Karnataka High Court
Veerappa S/O Sayappa vs B.A. Chandramouli S/O B.G. Annaiah on 28 June, 2021
Author: Rajendra Badamikar
Bench: Rajendra Badamikar
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IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 28TH DAY OF JUNE, 2021
BEFORE
THE HON'BLE MR.JUSTICE RAJENDRA BADAMIKAR
CRIMINAL APPEAL NO. 200008/2016
BETWEEN:
VEERAPPA
S/O. SAYAPPA
AGE: 51 YEARS
OCC: BUSINESS
R/O. NARAYANAPUR AREA
GURUMITKAL TOWN
YADGIRI TALUK & DISTRICT
... APPELLANT
(BY SRI.J. AUGUSTIN, ADVOCATE)
AND:
B.A CHADRAMOULI
S/O. B.G. ANNAIAH
OCC: ENGINEER
R/O. # 81, SRI KUMAR SWAMY
TEMPLE ROAD (50 FEET ROAD)
MOUNT JOY EXTENSION,
HANUMANTH NAGAR
BENGALURU - 560 001.
... RESPONDENT
(BY SRI. SUNIL KUMAR P. BANGARI, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT
AND ORDER DATED 19.11.2015 PASSED IN C.C. NO. 427/2011
BY THE CIVIL JUDGE AND JMFC AT YADGIRI AND
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CONSEQUENTLY CONVICT THE RESPONDENT/ACCUSED AND
AWARD FINE AMOUNT.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 18.06.2021, COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT' THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
JUDGMENT
The appellant herein is the complainant before the Court of Civil Judge and JMFC at Yadgiri (hereinafter for short, referred to as 'trial Court') has filed this appeal under Section 378(4) of Cr.P.C. challenging the judgment of acquittal dated 19.11.2015 passed by the trial Court in C.C. No. 427/2011.
2. In order to avoid confusion, the parties herein are referred with their original ranks before the trial Court.
3. The brief facts leading to this case are that, the appellant/complainant has filed a complaint against the respondent/accused under Section 200 of Cr.P.C., alleging that the accused has committed an offence under Section 138 read with Section 141 of Negotiable Instruments Act, 1881 ( for short, 'N.I. Act'). The complainant contended 3 that, he and accused are good friends and they are doing business and during business transaction, the accused has on so many occasions, has taken hand loan from the complainant as and when required and returned. It is further alleged that, on one such occasion, i.e., on 10.01.2011, the accused obtained hand loan of Rs.12,15,000/- for the purpose of higher education of his daughter by name Dhatri, as she was studying in Germany and he promised the complainant to return the loan amount in six months. But, he failed to return the loan amount. After six months, when the complainant demanded to repay the loan amount, the accused started post-poning the matter on one or other pretext and finally the accused has issued a post-dated cheque bearing No.702891 for Rs.12,15,000/- mentioning the date as 12.07.2011, drawn on Canara Bank Branch, Hanumanthnagar Branch, Bangalore, pertaining to his account. Then the complainant has presented the said cheque on 12.07.2011 in the State Bank of Hyderabad, Gurumitkal Branch and the said cheque returned on 4 12.08.2011 with an endorsement "Funds Insufficient". Then the complainant made a demand for payment of cheque amount of Rs.12,15,000/- through Lawyer's notice dated 24.08.2011, which was sent by registered post. The accused did not comply the demand and hence, it is alleged that the complainant has filed a complaint under Section 138 of the N.I Act.
4. After registering the complaint, the learned Magistrate has recorded the sworn statement of the complainant and considering the material evidence placed before him, he has taken cognizance and issued process against the accused. In pursuance of the summons, accused has appeared before the learned Magistrate and was enlarged on bail. Then the prosecution papers were also furnished to the accused. The plea of the accused was recorded for the offence under Section 138 of the N.I. Act and accused pleaded not guilty. Then the complainant was got examined himself as PW.1 and placed reliance on five documents marked as Ex.P1 to Ex.P5. Thereafter, the statement of accused under Section 313 of Cr.P.C. was 5 recorded and the case of the accused was of total denial. The accused was also got examined himself as DW.1 and placed reliance on a document as per Ex.D1.
5. After hearing the parties on both sides, the learned Magistrate has framed the following points for consideration:-
i) Whether the complainant proves beyond all reasonable doubt that the accused has committed the offence punishable under Section 138 of N.I.Act ?
ii) What order?
6. Thereafter, the learned Magistrate after
appreciating the evidence led by the parties, vide his judgment dated 19.11.2015, answered Point No.1 in the negative and resultantly acquitted the accused/ respondent herein. Being aggrieved by this order of acquittal, the complainant has filed this appeal under Section 378(4) of Cr.P.C.6
7. Heard the learned counsel appearing for the appellant as well as the counsel for the respondent. Perused the records.
8. Learned counsel for the appellant/complainant argued that the respondent/accused has admitted issuance of cheque, his signature on the alleged cheque and all technicalities have been complied. However, the trial Court has acquitted the accused/respondent without properly appreciating the evidence. He contended that the trial Court has acquitted the accused only on the ground that the complainant has not established his capacity to pay such a huge amount as hand loan. But, it failed to consider Ex.D1, where there is a reference that, he has stood as surety for accused to the tune of Rs.30,00,000/- and if he had no capacity, his surety would not have been accepted by the Bank. He contended that Ex.D1 ie., the document produced by accused establish his financial capacity, as he is the guarantor to the accused and the signature on the cheque is not at all disputed. Hence, he contended that the documentary evidence (Ex.D1) 7 establish his capacity to advance the loan and sought for allowing the appeal by convicting the accused/respondent.
