Karnataka High Court
Santosh S/O Nagesh Nayak vs Haribhai S/O Lalji Patel on 11 November, 2020
Author: Ravi.V.Hosmani
Bench: Ravi V. Hosmani
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 11TH DAY OF NOVEMBER 2020
BEFORE
THE HON'BLE MR. JUSTICE RAVI V. HOSMANI
CRIMINAL APPEAL NO.2784/2012
BETWEEN:
Sri Santosh
S/o Nagesh Nayak
Age: 51 years, Occ: Business
R/o M/s N.N. Nayak and Sons,
Plot No.27, Unkal Timber Yard, Hubli,
Dist: Dharwad
...APPELLANT
(BY SHRI. DINESH M KULKARNI, ADVOCATE)
AND:
Shri Haribhai
S/o Lalji Patel,
Age: Major, Occ: Business,
R/o Plot No.25, Unkal Timber Yard,
Hubli, Dist:Dharwad.
... RESPONDENT
(BY SHRI . M.N. HANCHINAMANI, ADVOCATE)
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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 OF
Cr.P.C. SEEKING TO SET ASIDE JUDGMENT DATED 14.03.2012
PASSED BY THE III ADDL. SENIOR CIVIL JUDGE & JMFC COURT,
HUBLI, IN C.C.NO.581/2008 AND CONVICT THE RFESPONDENT
FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE
N.I. ACT.
THIS APPEAL BEING RESERFVED FOR JUDGMENT ON
03.11.2020, THIS DAY, THE COURT, DELIVERED THE
FOLLOWING:
JUDGMENT
The above appeal is filed by the appellant challenging the judgment of acquittal dated 14.03.2012 in C.C.No.581/2008 passed by the III Additional Senior Civil Judge & JMFC., Hubli.
2. The brief facts leading to filing of this appeal are that appellant filed a complaint under Section 200 of Cr.P.C. against accused alleging offence under Section 138 of Negotiable Instruments Act (for short hereinafter referred to as 'N.I.Act'). In the complaint, it was stated that complainant and accused knew each other and that on or about 04.06.2006, accused took hand loan of Rs.1,60,000/- from complainant assuring repayment within two months and a cheque bearing No.359008 dated 3 02.09.2006 drawn on Syndicate Bank, Vidynagar, Hubli, was issued to that effect. But, when cheque was presented, it was returned on 07.09.2006 with an endorsement 'drawer's signature incomplete/illegible/differs/required'. Thereafter complainant issued a legal notice on 20.09.2006 calling upon the accused to pay the amount mentioned in the cheque within 15 days. Despite receipt of notice, accused neither replied the notice nor paid the amount. Hence, complaint was filed.
3. After recording sworn statement of complainant, the Trial Court issued summons to accused. The accused appeared through counsel. Thereafter substance of accusation was recorded, for which accused pleaded not guilty and sought trial.
4. In support of his case, complainant examined himself as PW1 and got marked Exs.P1 to P.4. Accused got examined himself as D.W.1.
5. The Trial Court framed following points for consideration:
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(1) Whether the complainant proves beyond all reasonable doubt that on or about 4.6.2006 the accused had availed a hand loan of Rs.1,60,000/-
from him and towards the discharge of the same, he had issued a cheque bearing No.359008 drawn on Syndicate Bank, Hubli, for Rs.1,60,000/- on 02.09.2006 and when he had presented the same for encashment through his banker-Corporation Bank, Hubli, the same was returned with an endorsement 'drawer's signature incomplete/illegible/differs required' vide memo dated 7.9.2006, thereafter on 20.9.2006 he had issued a legal notice to the accused, inspite of the receipt of the same, the latter neither replied nor repaid the amount covered under the cheque and thereby committed an offence punishable under section 138 of N.I. Act?
(2) Whether the accused rebuts the presumption u/s 139 of the N.I. Act?
(3) What order?
6. After answering point no.1 in the negative and point no.2 in the affirmative, Trial Court passed impugned judgment acquitting the accused. Challenging the same, complainant is in appeal.
7. Learned Counsel Shri Dinesh Kulkarni submitted that accused had borrowed a hand loan of Rs.1,60,000/- from complainant on 04.06.2006. Towards repayment, he had issued a cheuqe bearing No.359008, dated 02.09.2006. When cheque 5 was presented for payment, it was returned on 07.09.2006 with banker's endorsement 'drawer's signature incomplete'. A legal notice came to be issued to accused and served on 20.09.2006. Despite, receipt of notice, accused neither paid the cheque amount nor replied to it. Hence, appellant filed a complaint. Though accused appeared before the Trial Court and admitted his signature on the cheque and its issuance to complainant, the Trial Court on hyper-technical grounds passed the impugned order of acquittal.
8. It was submitted that, the reasons assigned by the trial Court for acquittal are that complainant had failed to prove 'legally recoverable debt' even though accused had admitted his signature on the cheque and its issuance. Though accused contended that cheque was issued in respect of an earlier hand loan transaction of Rs.10,000/-, which was repaid by him in the year 2004, but, accused did not lead any evidence to prove the same. There is also failure on the part of accused to reply the legal notice. There is no explanation as to why attempt was not made to obtain return of the said cheque. There is also no 6 evidence with regard to accused instructing the bank not to honor the cheque, which improbabalises the defence taken by accused. The Trial Court also erred in ignoring the presumption available in favour of complainant under Section 139 of the N.I. Act and placing the burden of proof on him.
