Karnataka High Court
M.J. Appaji Ex Mla, vs T.Pushparaj on 29 November, 2018
Author: H.B.Prabhakara Sastry
Bench: H.B.Prabhakara Sastry
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF NOVEMBER, 2018
BEFORE
THE HON'BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY
CRIMINAL APPEAL No.613 OF 2010
BETWEEN:
M.J.Appaji, Ex MLA,
S/o.Javaregowda,
Aged about 56 years,
R/o JOQ No.1,
New Town, Bhadravathi,
Shivamogga District - 577 301. .. Appellant
( By Sri R.Gopal, Advocate )
AND:
T.Pushparaj,
S/o Thimmaiah,
Aged 40 years,
Raghavendra Consultant Office,
Taluk Office Road,
Opp: Court Complex,
Bhadravathi,
Shivamogga District - 577 301. .. Respondent
( By Sri K.A.Chandrashekara, Advocate )
This Criminal Appeal is filed under Section 378(4) of
Cr.P.C praying to set aside the judgment and order of
acquittal dated 19.4.2010, passed by the Civil Judge &
Crl.A.No.613/2010
2
Addl.JMFC, Bhadravathi, in C.C.No.6325/06, acquitting the
respondent/accused for the offence punishable under Section
138 of N.I.Act.
This Criminal Appeal coming on for hearing this day the
Court delivered the following:
JUDGMENT
In the complaint filed by the present appellant under Section 200 of Code of Criminal Procedure, against the present respondent, for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as `N.I.Act'), the learned Civil Judge & Addl.J.M.F.C., Bhadravathi, (hereinafter for brevity referred to as `trial Court'), in C.C.No.6325/2006, pronounced the judgment of acquittal on 19.4.2010. It is against the said judgment of acquittal, the complainant has preferred this appeal.
2. The summary of the case of the complainant in the trial Court is that himself and the accused are well Crl.A.No.613/2010 3 known to each other and are the residents of Bhadravathi. The accused had borrowed a sum of `10 lakhs from him on 10.7.2005 for his business purpose and while availing the loan, towards the repayment of the loan amount, the accused issued a post-dated cheque in his favour bearing No.505677, dated 10.9.2005, for a sum of `10 lakhs, drawn on Canara Bank, Channagiri Road, Bhadravathi. When the said cheque was presented for realisation on 10.12.2005, the same returned dishonoured with an endorsement from the Banker that "payment stopped by drawer". Thereafter, he (complainant) got issued a legal notice to the accused on 26.12.2005, calling upon him to pay the cheque amount. The accused instead of meeting the demand made in the legal notice, issued an untenable reply on 12.1.2006. Thus, he (complainant) was constrained to institute a criminal case against the Crl.A.No.613/2010 4 accused for the offence punishable under Section 138 of N.I.Act.
3. To prove his case, the complainant got himself examined as PW-1 and got marked the documents from Exs.P-1 to P-19. The accused got himself examined as DW-1 and got marked the documents from Exs.D-1 to D-24. After hearing both side, the trial Court by its impugned judgment dated 19.04.2010, acquitted the accused of the alleged offence. It is against the said judgment, the appellant has preferred this appeal.
4. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.
5. In his memorandum of appeal, the appellant has taken a contention that the trial Court erred in holding that the appellant has not established his primary burden of establishing the existence of legally Crl.A.No.613/2010 5 enforceable debt which is against the presumption under Section 139 of N.I.Act. The conduct of the accused which was evident by the exhibits produced by the complainant was also not appreciated by the trial Court. Those documents clearly shows that the accused has been facing criminal cases of cheating. It is also contended that the issuance of cheque at Ex.P-1 since has not been disputed by the accused, the trial Court should have presumed the existence of legally enforceable debt in favour of the complainant.
The learned counsel for the complainant has reiterated the contentions of the appellant taken up in his memorandum of appeal even in his arguments also.
6. Learned counsel for the accused in his arguments submitted that even though it is an undisputed fact that the parties to the litigation were acquainted with each other and that the cheque in Crl.A.No.613/2010 6 question was issued by the accused to the complainant, but the fact that the said cheque was issued not towards repayment of the debt, but, as a debt to the complainant himself, cannot be ignored. The accused has successfully rebutted the presumption operating in favour of the complainant. Thus, the judgment under appeal does not warrant any interference at the hands of this Court.
