Karnataka High Court
Pampanna S/O Nagappa H vs Nagaraj Gupta on 2 September, 2024
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NC: 2024:KHC-D:12558
CRL.A No. 100008 of 2017
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 2ND DAY OF SEPTEMBER, 2024
BEFORE
THE HON'BLE MS. JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.100008 OF 2017 (A)
BETWEEN:
PAMPANNA S/O. NAGAPPA H.,
AGE: 36 YEARS, OCC: AGRICULTURE,
R/O: HOSALLI, TQ: GANGAVATHI,
DIST: KOPPAL.
...APPELLANT
(BY SRI A.M. GUNDAWADE, ADVOCATE FOR APPELLANT)
AND:
NAGARAJ GUPTA S/O. MANGALESH GUPTA,
AGE: 43 YEARS, OCC: BUSINESS,
R/O: BESIDE CHANNABASAVESHWARA MILK DAIRY,
M.G. ROAD, GANGAVATHI.
...RESPONDENT
(BY SRI SUNIL S.DESAI, ADVOCATE FOR RESPONDENT)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF
Digitally signed by CR.P.C., PRAYING TO ALLOW THE PRESENT APPEAL BY SETTING
YASHAVANT ASIDE THE JUDGMENT OF ACQUITTAL DATED 08.11.2016, PASSED
NARAYANKAR IN CRIMINAL CASE NO.247 OF 2013, BY PRINCIPAL CIVIL JUDGE
Location: HIGH AND JUDICIAL MAGISTRATE FIRST CLASS COURT GANGAVATHI AND
COURT OF
KARNATAKA TO PASS A JUDGMENT OF CONVICTION AGAINST THE
ACCUSED/RESPONDENT FOR THE OFFENCE PUNISHABLE UNDER
SECTION 138 OF NEGOTIABLE INSTRUMENT ACT AND ALSO
DIRECTING THE RESPONDENT TO PAY COMPENSATION TO THE
COMPLAINANT INCLUDING THE CHEQUE AMOUNT OF RS.4,00,000/-
IN ACCORDANCE WITH LAW.
THIS CRIMINAL APPEAL, COMING ON FOR DICTATING
JUDGMENT, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
CORAM: THE HON'BLE MS. JUSTICE J.M.KHAZI
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NC: 2024:KHC-D:12558
CRL.A No. 100008 of 2017
ORAL JUDGMENT
(PER: THE HON'BLE MS. JUSTICE J.M.KHAZI) In this appeal filed under section 378(4 ) of the Code of Criminal Procedure, the appellant/complainant has challenged dismissal of the complaint filed by him for the offence punishable under section 138 of Negotiable Instruments Act, and thereby acquittal of the respondent/accused by the trial court.
2. For the sake of convenience, parties are referred to by their ranks before the trial court.
3. Complainant filed complaint against the accused contending that he and accused are known to each other and with that acquaintance, on 02.08.2012 accused borrowed loan of ₹3,50,000/- from him for improvement of his business and also for family necessity. He promised to repay the loan with interest at 2% per month and on the same day issued a post dated 02.03.2013 cheques for ₹4,00,000/-, including the interest calculated for seven months, with an assurance that it would be realised on -3- NC: 2024:KHC-D:12558 CRL.A No. 100008 of 2017 presentation. Accordingly, on 04.03.2013, the complainant presented the said cheque for realisation through his account. However, on the same day, it was returned dishonoured with an endorsement 'account dormant'. Even though, he brought this to the notice of the accused, he did not arrange for payment of the amount due. Hence, complainant got issued legal notice dated 15.03.2013. Intentionally, the accused has refused to receive the notice and comply with it. Without any alternative, the complaint is filed.
4. After due service of summons, accused has appeared before the trial court and contested the case by pleading, not guilty.
5. In order to prove the allegations against the accused, complainant is examined as PW1 and marked Exs.P1 to 9.
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6. During the course of his statement under Section 313 Cr.P.C, the accused had denied the incriminating evidence led by the complainant.
