24TH DAY OF SEPTEMBER, 2020
BEFORE
THE HON'BLE MR.JUSTICE HANCHATE SANJEEVKUMAR
CRIMINAL APPEAL NO.3667/2012
Between:
M/s Raghoji Finance and Leasing
Represented by its
Recovery Officer,
Manoshri Complex,
Humnabad Road, Gulbarga.
... Appellant
(By Sri R.S.Patil and
Sri Anil Kumar, Advocates - absent)
And:
Shri Parmeshwar
S/o Bhimrao Marab,
R/o H.No.8-1007, Ayyarwadi,
Gulbarga.
[Note : Sri Ganesh Naik, Advocate is appointed as Amicus
Curiae to assist the court]
... Respondent
(Notice served, unrepresented)
This Criminal Appeal is filed under 378(4) of Code of
Criminal Procedure praying to set aside the judgment order
in C.C.No.4066/2010 dated 05.09.2012 passed by the
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II Addl. Civil Judge and JMFC at Gulbarga vide Annexure-A
and convict the accused under Section 138 of N.I.Act and
direct the accused to pay the cheque amount.
This appeal coming on for hearing this day, the Court
delivered the following:
JUDGMENT
The present criminal appeal is preferred under Section 378(4) of Cr.P.C., challenging the judgment of acquittal in Criminal Case No.4066/2010 dated 05.09.2012, passed by the Court of the II Addl. Civil Judge and JMFC at Gulbarga (hereinafter referred to as 'learned Magistrate' for brevity).
2. The appellant/complainant has preferred the present appeal against the judgment of acquittal acquitting the respondent/accused for the offence under punishable under Section 138 of Negotiable Instruments Act (for short 'N.I.Act.').
3. The brief facts of the case are as follows ;- The appellant/complainant is running a Finance business and respondent/accused had approached the 3 complainant to avail cash discount loan of Rs.2,00,000/- and to that effect executed loan agreement on 04.07.2006 in favour of complainant and signed on the relevant documents. It is stated that due date for repayment of the said loan was fixed on 04.08.2006. It is stated that the respondent did not pay the loan within the stipulated period as per the agreement therefore respondent has become defaulter of loan and the complainant has given several reminders but did not take steps to make repayment of the loan. It is stated that there is due of Rs.48,057/- as per Ex.P.2 and when cheque was presented to the bank for encashment, the said cheque was returned with endorsement 'insufficient funds'. Therefore, after complying the legal formalities, the complainant had filed private complaint under Section 200 of Cr.P.C before the learned Magistrate and the learned Magistrate after recording the sworn statement of the complainant, taken cognizance and proceeded with the case and recorded evidence. 4
4. During the trial, the appellant/complainant himself is examined as PW.1 and got marked documentary evidences as Exs.P.1 to P.10. The respondent had not led any evidence both oral and documentary. The respondent before the learned Magistrate Court was represented through an Advocate and also cross-examined the complainant (PW.1). Therefore, the records show that the respondent/accused has participated in the proceedings.
5. After assessing and evaluating the evidences on record, the learned Magistrate has passed judgment of acquittal, acquitting the respondent for the offence punishable under Section 138 of the N.I.Act.
6. Being aggrieved by the judgment of acquittal the appellant/complainant had preferred the present appeal urging various grounds. The respondent has executed loan agreement on 04.07.2006 and as per the terms and conditions of the said loan agreement has paid instalments on different dates and the balance amount of 5 Rs.48,057/- was due and when it was demanded the respondent to repay the same, therefore, in this regard the respondent had issued cheque as per Ex.P.2 and it was dishonoured. Therefore, the complainant was constrained to prefer complaint before the learned Magistrate, but the learned Magistrate has wrongly acquitted the respondent. Further urged the ground that the respondent had repaid part of the loan amount as per Ex.P.10 and issued cheque with his signature. Therefore, when this being the admitted financial transaction between the appellant and the respondent and there is legally enforceable debt and towards discharge of the said legally enforceable debt, the Ex.P.2-cheque was issued but without considering all these evidences on record has wrongly acquitted the respondent. Therefore, prayed to set-aside the judgment of acquittal and to hold the respondent as guilty of the offence as alleged.
