Karnataka High Court
M/S Shriram Transport Finance Co. Ltd vs Mr Joseph Jerald Miranda on 24 November, 2023
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NC: 2023:KHC:45914
CRL.A No. 1024 of 2013
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF NOVEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE G BASAVARAJA
CRIMINAL APPEAL NO. 1024 OF 2013 (A)
BETWEEN:
M/S SHRIRAM TRANSPORT FINANCE CO. LTD.
A PUBLIC LIMITED COMPANY
HAVING ITS REGISTERED OFFICE
AT NO.123, ANGAPPA NAICKEN STREET
CHENNAI
WITH ITS DIVISIONAL & BRANCH OFFICE
AT VIJAYASHREE ARCADE
OPP. PADAVU HIGH SCHOOL, NANTHOOR
MANGALORE-575 007
AND REPRESENTED BY ITS MANAGER (LEGAL)
MADHUSUDHAN.M.R.
S/O R.K.MANAVI, AGED ABOUT 48 YEARS.
...APPELLANT
(BY SRI. M J ALVA.,ADVOCATE)
AND:
Digitally signed by
SANDHYA S
Location: High MR JOSEPH JERALD MIRANDA
Court of S/O LATE LUZARUS MIRANDA
Karnataka
AGED ABOUT 58 YEARS,
KARKERA MAJAL HOUSE
PODU POST, BANTWAL TALUK, D.K.
...RESPONDENT
(BY SRI. M VINOD KUMAR.,ADVOCATE - ABSENT)
THIS CRL.A. IS FILED U/S.378(4) CR.P.C PRAYING TO
SET ASIDE THE IMPUGNED JUDGMENT OF ACQUITTAL DATED
29.07.2013 PASSED BY THE J.M.F.C.(IV COURT), MANGALORE
IN C.C.NO.4877/2008 ETC.
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NC: 2023:KHC:45914
CRL.A No. 1024 of 2013
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
The appellant/complainant has preferred this appeal against the judgment of acquittal dated 29.07.2013 passed in C.C.No.4877/2008 by the Court of the JMFC (IV Court), Mangalore (hereinafter referred to as 'Trial Court'.)
2. For the sake of convenience, the parties in this appeal are referred to as per their status and rank before the Appellate Court.
3. The brief facts of the complaint are that:
The accused entered into Hypothecation agreement and obtained the loan from the UTI bank and the complainant was guarantor in the said loan transaction in respect of the vehicle bearing registration No.KA-19-8495 and to discharge the due to the complainant in respect of the said transaction the accused issued a cheque drawn on his account maintained at Canara Bank, Farangipet branch bearing No.632161 dated 08.08.2005 for Rs.1,00,000/-.-3-
NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 The complainant had presented this cheque through Corporation Bank, Kankanady Branch, Mangalore, and subsequently received the bank intimation on 13.08.2005 that the said cheque returned dishonoured for the reason 'insufficient in the account of the accused'. The complainant caused to issue a demand notice dated 30.08.2005 to the accused by registered post to his address calling upon him to pay the amount covered by the cheque within fifteen days. The accused has received the notice on 12.09.2005 from postal authorities. In spite of said notice the accused failed to pay amount covered by the said cheque. The accused has committed the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'N.I. Act' for short).
4. After taking cognizance, the Trial Court has registered case in C.C.No.4877/2008 and summons was issued to the accused. In pursuance of summons, the accused appeared before the Trial Court and enlarge on bail. The substance of accusation was recorded and accused pleaded not guilty and claims to be tried.
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5. To prove the case of the complainant, Sri. K. Vasudev who is the Power of attorney holder of the complainant company examined as PW.1 and 11 documents were marked as Exs.P1 to P11. On closure of complainant's side evidence, statement under Section 313 was recorded and the accused has denied the evidence of PW.1 and adduced his evidence as DWs.1 to 4 and 1 document was got marked as Ex.D1 and other two documents are marked as Exs.C1 and C2 by confrontation.
On hearing the arguments, the Trial Court has acquitted the accused. Being aggrieved by this impugned judgment of acquittal, the complainant/appellant has preferred this appeal.
6. Learned counsel for the appellant submits that the Trial Court has not properly appreciated the evidence on record in accordance with law and facts. The Trial Court has failed to consider the provisions of Section 118 and 139 of N.I.Act and the learned Magistrate has gone for comparative statement of account at Ex.P11 which is an unnecessary exercise contrary to the statutory -5- NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 presumptions. The learned Magistrate has mechanically passed the impugned judgment without proper scrutiny of law. On all these grounds, he sought to allow the appeal.