7. It is not in dispute that the parties to the case are acquainted with each other. They were the parties to the agreement as to an Iron ore business worth `2 crores. Admittedly, the complainant is an Ex-MLA of Bhadravathi Constituency and is an active politician. He owns agricultural lands and the same is his source of income. The accused is a qualified Civil Engineer and also a businessman, running a Xerox shop and Iron ore business. The issuance of the cheque in question by the Crl.A.No.613/2010 7 accused to the complainant is not in dispute. The same is evident not only in the evidence of the parties, but also in the reply to the legal notice of the complainant given by the accused, which is marked at Ex.P-8. In the said reply notice, the accused has stated that the complainant approached him on 24.8.2005, seeking an immediate financial assistance of `20 lakhs. Having believed the genuineness of the complainant, who was an Ex-MLA and a political leader of Bhadravathi, he (accused) agreed to provide financial assistance to him. Accordingly, the accused issued two cheques of `10 lakhs to the complainant, in which the cheque dated 24.8.2005, bearing No.505678, drawn on Canara Bank, C.N.Road, Bhadravathi, was encashed by the complainant and the second cheque was asked to be presented after two or three months, so that the accused could make financial arrangement to honour the said cheque. However, in the meantime, since the Crl.A.No.613/2010 8 accused was in need of heavy funds for his business, he requested the complainant to repay the sum of `10 lakhs given to him vide cheque No.505678. However, the complainant refused to return the said amount and despite the request of the accused not to present the second cheque for payment, the complainant proceeded to present the same. This has made the accused to give a stop payment instruction to his Banker. Accordingly, the said cheque was returned dishonoured with an endorsement "payment stopped by the drawer".
8. The said contention taken up by the accused in his reply notice is also his defence in the trial Court. The suggestions to PW-1 - the complainant, in his cross- examination, were made from the accused side on the similar lines, however, the said suggestions were not admitted as true by PW-1.
Crl.A.No.613/20109
9. Similarly, the accused who got himself examined as DW-1 in the trial Court reiterated his defence taken up in his reply notice at Ex.P-8 and even in his examination-in-chief also. However, the denial suggestions were made to the said witness in his cross-examination from the complainant side, which denial suggestions were not admitted as true by DW-1.
10. From this, the fact that stands established is that the cheque in question, which is at Ex.P-1, was issued by the accused to the complainant. Therefore, by virtue of Section 139 of N.I.Act and also the judgment of Hon'ble Apex Court in the case of Rangappa -vs- Sri Mohan, reported in {2010 (11) SCC 441}, the legal presumption about the existence of legally enforceable debt comes into existence in favour of the complainant. Since the said presumption is rebuttable, it is to be seen whether the accused has successfully Crl.A.No.613/2010 10 rebutted the said presumption existing in favour of the complainant.
11. As already observed above, it is the defence of the accused that the complainant had no source of funds to lend him a sum of `10 lakhs, on the contrary, the complainant himself was a borrower, who had requested for a loan of `20 lakhs, which was paid by the accused in the form of two cheques `10 lakhs each, in which, one cheque was encashed by the complainant, but, before the second cheque could be encashed, the accused had issued a stop payment instruction to his Banker, as such, the same came to be dishonoured.
12. The complainant who got himself examined as PW-1 has reiterated the contents of his complaint even in his examination-in-chief in the form of affidavit. In his cross-examination from the accused side, he has stated that basically he hails from a village and settled Crl.A.No.613/2010 11 at Bhadravathi in the year 1972. He joined Vishveswaraiah Iron & Steel Ltd., as a `D' group employee and took voluntary retirement in the year 1994, at which time, his monthly salary was at `4,000/- to `5,000/-. He was a MLA from the year 1994 to 2004. He has got agricultural lands in his native village to an extent of 12 acres, in which, a portion has been already sold. He has also stated that his wife is also owning a garden land and his family's income is only an income from the agriculture and nothing else. Thus, primarily he has admitted that his source of income would be only from agriculture and nothing more.
The complainant in his examination-in-chief has specifically stated that the alleged loan transaction was on the date 10.7.2005, however, in his cross- examination dated 6.2.2009, he has stated that he does Crl.A.No.613/2010 12 not remember as to on which date and day the accused had requested for loan from him.
Secondly, in the earlier part of his cross-examination, though he has stated that the amount of alleged hand loan was pooled by him by raising funds from eight to ten of his friends, but, in his further cross-examination, he has stated that he does not able to name those eight to ten persons who had given him money to lend it to the accused. He has also stated that, such pooling of fund by raising from his friends was only on confidence, for which, no documentation was made. However, he has stated that he had agreed to pay interest to his friends on the said amount. He has also admitted in his cross-examination that being a candidate in an election, who has filed his nomination on five times, he was also required to file the details about his assets and liabilities at that time. Crl.A.No.613/2010 13 The accused confronted the document at Ex.D-1 to the complainant in his cross-examination, which the complainant had admitted to be a copy of the affidavit filed by him while contesting the election.