7. Accused has not let any defence evidence.
8. Vide impugned judgement and order, the trial court dismissed the complaint.
9. Aggrieved by the same, the complainant is before this court contending that it is contrary to the facts, probabilities of the case and evidence on record. There is sufficient evidence both oral and documentary to prove the allegations against the accused and the same is not appreciated by the trial court. There is no dispute that the cheque in question is drawn on the account of the accused maintained with his banker and it bears his signature. The presumption under Section 139 of N.I.Act is attracted, placing the initial burden on the accused to rebut the same, only after which the burden would shift on the complainant. Despite the fact that accused has failed to -5- NC: 2024:KHC-D:12558 CRL.A No. 100008 of 2017 rebut the presumption and the complainant establishing his financial capacity to lend ₹3,50,000/-, the trial court has disbelieved the case of the complainant and dismissed the complaint. It has also erred in holding that the dishonour of the cheque on the ground of account being dormant would not fall under the category attracting the offence punishable under Section 138 of N.I.Act. The reasons assigned for dismissing the complaint are not sustainable and call for interference by this court.
10. In support of his arguments, the learned council for complainant has relied upon the following decision.
i) Rajesh Jain vs Ajay Singh1;
11. On the other hand, learned counsel for the accused has supported the impugned judgment and order and sought for dismissal of the appeal also.
12. In support of her arguments, learning counsel for the accused has relied upon the following decisions: 1 SLP (Crl.) No.12802/2022 -6-
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i) Basalingappa vs Mudibasappa2
ii) Sunitha, vs Sheela Antony and Another3
13. Heard elaborate arguments of both sides and perused the records.
14. Thus, it is the definite case of complainant that the cheque in question was issued by the accused towards repayment of legally recoverable debt or liability. However, when presented for realisation, it was dishonoured on the ground that the account is dormant. After issue of legal notice and on the failure of the accused to comply with the said notice, complaint is filed.
15. Though accused admit that the cheque in question is drawn on his account and it bears his signature, he has disputed that he borrowed any loan from the complainant and issued the cheque towards repayment of the said loan. Even though the accused has not sent any reply to the Legal notice, at the trial he has 2 (2019) 5 SCC 418 3 2020 SCC OnLine Ker 1750 -7- NC: 2024:KHC-D:12558 CRL.A No. 100008 of 2017 come up with a specific defence that the complainant is not having financial capacity to lend ₹3,50,000/-. He has claimed that the subject cheque and one more cheque was issued by him to one Maruti Prasad and utilising one of the cheque, he has filed this complaint to help this Maruti Prasad who has also filed a complaint against the accused.
16. Now coming to the fact of the present case. Having regard to the fact that accused admit that the cheque in question is drawn on his account, maintained with his banker and bears his signature, the presumption under Section 139 of N.I Act, is attracted and is operating in favour of the complainant. It would place the initial burden on the accused to prove that it was not issued for repayment of any legally recoverable debt or liability, but on the other hand to establish the circumstances in which the cheque has reached the hands of complainant, after which the burden would shift on the complainant to prove his case. Of course, it is sufficient for the accused to -8- NC: 2024:KHC-D:12558 CRL.A No. 100008 of 2017 probabilise his defence, whereas the complainant is required to prove his case beyond reasonable doubt.
17. However, in John K.Abraham Vs. Simon C. Abraham & Anr (John K.Abraham)4, the Hon'ble Supreme Court held that in order to draw presumption under Sections 118 and 139 of N.I Act, the burden lies on the complainant to show that:
(i) She had the requisite funds for advancing the sum of money/loan in question to accused.
(ii) The issuance of cheque by accused in support of repayment of money advanced was true and
(iii) The accused was bound to make payment as had been agreed while issuing cheque in favour of the complainant.
18. In Tedhi Singh Vs Narayan Das Mahant (Tedhi Singh)5, the Hon'ble Supreme Court held that where the 4 (2014) 2 SCC 236 5 2022 SCC OnLine SC 302 -9- NC: 2024:KHC-D:12558 CRL.A No. 100008 of 2017 accused has failed to send reply to the legal notice, challenging the financial capacity of the complainant, at the first instance, complainant need not prove his financial capacity. However, if during the course of trial accused has taken up such defence, then it is necessary for the complainant to prove his financial capacity, when he allegedly advanced the amount and towards repayment of it, the accused has issued the cheque.