7. The appeal is of the year 2012, but when the appeal is taken up for final hearing the counsel for the 6 appellant remained absent for several days even though the appeal is listed repeatedly for final hearing. The notice issued to respondent is also served but he remained unrepresented in the case. Therefore, there is no representation from both the appellant as well as respondent side, but, the appeal is pending since, 2012 therefore, without left with any alternative way, this court has appointed learned Advocate Sri Ganesh Naik, as an Amicus Curiae in this case to assist the court to come to a proper conclusion, whether appellant makes out a case or the acquittal of the respondent is correct. Accordingly, Sri.Ganesh Naik, is appointed as Amicus Curiae in the present case to assist the court.
8. The learned Amicus Curiae submitted that the appellant is doing business of financial transaction and the respondent approached the appellant for loan and accordingly the appellant had advanced loan of Rs.2,00,000/- and at that time a loan agreement as per Ex.P.8 was executed. It is submitted that as per Ex.P.8 7 application for bill discount even though the loan is for a period of 30 days, but the clauses in Ex.P.8 stipulates, where the loanee fails to repay the loan amount on due date in full then the appellant is entitled for the belated interest at the rate of 16% per annum over the amount due under the loan account, other than secured loan amount. Therefore, submitted that the learned Magistrate has not taken into consideration this Ex.P.8 - application for bill discount and the conditions imposed on it and it was duly executed by the respondent but only considered the stray admission in the course of cross-examination that only the term of loan is for a period of 30 days, therefore the learned Amicus Curiae submitted that the learned Magistrate has lost sight this Ex.P.8 document and conditions enumerated therein. Further submitted that the respondent had executed a cash receipt for Rs.2,00,000/- for having received the loan amount of Rs.2,00,000/-. Further submitted that there is a repayment made by the respondent till 23.10.2007 by the 8 respondent and then the respondent had stopped the payment of the loan amount to the appellant and then upon an outstanding due amount of Rs.34,767/- and thereon at the rate of 16% of interest per year interest was imposed of Rs.10,636/- and outstanding loan amount was of Rs.48,057/- and accordingly Ex.P.2 is the cheque issued for Rs.48,057/-. When this being the fact there is a financial transaction and also Ex.P.8 is the agreement by the respondent as he has not denied the issuance of said cheque and therefore the said cheque is issued towards the discharge of legally enforceable dedbt. Therefore, the learned Amicus Curiae has drawn the attention of this court on these facts and evidences and on several legal aspects submitted that the appellant has proved the case that the respondent has committed the offence punishable under Section 138 of N.I.Act but humbly submitted that the observation made by the learned Magistrate are not correct.
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9. Further the leaned Amicus Curiae submitted that Ex.P.2 cheque might have been issued for security purpose while availing loan at that time execution of application for bill discount dated 04.07.2006 (Ex.P.8). Therefore, the learned Amicus Curiae fairly submitted that the cheque Ex.P.2 was issued might not be after due amount of Rs.48,057/-, but, before at the initial point of time while availing the loan from the appellant. Therefore, submitted that Ex.P.2 cheque was issued may be for the purpose of security to the loan transaction. Therefore, the learned Amicus Curiae on all these factual matrix and marshalling the evidences on record both oral and documentary evidences assisted the court in a well manner in order to come to a right conclusion by the court.
10. Upon considering the evidences on record and the observations made by the learned Magistrate in acquitting the respondent that the learned Magistrate has acquitted the respondent on two grounds, one is by 10 observing that the PW.1 in his cross-examination had admitted that the period of loan was for a period of 30 days and the cheque was issued as a matter of security and even though the amount due was formed on 23.10.2007, but belatedly after three years on 21.09.2010 the appellant had presented the cheque. Therefore, by observing that the appellant had slept over his cause for three years and therefore on all these observations dismissed the complaint and acquitted the respondent.