9. Per contra, learned counsel for the respondent/accused contended that, the alleged cheque was issued only for the purpose of development of the company and the complainant had monthly income of hardly Rs.20,000/- and as such question of he advancing a huge loan of Rs.12,15,000/- does not arise at all. He further argued that, he has made a contradictory statement regarding the date of issuance of cheque and though he claimed that the amount is also paid out of the sale proceeds of the land, no material is placed in this regard, except a bald assertion. Hence, he argued that, there is no legally recoverable debt and the presumption under Section 139 of the N.I. Act is rebutted by the accused/respondent and as such the burden was casted on the complainant to establish his financial capacity, which he has failed to do so. Hence, he argued that the judgment of acquittal is in accordance with law and sought for dismissal of the appeal.
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10. After having heard the arguments and perusing the records of the trial Court, in this appeal, the following point would arise for my consideration:
'Whether the judgment of the trial Court calls for any interference by this Court?" .
11. The complainant has asserted that, he has advanced the loan of Rs.12,15,000/- to the accused. According to him, loan was advanced on 10.01.20211. Further, the contention of the complainant is that, as the accused failed to repay the loan amount, he demanded the same and the accused has given a post-dated cheque. At the out-set, the complainant has not stated as to on which date, the cheque was handed- over to him. No doubt, the legal requirement of issuance of notice etc. have been complied. Further, the accused has not disputed the fact that the cheque belongs to him and bears his signature. As such, the presumption under Section 139 of the N.I. Act required to be drawn. However, it is not a conclusive presumption, but a rebuttable presumption. As per Section 139 of the N.I. 9 Act, the complainant being the holder of the cheque and signature on the cheque having not been denied by the accused, the presumption shall be drawn that, the cheque was issued for discharge of any debt or other legal liability. However, the accused can rebut the said presumption regarding non-existence of liability, but at the same time, the complainant (prosecution) is required to prove his case beyond all reasonable doubt. But at the same time, the accused is not required to rebut the presumption with the same standard of proof and he can rebut the presumption on the basis of preponderance of probability. That apart, the accused for rebutting presumption, need not to lead his own evidence and he can also rebut the presumption on the basis of the evidence placed by the complainant himself.
12. At this juncture, it is worth to note here a decision of the Hon'ble Apex Court in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde [(2008) 4 SCC 54], wherein it has been held that, for discharging the burden of proof placed on him by the Statute, the 10 accused need not examine himself and he may discharge the burden on the basis of the materials already brought on record. The Hon'ble Apex Court has further observed that the prosecution must prove the guilt of the accused beyond all reasonable doubt, whereas the standard of proof so far as to prove the defence on the part of the accused is on preponderance of probabilities. Always when the presumption is raised, the onus is on the accused to raise a probable defence for rebutting the presumption, as observed by the Hon'ble Apex Court in (2010) 11 SCC 441 (Rangappa Vs. Sri Mohan).
13. In the light of the above settled principles, now the evidence of the complainant is required to be assessed. In his examination chief, the complainant has reiterated the factual aspects as alleged in the complaint. Ex.P1 is the cheque and Ex.P2 is the endorsement issued by the Bank, while Ex.P3 is the postal receipt for having sent the notice by registered post. Ex.P4 is the postal acknowledgement and Ex.P5 is a copy of legal notice, relied upon by the complainant.
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14. In the cross-examination, the complainant claimed that, he is working in a Medical Store and his monthly salary is Rs.10,000/-. Further he claims that, he owns 5.00 acres of land and he lent three houses on rent and getting monthly income of Rs.10,000/-. If this version is taken into consideration, his monthly income is around Rs.20,000/-. He claimed that, he paid Rs.12,15,000/- to the accused/respondent from sale proceeds of his land. But, he has not produced any document to show that, he did own any land and for having sold it. He is unable to disclose the sale consideration of the land also. He also claimed that, he handed-over the sale consideration to other persons and after getting it from them, he handed-over it to the accused. He further claimed that, some amount is received by him from his sister, which he has used for advancing loan to accused. But, he did not examine his sister also. There is no document to show that, he possessed 5.00 acres of land and the said land was sold, even prior to alleged transaction.
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15. In the cross-examination, he admitted that, he is also a Director in the Solar System Company and he possessed 20% of sale. However, he claims that, though he was having 20% of shares, the accused has not given any profit from the Company till today and since he is a formal Director, as out of love and affection, he was adopted by accused as one of the Directors. He never said that, he has contributed for that Company, wherein he was working as a Director. Hence, cross-examination of PW.1/complainant discloses that, his monthly income is hardly Rs.20,000/- and it is hard to accept that, he could mobilise a huge amount of Rs.12,15,000/- for advancing loan, that too without any security. No evidence is placed before the Court to show that he was possessing land and he sold the land.