7. To substantiate his arguments, the learned counsel for the appellant relied on the following decisions:
1) Usman Gani v/s Shriram Transport Finance Company Limited reported in AIRKARR 2020-1-
230.
2) K.S.Ranganatha v/s Vittal Shetty reported in 2022 (1) KCCR1 (SC).
3) M/s.TRL Krosaki Refractories Limited v/s M/s.SMS Asia Private Limited and Another reported in AIR 2022 SC 1315.
4) T.P.Murugan v/s Bojan reported in 2018 (8) SCC 469.
5) Rohithbhai Jivanlal Patel v/s State of Gujarath and Another reported in 2019 (5) SCJ
140.
6) T.Vasanthakumar v/s Vijayakumari reported in 2015 (8) SCC 378.
7) Sri.Yogesh Poojary v/s Sri.K.Shankara Bhat reported in ILR 2019 KAR 493.
8) Dashrathbhai Trikambhai Patel v/s Hitesh Mahendrabhai Patel and Another reported in (2023) 1 SCC 578.
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8. Learned counsel for respondent remained absent. Hence, the arguments on behalf of respondent is taken as nil.
9. Having heard the arguments of learned counsel for appellant and on perusal of entire evidence on record, the following points would arise for my consideration:
i. Whether the complainant has made out a ground to interfere with the judgment of acquittal passed by the appellate Court?
ii. What order?
10. My answer for the above points is as under:
Point No.1: in the negative;
Point No.2: as per final order Regarding Point No.1:
11. I have carefully examined the material placed before this Court.
The complainant has filed complaint under Section 138 of N.I.Act for dishonour of cheque of Rs.1,00,000/-
issued by the accused in favour of complainant.
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12. To prove the case of complainant, the complainant has produced the document i.e. cheque at Ex.P4 dated 08.08.2005 issued by the accused in favour of the complainant company for Rs.1,00,000/- and when the said cheque was presented for encashment by the complainant, the same was returned as per Ex.P5 on 11.08.2005. Thereafter, the complainant has issued the legal notice calling upon the accused to pay the cheque amount within fifteen days on 30.08.2005 and the same was returned with shara as 'door locked'. Hence, the complainant has lodged complaint against the accused for the commission of offence under Section 138 of N.I.Act on 24.11.2005. Along with the complaint, the complainant has filed application under Section 142(b) of N.I.Act to condone the delay in filing the complaint and the same came to be allowed by the Trial Court without issuing notice on the said application and thereafter, the Court has recorded the sworn statement and registered the case against the accused for the commission of offence under Section 138 of N.I.Act.
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13. A perusal of the material on record, it is crystal clear that the complainant has proved the essential ingredients of Section 138 of N.I.Act except as to legally recoverable debts. The Trial Court has held that complainant has failed to prove the existence of legally recoverable debt as explained under the provisions of Section 138 of N.I.Act. In this regard, a perusal of Ex.P9 i.e. the loan agreement dated 01.04.2004 reveals that this loan agreement is effected between UTI Bank Limited and Shriram Transport Finance Limited, Mangalore and Mr. Joseph Jearld Miranda (Borrower) and Mr. Abdul Samad (Gurantor). In view of this loan agreement, the accused has obtained the loan of Rs.2,80,000/- as per Ex.P10.
Ex.P10 is the details of the agreement reveals that the agreement dated 01.04.2004 and the last instalment date is 25.03.2007. During the course of argument, the learned counsel for appellant submits that the accused has paid an amount of Rs.22,001/- as shown in Ex.P10 and the complainant has already seized vehicle in question and the same was sold for Rs.2,60,000/-. The sale process is -9- NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 also shown in the said Ex.P10. The complainant has not placed any material as to the sale proceeds of the vehicle in question and he has not disclosed that on which date the accused has issued this cheque and why the accused has issued the said cheque on 08.08.2005. In this regard, the Trial Court has elaborately discussed in this regard in para Nos.13 to 24 of the Impugned Judgment which reads as under:
"13. Keeping in view the oral evidence of both parties now I bestowed my serious attention towards the documentary evidence adduced by the complainant. The complainant company is heavily relied on EXP9 agreement and EXP10 statement of account to establish its case. I have carefully scrutinized EXP9 agreement and schedule annexed to this ExP9. A perusal of this EXP9 it would indicate that finance amount is Rs 2,80,000/- and number of installments is 36. As per this EXP9 the agreement value is Rs 4,10,716/-, and last payment due on 25-3-2007. At this juncture it opt to refer EXP10.EXP10 is the statement of account of the accused. The complainant is heavily relied on this EXP10. Admitedly EXP10 is dated 25-5-2005. In this EXP10 the agreement Value is shown as Rs 4,10,716/.advanced amount is 2,80,000/-. Which is in dispute. According to the complainant as reflected in this EXP10 the total amount collected by the accused in cluing sale proceeds,
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NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 insurance charges and instalments total comes to Rs 2,98,601/-. According to the complainant company the accused had issued cheque on 8-08-2005 that is after one year and three months of the loan transaction. The cheque date is 8-08-2005 and the date of loan agreement is 01-04-2004. If these dates are taken into consideration it has to presumed that the accused had issued cheque after nearly one year three months of the agreement.