11. Further the learned Magistrate observed that whether there is due amount then the Ex.P.2 cheque was issued towards discharge of legally enforceable debt therefore upon raising doubt in its mind had acquitted the respondent for the offence punishable under Section 138 of the N.I.Act. Perhaps the learned Magistrate developed doubt in his mind for the reason that the learned Magistrate has opined that Ex.P.2 cheque might have been issued for security purpose and therefore expressed doubts regarding whether the said cheque was issued 11 towards discharge of legally enforceable debt or not and all these grounds the learned Magistrate has acquitted the respondent for the alleged offence.
12. Upon marshalling the complaint averments, charges framed and evidences led both orally and documentary and the judgment of acquittal made by the learned Magistrate, the documentary evidences discloses that the respondent has approached the appellant for receiving loan of Rs.2,00,000/- from the appellant and accordingly had executed loan agreement and accordingly submitted an application for bill discount and it is submitted in the said application that the loan period is for 30 days from the date of 04.07.2006 with 16% of interest. There is no evidence on record from the respondent side to say that the respondent has not executed this application for bill discount of receipt of loan of Rs.2,00,000/- from the appellant. Furthermore, Ex.P.9 is the cash receipt executed by the respondent. There is no evidence on record to show that the respondent denied 12 the execution of the cash receipt. Therefore, from the record, it is borne out that the respondent had executed the above said document for receiving the loan amount of Rs.2,00,000/-.
13. Further upon considering the evidences on record much particularly documentary evidences Ex.P.10 which is the repayment made by the respondent towards discharge of loan amount and it shows that the respondent was repaying the loan instalments regularly till the date 23.07.2007 and as on 23.10.2007 the outstanding balance amount was Rs.34,767/-. Therefore, even though the agreement for the loan term was for a period of 30 days but the respondent continued to repay the loan amount till 23.07.2007 i.e., beyond 30 days and has become defaulter of Rs.34,767/- as on 23.10.2007 and therefore considering one of the stipulation between the appellant and the respondent in Ex.P.8 application for bill discount that, where the loanee fails to repay the amount on due date in full the appellant shall be entitled 13 for the belated interest at the rate of 16% per annum over the amount due under the loan account other than secured loan amount. Therefore, it is an agreement between the appellant and the respondent that in case the respondent fails to pay the entire loan amount within a period of 30 days along with 16% interest as agreed on it for 30 days, then if upon failure on the part of the respondent in making full payment of the loan amount over the due amount then the appellant is entitled 16% of interest per annum over the due under the loan amount and accordingly the appellant has calculated the interest at the rate of 16% from 23.10.2007, as it is borne out from Ex.P.10 financial transactions by repayment of loan. Therefore, it was calculated as on 20.09.2010 the respondent owed an amount of outstanding loan of Rs.48,057/-. Therefore, for this amount the appellant has filed complaint before the learned Magistrate by making use of the cheque- Ex.P.2. Even though the appellant had stated in his complaint as well as in his evidence that the 14 Ex.P.2 cheque was issued by the respondent when the amount of Rs.48,057/- was become due, but from the record, it is borne out that since there is no communication between the appellant and the respondent therefore, the appellant had used the cheque Ex.P.2, when it was given by the respondent for security purpose and accordingly filled up the said cheque for the outstanding due amount as above stated and presented to the bank and it was bounced. Therefore, from the record, it is borne out and it shall be construed that the cheque Ex.P.2 is inchoate negotiable instruments as per Section 20 of the N.I.Act. Therefore, inchoate negotiable instruments as per the provisions of the N.I.Act are also valid, as the drawer of the cheque authorised the payer to present after filling of the same provided, it must be a genuine demand. Therefore, when upon evidences are considered and appreciated in true and correct perspective manner even cheque Ex.P.2 was issued for the purpose of security purpose, but the provisions of offence under Section 138 15 of N.I.Act are applicable and are attracted. Therefore, the Ex.P.2 cheque even though it is to be construed inchoate negotiable instruments but reflection of the said amount on the cheque is the same as it was issued as per calculation made in Ex.P10 repayment of loan transactions. Therefore, the Ex.P.2 cheque is towards discharge of legally enforceable debt. Therefore, when this being the fact the respondent has availed loan of Rs.2,00,000/- from the appellant and repaid the some amount periodically as per the evidence discussed above and when there was balance amount of Rs.48,057/- as it was calculated as per the agreement Ex.P.8 and then the Ex.P.2 even though it is to be construed, has issued for security purpose but it is issued for discharging legally enforceable debt and therefore upon considering all thee evidences on record the appellant has proved the guilt against the respondent that the respondent had committed the offence as alleged.