13. From the above evidence of PW-1 and the statements elicited by him in his cross-examination, it can be gathered that even according to the complainant, except his agricultural income, he has no source of income. Though he has stated in his affidavit evidence that the accused approached him and availed a hand loan of `10 lakhs on 10.7.2005, but the very same witness in his cross-examination has stated that he does not remember as to when the accused approached him for the loan. This gives rise to a suspicion regarding the loan transaction as canvassed by the complainant.
Secondly, when admittedly such a huge amount of `10 lakhs was not available with the complainant at the Crl.A.No.613/2010 14 relevant point of time and that he has stated that he pooled money from eight to ten of his friends and paid it to the accused, but, he has failed to disclose the names and details of those eight to ten persons who were said to have contributed for pooling up of fund by the complainant. Had really the complainant raised funds from the alleged eight to ten persons, then, nothing had prevented him to disclose their names or give more details about he getting the assistance from those alleged contributors in pooling the funds.
Thirdly, even according to the complainant, he by himself had no funds to an extent of `10 lakhs to be paid to the accused on the date of alleged loan. On the other hand, as admitted by him in his cross- examination, himself was a loanee to a sum of `2,09,709/- towards Syndicate Bank and another sum of `2 lakhs towards Canara Bank. Thus, the complainant Crl.A.No.613/2010 15 himself was a borrower from different banks. When the complainant himself is a borrower for a huge amount from various banks, how come he gives a hand loan of a huge amount of `10 lakhs to the accused is also a factor of serious doubt that creeps in the matter.
Fourthly, as has come out in the evidence of PW-1/ complainant that, except two transactions, there were no other transactions between himself and the accused. PW-1 has also stated that previously the accused had executed an agreement in his favour, but, during the existence of the said agreement, he sold the property to somebody else and thus cheated him. Even though he has not produced any document in that regard, but, if the said statement of complainant is believed about the alleged cheating by the accused, then, a serious doubt arises as to how come the complainant could lend a hand loan of a huge amount of Crl.A.No.613/2010 16 `10 lakhs to the accused who is said to have cheated him (complainant) earlier.
Fifthly, admittedly the complainant is a wordily man, a person in political field and also was a Member of Legislative Assembly for not less than a period of ten years from 1994 to 2004, which period was earlier to the alleged loan transaction, as such, he knows about the business transactions and the documents that were required to be made. However, admittedly there is no documentation of alleged loan transaction, in which, the cheque at Ex.P-1 is said to have been issued by the accused to him (complainant) towards repayment of the alleged loan. Therefore, the contention of the complainant that by borrowing the money from eight to ten persons, he lent it to the accused, who had earlier cheated him and also that he did not insist for any Crl.A.No.613/2010 17 documentation of the alleged loan transaction, gives rise to a serious doubt in believing it.
Sixthly, PW-1 in his cross-examination has stated that he does not know about the assets owned by the accused who was known to him during the year 1996. He also stated that he does not know as to what business the accused was doing. He does not even know about the income of the accused. In such a situation, for a person with respect to whom the complainant does not know anything, including the business, assets and income of that other person, on what basis the complainant would give such a huge amount of money as hand loan, is highly suspectable and does not inspire confidence in believing the said version of the complainant. In that regard, in the cross- examination of PW-1 himself, when a specific question was put to the witness stating that when the accused Crl.A.No.613/2010 18 was neither his friend nor his relative and the complainant himself had no sufficient source of funds, but, on the other hand, complainant himself was a debtor, despite all these things, how come he lent money to the accused. To the said question, the complainant answered stating that since the accused pleaded his difficulty, he lent him money. The said statement of the complainant that even after he is said to have been cheated by the accused with respect to the transaction of an immovable property and himself having no source of fund and being a debtor, he raises a huge amount of `10 lakhs from eight to ten of his friends, that too, agreeing to pay those friends the interest on the said amount, lends it to the accused without knowing any basics about him regarding the avocation, income or assets of the accused, is highly unbelievable. Therefore, by his cross- examination of PW-1, the accused could able to Crl.A.No.613/2010 19 introduce very serious and strong doubts about the alleged transaction.
14. The complainant as PW-1 by leading his further evidence in the trial Court, has also produced the documents at Exs.P-9 to P-19, which are the certified copies of the ten criminal cases of the year 2002 and one original suit of the year 2004 to show that several criminal cases alleging the offence of cheating etc., were filed against the accused, as such, his conduct was not trustworthy. However, the alleged previous bad character of a person is not relevant, except in reply as per Section 54 of the Indian Evidence Act, 1872.