14. The date of cheque is 8-8-2005. The Only question for consideration before this court is that whether the complainant company has established that the accused was liable to pay the cheque amount to the complainant company as on the date of cheque?. As I have already noticed the loan amount was Rs 2,80,000/- and the sale proceeds of the vehicle is Rs.2,60,000/- as admitted by PW1. The cheque amount is Rs.100,000/-. As I have already noted the total amount collected by the accused including sale proceeds of the vehicle, installments and insurance amount is of Rs 2,98,601/-. It is significant to note that if this amount of Rs 2,98,601/- and the cheque amount is taken together it comes to Rs.3,98,601/-. As per EXP10 the amount of Rs 2,98,601 including sale proceeds of the vehicle, installments and insurance amount was collected from the accused before 25-05-2005 it self. Under the circumstance now the compliant has to establish that as on the date of the cheque accused was liable to pay an amount of 3,98,601/-. It is beneficial to note here that according to the complainant and as per the documentary evidence
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NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 produced by the compliant, the liability of the accused to the extent of agreement value of Rs 413,722/- arises only after completion of agreement period ie 25-3-2007, but not before that.
15. I have once again carefully scanned this EXP10 statement of account of the accused. In this EXP10 at calum "C", It is mentioned as Future principle amount of Rs 1,17,116/-. What is that future principle amount has not been explained from the complainant. Now even if it is assumed for while that the accused had issued EXP4 cheque on the date mentioned there in, whether the liability arises against the accused for the amount mentioned therein the cheque is to be looked in to which is the only crucial point to be consider in this case. Considering the materials on record I am of the view that the compliant can not claim the agreement value ie 4,13,722/- before completion of agreement period ie 25-3-2007. This is serious lacuna in the case of the complainant company. This is vital defect in the case of the complainant company which is badly damages credibility of the case of the complainant. At this juncture an observation made by the learned author S.Krishnamurthy Iyyar in commentary Law Relating to Negotiable Instruments Act volume 2012, 11th edition at page 847 is quite material. The learned author observed thus,-
A plain reading of section 139 goes to show that the presumption created by it is a rebut table. The preemption may be get displaced by the persecution evidence on record itself, or the
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NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 accused may choose to lead independent evidence in rebuttal thereof. If the circumstances of suspect character emerges proved from the persecution case, they are sufficient to displace the presumption available to the complainant under section 139 of Negotiable Instruments Act. Once the presumption get dislodged by such suspicious circumstances borne out by the persecution evidence, then the burden would lie on the complainant to prove by independent positive evidence the most material fact of existence of debt or other liability against the accused drawer of the cheque in respect of that particular cheque amount.
16. The observation made by the learned author at page 534 in the above referred commentary is also quite relevant at this juncture.
The presumption under section 118 of Negotiable Instruments Act may be necessary be as to the amount specified in the promissory note itself. The presumption can be as to the existence of consideration as such, but not the quantum of consideration of it, and that is what is needed in law for giving effect to the consideration.
17. At this juncture I have also referred a decision reported in 2006 Cr.LJ 3140 In case of Shreyas Afro Servics Pvt Ltd V/s Chdndrakumar S B where in their lordship have held that The Supreme Court while interpreting the words " discharge of any debt or liability"
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NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 held that the liability of the guarantor would also come within the ambit of words " the other liability". In the instant case the issue is altogether different. The accused had issued a blank cheque not in respect of any current or ascertained liability but it was issued I respect of uncertain future liability. In such situation the provisions of Section 138 of the Act would not attract and if a cheque so issued is dishonoured, no offence u/s. 138 of the negotiable Instruments Act can be inferred.