19. In fact, in APS Forex vs Shakti International Fashion Linkers Pvt. Ltd (APS Forex)6, the Hon'ble Supreme Court held that when accused rises issue of financial capacity of complainant in support of his probable defence, despite presumption in favour of complainant regarding legally enforceable debt under Section 139, onus shifts again on the complainant to prove his financial capacity by leading evidence, more particularly when it is a case of giving loan by cash and thereafter issue of cheque.
6 (2020) 12 SCC 724
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20. In the light of the ratio in the above decisions and also the specific defence taken by the accused, it is for the complainant to prove that the legal notice was sent to the correct address of the accused and he has intentionally not received it and therefore, there is Presumption of service. It is also for the complainant to prove his financial capacity, after which accused is required to prove his defence.
21. So far as issue of legal notice is concerned, accused is not disputing his address to which the legal notice was sent. It is the same address given in the complaint at which the summons is served on the accused. As evident from the endorsement on the postal envelope at Ex.P6, the accused has refused to receive the same and as such it is returned to the sender. Therefore, it is required to presume that intentionally, the accused has failed to receive the notice and comply with it or send reply.
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22. In the light of the ratio in (Tedhi Singh), despite the fact that accused has not sent reply to the legal notice challenging the financial capacity of the complainant, at trial, he may do so, in which event, it would be necessary for the complainant to prove his financial capacity. During the course of his arguments, it is submitted by the learned counsel for complainant that the accused has not challenged the financial capacity of the complainant and therefore, he is not required to prove the same. I am afraid this submission is not acceptable. The accused has cross-examined the complainant as to the source of income. At the time of cross-examination, the complainant has deposed that he is having 5 acres and 20 guntas of agriculture land, and he is personally cultivating them rising paddy and getting 40 bags of paddy per acre and getting ₹35,000 to ₹40,000 per acre. He has also deposed that usually he sell the paddy through Shanti Traders. He is not having any documents to evidence the said fact.
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23. When complainant is regularly growing paddy and sell the same through a dalal, he is expected to be in possession of receipts for having supplied the paddy and received money. When the complainant has maintained an account, it is reasonable to expect that he would keep his income in the account. Even though complainant has produced RTC extract Exs.P7 to 9 in respect of the lands standing in his name, column No.13 does not disclose the nature of the crops grown. In fact, there is endorsement to the effect that "no crop information" is forthcoming. The complainant has not come up with any other source of income other than agriculture. In the absence of proof of having carried out any agricultural operations and also received income from the same, the contention of complainant that he was having sufficient source of income to lend ₹3,50,000/- to the accused cannot be accepted. Complainant having failed to prove his financial capacity, in the light of the ratio in (APS Forex), the presumption under section 139 of the N.I.Act is not raised, and the burden has not shifted on the accused to rebut the
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NC: 2024:KHC-D:12558 CRL.A No. 100008 of 2017 same. So far as the decision in (Rajesh Jain) is concerned, on facts, it was held that complainant proved the basic facts and accused failed to rebut the presumption under section 139 of N.I.Act. Therefore, the decision in (Rajesh Jain) is not applicable to the case on hand.
24. Though, The complainant has denied that he is working as a clerk with the financial establishment run by Maruti Prasad and Raghavendra, who are brothers and to help them, he has filed the complaint utilising one of the cheques given to the said Maruti Prasad, he has admitted that he know them. One more important factor that weigh in favour of the accused is that the signature and rest of the writing in the cheque at Ex.P1 is in different ink, which support the defence of the accused that a blank check was given by way of security and it was filled up to suit the convenience to file the complaint.
25. Anyhow, since the complainant has failed to prove his financial capacity, taking into consideration the
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NC: 2024:KHC-D:12558 CRL.A No. 100008 of 2017 oral and documentary evidence placed on record, the trial court has come to a correct conclusion that the allegations against the accused are not proved and acquitted him. This court finds no justifiable grounds to interfere with the conclusions arrived at by the trial court. In the result, the appeal fails and accordingly the following;
ORDER
(i) Appeal filed by the complainant
is dismissed.
(ii) The impugned judgment and
order of acquittal dated 08.11.2016
passed in C.C.No.247/2013 by the
Principal Civil Judge and JMFC,
Gangavathi is confirmed.
(iii) Registry is directed to send back the trial court records along with copy of this order.
Sd/-
(J.M.KHAZI) JUDGE MBS, CT: UMD List No.: 1 Sl No.: 27