15. Even otherwise, the documents at Exs.P-9 to P-19 are all of the years earlier to the alleged transaction in question, which is of the year 2005. Thus, from the evidence and the documents of the complainant, it is clear that earlier to the transaction in Crl.A.No.613/2010 20 question itself, the complainant claims to be a sufferer of cheating at the hands of the accused and also was aware of several criminal cases and civil disputes said to have been pending against the accused. Despite the same, how come and why did the complainant lent a huge amount of `10 lakhs to the accused, that too, without any documentation and without even knowing the details about the avocation, income and assets of the accused, creates a serious doubt about the transaction in question and makes the version of the complainant highly suspectable.
16. On the other hand, it is the defence of the accused that he had never been in financial constraints and that he had sufficient funds which he was earning by doing Iron ore business and running a Xerox shop. It is his case that he never borrowed any amount from the complainant, in turn, the complainant himself had Crl.A.No.613/2010 21 requested him for a loan of `20 lakhs, in which, `10 lakhs has already been paid to him in the form of a cheque, which the complainant has encashed and another cheque for a sum of `10 lakhs, which is the cheque in question at Ex.P-1, given by the accused as a loan to the complainant, however, its payment was stopped by him (accused).
The cross-examination of PW-1 and the examination-in-chief of DW-1 are on the said lines. It is in that regard, the accused has produced the documents from Exs.D-1 to D-24, which mainly includes his bank statements, pass book, income and expenditure account, balance sheet, income-tax receipts etc., Those documents have not been specifically denied by the complainant side. The documents, more particularly, the bank statements of the accused and his family members, which are at Exs.D-3, D-4 and D-5, clearly go Crl.A.No.613/2010 22 to show that as on the date of alleged loan said to have been borrowed by the accused, the accused himself had a huge balance in his and his family members bank accounts. Ex.D-3 shows in generally, the turn over in the bank account of the accused are in several lakhs of rupees and he had balance of several lakhs of rupees in his account at the relevant point of time. It shows, in the first week of August 2005, his bank balance was more than `50 lakhs. The very same document further go to show that on 24.8.2005, a sum of `10 lakhs in the form of cheque has been encashed by the present complainant. Thus, it is evident that a sum of `10 lakhs has been paid by the accused to the complainant, which the accused claims to be a loan.
17. In the cross-examination of DW-1, a question was put to the accused/DW-1 as to what made him to issue two cheques of `10 lakhs to the complainant when Crl.A.No.613/2010 23 he could have issued a single cheque for `20 lakhs to him, to the said question, the witness has stated that since the complainant did not execute any document for taking the loan, he gave only a cheque of `10 lakhs on the same day and expecting that he would execute loan documents in the meantime, he gave a post-dated cheque for the remaining sum of `10 lakhs. Since the complainant did not execute any loan documents, he issued a stop payment instruction to his Banker for stopping the payment of the said second cheque, which according to the accused, is the cheque in question at Ex.P-1. The said evidence of DW-1 about the alleged transaction and how it has flown has been chalked in a detailed manner in his evidence and more in vivid manner in his cross-examination. The details given by DW-1 in his cross-examination as to what made him to issue the cheque at Ex.P-1 to the complainant and under Crl.A.No.613/2010 24 what circumstances, could not able to be dismantled or weekend from the complainant side in any manner.
On the other hand, the cross-examination of PW-1 from the accused side could able to succeed in installing several serious doubts in the case of the complainant, that too, particularly about the alleged transaction of the loan as depicted by the complainant. Thus, by the preponderance of possibilities, it is difficult to believe that there was any loan transaction between the complainant and the accused, wherein, the complainant had given a hand loan of `10 lakhs to the accused on 10.7.2005. Therefore, the question of the accused giving the cheque at Ex.P-1 to the complainant towards the repayment of the alleged hand loan also cannot be believed.
18. On the other hand, the defence of the accused that he had given two cheques to the complainant of Crl.A.No.613/2010 25 `10 lakhs each, wherein, one cheque was encashed by him and towards the second cheque, the accused had given a stop payment instruction for the reason explained by the accused in his evidence appears to be more nearer to the truth. Therefore, it has to be necessarily held that the presumption that exists in favour of the complainant was successfully rebutted by the accused. However, the complainant could not prove his case, so also, the alleged guilt of the accused. Even though the trial Court has commenced the analysis of the evidence on the erroneous preposition of law that burden of proving the existence of legally enforceable debt was primarily upon the complainant, but, its conclusion in pronouncing the judgment of acquittal cannot be found fault with.
19. As observed above, even after giving the benefit of presumption under Section 139 of N.I.Act in Crl.A.No.613/2010 26 favour of the complainant, the said presumption since has been successfully rebutted by the accused and the complainant having utterly failed to establish the alleged guilt against the accused for the offence punishable under Section 138 of N.I.Act, I hold that the appeal is bereft of any merit.
Accordingly, the Appeal stands dismissed as devoid of merits.
Sd/-
JUDGE bk/