18. The ration laid down in the above decision is amply applicable to the case on hand. In View of the ratio laid down in the above decision in the case on hand even if the accused had issued EXP4 cheque as on the date of the cheque no offence Under section 138 can be inferred. In the case on hand even if as per EXP10 the accused issued EXP4 cheque including future principle amount, it can not be said be issued for existing liability as on the date of cheque. It is well recognized principle of law that there is no presumption regarding the exact amount that is shown in the negotiable instruments. In the case at hand from EXP10 it self it is very clear that as on the date of the cheque ie 8-8-2005 there was no existence of liability of the accused to the extent of the amount mentioned there in at EXP10.
In view of the above principle of law it leads to infer that the complainant company has failed to establish that as on the date of the cheque the accused was liable to pay the amount mentioned in the cheque.
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19. The learned counsel for the accused relied on a decision reported in ILR 2009 KAR 1633 In case of Kumar Exports V/s Sharma Carpet. Wherein their lordship have held that accused has also an option to prove the non existence of consideration and debt or liability either by leading in evidence or in some clear and exceptional cases from the case set out by the complainant that is the averments in the compliant, the case set out in statuary notice and evidence adduced by the complainant during trial. In the cae at hand the accused has rebutted the case of the compliant by relying on the oral as well as documentary evidence adduced by the complainant.
20. The circumstances discussed above are badly damaging the prosecution case and they are sufficient to displace presumption available in favour of the complainant. It is clear that the material on record would clearly rebut the presumption under section 139 of Negotiable Instruments Act. Once the presumption is rebutted, the complainant company has to prove by independent evidence that the accused was liable to pay the amount mentioned in the cheque as on the date of cheque. Thus the facts and the circumstance discussed above leads to conclusion that defence raised by the accused that at the time of loan agreement compliant company had obtained the blank signed cheque as security is becomes probable. Therefore the contention of the complainant counsel that the accused failed to rebut the presumption under section 118 and 139 of Act has to be rejected outright.
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NC: 2023:KHC:45914 CRL.A No. 1024 of 2013
21. The learned counsel for the complainant has relied upon a decision reported in 2008 [2] Kar LJ 55 In case of Gowari Containers Bangalore V/s S C Shetty and another. Wherein their lordship have held that denying legitimate claims by magnifying unmerited technicalities would result in to injustice and may erode the faith of the people in rule of law. In the case at hand as have already noted that EXP10 it self show that thre was no liability of the accused to an extent of amount mentioned in the cheque case on the date of cheque in the case at hand the court not considered any technicality in the case of the compliant to disbelieve the case. Therefore with due respect to the above decision I am humble opinion that the above decision is not directly applicable to the case at hand as the fact and circumstance is distinguishable with the fact of the above case.
22. The learned counsel for the complainant has also relied on decision reported in 2007][3] Kar LJ 178 In case of Jayamma V Lingamma. Wherein their lordship have held that acquittal of accused ground of want of service of notice is unsustainable in law. In the case a hand the court not considered the other defence of the accused as regards service of notice. Therefore with due respect the above decision I am of the humble opinion that the above decision is no way helpful for the compliant in this case.
23. The learned counsel for the complainant has also relied on a decision reported in 2007][2] Kar LJ 131
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NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 In case of Ganesh enterprises Bangalore V/s DR Sarala. In the above case the accused was admitted the balance amount shown in running account as true and correct. but in the case at hand accused has no where admitted the alleged balance amount shown in EXP10. Therefore with due respect to the above decision I am humble opinion that the above decision is not directly applicable to the case at hand as the fact and circumstance of the above case is distinguishable with the fact of the present case.
24. To sum up I am of the considered opinion that as on the date of the cheque there was no existence of debt or liability of the accused to the extent of the amount mentioned in the cheque towards the complainant. On cumulative reading of entire mastriels on records I am of the view that the complainant has failed to prove that the accused has committed offence under section 138 of Negotiable Instruments Act. For the forgoing reasons I propose to answer point no 1 in the Negative."
14. On re-examination / re-consideration / re-appreciation of entire evidence on record, I do not find any legal infirmities or illegalities in the impugned judgment of acquittal passed by the appellate court.
Hence, I answer point No.1 in negative.
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NC: 2023:KHC:45914 CRL.A No. 1024 of 2013 Regarding Point No.2:
15. For the aforesaid reasons, I proceed to pass the following:
ORDER
1. Appeal dismissed.
2. The judgment dated 29.07.2013 passed in C.C.No.4877/2008 by the Court of the Court of the JMFC (IV Court) Mangalore is confirmed.
3. Registry is directed to send a copy of this judgment along with the records to the concerned Courts without any further delay.
Sd/-
JUDGE SSD List No.: 1 Sl No.: 14