16. Learned counsel for the appellant/complainant has invited attention of the Court to Ex.D1, which is Education Loan Sanction Communication issued by State Bank of Mysore to accused, wherein the complainant's (Veerappa Pyati) name is shown as a guarantor at Sl. 13 No.4, as he having net means of Rs.30.05 lakhs. Hence, he argued that, when he was capable of giving guarantee to the tune of Rs.30,00,000/-, his financial position is required to be taken into consideration. But, the financial position for acting as guarantor is different from the financial capacity to advance loan in cash. Hence, Ex.D1 does not come to the aid of the complainant in any way.
17. The learned counsel for the appellant has placed reliance on a decision reported in AIR Online 2021 SC 82 (M/s.Kalamani Tex v.
P.Balasubramanian). But this is again in respect of reverse onus clause and therefore in the present case on hand, the respondent/accused by cross-examining the complainant has elicited that the complainant/appellant does not have financial capacity to advance the loan. When his financial status itself is not established and when the respondent/accused has rebutted the presumption by creating a dent in the case of prosecution the onus again shifts on the complainant/appellant to prove his financial status, but he has failed to discharge 14 that onus. As such, in view of the decisions as referred above, the principles enunciated in the above cited decision relied by the learned counsel for the appellant does not come to the aid, as in the said case the accused has only raised the defence, which do not inspire the confidence and did not meet the standard of preponderance of probability. But, in the instant case the accused/respondent has discharged his burden on the basis of preponderance of probability.
18. The complainant has also not stated the date of issuance of cheque. In this context, learned counsel for the respondent/accused has relied on an unreported decision of the Hon'ble Apex Court in Criminal Appeal No.363/2019 (arising out of SLP (Crl.) No.8641/2018) between Basalingappa and Mudibasappa, wherein, the Hon'ble Apex Court has dealt with the issue in detail and held that, the presumption can be rebutted on the basis of preponderance of probabilities and issued certain guidelines to assess the same. In the instant case, the complainant except making 15 a bald assertion regarding his financial capacity to mobilise funds of Rs.12,15,000/-, has not produced any other document in that regard. Even he is unable to say as to what was the sale consideration of his land, which disclose that the complainant does not have any financial capacity to mobilise a huge amount of Rs.12,15,000/-. The loan was said to have been advanced in 2011, and in 2011, Rs.12,15,000/- was a huge amount. Even though he claims that, he was a Director of Solar System Company along with accused, but, he has not invested a single pai. Under such circumstances, the contention of the learned counsel for the appellant that, 'Ex.D1 establish the financial capacity of the appellant/complainant', holds no water, as it is only a guarantee latter and it does not establish his financial capacity to advance loan. Further, the said letter was of the year 2009 and the alleged transaction is of the year 2011. Learned counsel for the appellant/complainant has contended that, the accused/respondent has admitted issuance of the cheque and asserted that the cheque was 16 issued towards renovation of the Company. But, the cheque was issued in his name and pertaining to his personal account and it is not the cheque issued on behalf of the company and there is no signature of other directors. This does not have any relevance, as the primary burden is the complainant to prove his financial capacity, once his financial status to advance such a huge amount is disputed by the accused. Hence, in view of the decisions referred above, it is evident that the complainant has failed to establish his financial capacity to advance loan. Hence, it cannot be presumed that the cheque was issued in discharge of legally enforceable debt or liability. As such, the presumption under Section 139 of the N.I. Act stands rebutted and the accused by cross-examining the complainant, has rebutted the said presumption. As such, the appellant/complainant has failed to substantiate the contention that the cheque was issued towards legally enforceable debt, which is a mandatory requirement for attracting the offence under Section 138 of the N.I. Act. 17 Hence, the learned Magistrate is justified in answering point under consideration in the negative and the principles enunciated in the above cited decisions relied on by the learned counsel for the respondents are directly applicable to the facts and circumstances of the case in hand.
19. The learned counsel for appellant has further placed reliance on the unreported decision of the High Court in Crl.A.No.2563/2008 dated 06.09.2013 (Chandrashekhar v. Smt.Prathiba). But the facts and circumstances of the said case are entirely different and the said decision is not applicable to the case on hand, in view of the decision of the Hon'ble Apex Court reported in 2008(4) SC 54 and the decision of the Hon'ble Apex Court in Crl.A.No.363/2019 (arising out of SLP Criminal No.8641/2019).
20. Considering the facts and circumstances of this case, I am constrained to answer the point under 18 consideration in the negative and proceed to pass following:
ORDER The appeal is dismissed by confirming the judgment of acquittal dated 19.11.2015 passed in C.C.No.427/2011, by the Court of the Civil Judge, Yadgiri.
Send back the Trial Court Records to Trial Court immediately with a certified copy of this judgment.
Sd/-
JUDGE KGR*