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14. Therefore, in this regard the observations made by the learned Magistrate that the period of loan is only for a period of 30 days, then the cheque might have been issued for the purpose of security purpose then expressing its doubt whether there is any legally enforceable debt and then disbelieving the case of the appellant, is completely perverse and erroneous approach by the learned Magistrate. Therefore, I am of the opinion, thus in this way the learned Magistrate has swayed away without properly appreciating the evidences on record and the case on its value. Therefore, the judgment of acquittal passed by the learned Magistrate is liable to be set aside. As discussed above the appellant has proved that the respondent had received loan from the appellant and the respondent had executed the documents along with cash receipt having received the loan amount and then participated in transaction of making repayment of the loan amount in part and thus became due for some amount then as per the terms of the agreement Ex.P.8 the 17 appellant is entitled to charge 16% of interest per amount over the due amount and accordingly the respondent has maintained balance amount of Rs.48,057/- payable to the appellant and Ex.P.2 cheque issued for security purpose but is issued towards discharge of legally enforceable debt and also the said legally enforceable debt is proved.
15. When all these factors are proved, then presumption as per Section 118 of the N.I.Act for issuance of cheque and receipt of cheque as per Section 139 of N.I.Act are raised and it is proved that the issuance of cheque is towards existence of legally enforceable debt, then it is burden on the respondent to rebut the presumption. But the respondent has not rebutted the said presumption either attacking the case of the appellant in the cross-examination or leading himself evidence both oral or documentary. In this regard, the respondent has failed to rebut the presumption but on the other hand the appellant has proved the guilt against the respondent. Therefore, in this regard, the judgment of acquittal formed 18 by the learned Magistrate is liable to be set-aside accordingly, it is set aside. This criminal appeal is liable to be allowed holding the respondent is guilty of the offence punishable under Section 138 of the N.I.Act.
16. At this stage, I deeply appreciate the valuable assistance rendered by the learned Amicus Curiae in order to enable the court to make its opinion and coming to conclusion on the appeal. Therefore, I proceed to pass the following :
ORDER The appeal is hereby allowed.
The judgment of acquittal in Criminal Case No.4066/2010 dated 05.09.2012, passed by the Court of the II Addl. Civil Judge and JMFC at Gulbarga acquitting the respondent is hereby set-aside.
The respondent is held guilty of the offence punishable under Section 138 of the N.I.Act. 19
Accordingly, the order on sentence is passed directing the respondent to pay fine amount of Rs.60,000/- and out of which a sum of Rs.49,000/- is to be paid as compensation to the appellant and remaining amount would be remitted to the State. In case failure to pay the above stated fine amount, the respondent shall undergo simple imprisonment for a period of six months.
The Professional fee of the learned Amicus Curiae is fixed at Rs.10,000/- payable by the State within a period of three months from the date of receipt of the copy of the judgment and upon request made by the learned Amicus Curiae.
Registry is hereby directed to return the trial court records immediately.
The trial court is directed to secure the respondent to serve the sentence.
Sd/-
JUDGE sn