9. In support of his contention, learned counsel relied upon the decision of the Hon'ble Supreme Court in the case of Bir Singh Vs. Mukesh Kumar reported in (2019) 4 SCC 197.
10. On the other hand, learned counsel Sri. M.N. Hanchinamani, for the accused submitted that the very averment in the complaint is that accused borrowed hand loan of Rs.1,60,000/- 'on or about' 04.06.2006. But, in his cross- examination complainant admits that hand loan of Rs.1,60,000/- was given in 'August, 2005'. In further cross-examination he says that Rs.50,000/- was paid in cash and Rs.1,10,000/- was in respect of wood supplied to accused. Complainant has further admitted that dues of accused are not mentioned in the balance sheet and though, he says that details and size of the wood 7 supplied is entered in a rough account book, he has not produced the same before the Court. Thus, there is not only contradiction, but also attempt to improvisation in evidence. Considering the above and in the light of the defence taken by the accused that cheque was issued to complainant with regard to an earlier loan transaction of the year 2004, explanation of accused is more probable as compared to the material discrepancies in the case of the complainant.
11. Learned counsel relied upon the following decisions in support of his contentions:
i) 2013 (3) SCC 86, Vijay Vs. Lakshman & Ors.
ii) 2010 (11) SCC 441, Rangappa vs. Mohan.
12. In reply, learned counsel for appellant referred to paragraph Nos.18 and 19 of the judgment in Bir Singh's case (supra) to contend that burden to prove contrary lies on the accused and onus to prove that cheque was in discharge of any debt or liability ought not to be placed on the complainant, when signature on the cheque is admitted.
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13. It is an admitted fact that there was loan transaction between complainant and accused. The cheque in question was signed and issued by accused to the complainant. However, there is serious dispute regarding the amount of Rs.1,60,000/- and cheque being issued towards discharge of the same. There is also dispute regarding time of the transaction.
14. On a perusal of the complaint, it is seen that complainant has stated that accused took hand loan of Rs.1,60,000/- from him, 'on or about 04.06.2006'. It is further stated that accused had issued a cheque bearing No.359008 dated 02.09.2006 drawn on Syndicate Bank, Hubli, for Rs.1,60,000/-. But, date of issuance of the cheque is not mentioned. Even breakup of due amount was sought to be clarified in cross-examination by stating that Rs.50,000/- was cash payment and Rs.1,10,000/- was credit towards supply of wood. It is also admitted that details of the wood supplied to accused are entered in a rough book. This fact is also not stated in the complaint. The rough book is not produced. It is also admitted that during August 2005, wood worth Rs.1,10,000/- 9 was supplied to accused. When it is an admitted fact that both complainant as well as accused are timber merchants failure on the part of complainant to produce account books showing dues in respect of accused is a material omission. Likewise, explanation for the sum of Rs.1,60,000/- as two sub- transactions, one in cash and another credit towards wood supplied not being stated in the compliant, is a material contradiction. There is also contradiction about the date of transaction. It is mentioned in the complaint as 'on or about 04.06.2006'. Whereas, in the cross-examination it is stated to be of 'August 2005'.
15. Though learned counsel for appellant relies upon paragraph 18, 13 and 39 of the decision in Bir Singh's case (supra), the proposition that when signature on the cheque and its handing over to complainant are admitted, onus will be on the accused to prove that cheque was not issued in discharge of a debt or liability by adducing evidence. The subsequent filling in a signed cheque is not an alteration and accused would be guilty 10 of offence under Section 138 of the N.I. Act, if such cheque was dishonoured.
16. However, on a perusal of the said decision, the question involved therein is, as to whether burden of proof regarding legally recoverable debt was on the complainant or accused?. The Hon'ble Supreme Court on a review of the law regarding presumption under Section 139 of the N.I. Act was pleased to reiterate that when accused admits issuing a signed cheque to complainant, onus would be on the accused to prove that cheque was not issued in discharge of a debt or liability. The accused therein had taken a defence that complainant was a tax practitioner and used to file returns through him and that a signed blank cheque was given to him for making payment of tax amount. It was contended that accused was in a fiduciary position with regard to complainant. Under such circumstances, burden of proving that cheque was issued for repayment of a legally recoverable debt which was placed on the complainant by the Trial Court held to be contrary presumption available to complainant under Section 139 of the Act.
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17. The facts of the present case are not on par with those in Bir Singh's case (supra), however, pivots on a different issue. The trial Court on consideration of the material omissions and contradictions in the version of the complainant regarding period of transaction as well as amount due not matching the cheque amount involved, acquitted the accused. As rightly submitted by learned counsel for the accused, the standard of proof for upsetting the presumption in favour of complainant is preponderance of probabilities as held in Vijay Vs. Lakshman's (supra). In order to do so, accused need not step into the witness box to prove that cheque issued was not in discharge of a legally recoverable debt or liability under Section 138 of the NI Act. He can very well establish the same by setting up a defence by preponderance of probabilities to upset the rebuttable presumption available to complainant [as per Rangappa's case (supra] when a probable defence is set up by accused, burden of explaining the same is on the complainant and standard of proof applicable for evaluating such explanation would be proved beyond reasonable doubt.
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18. On over all consideration of the entire evidence on record, omissions and contradictions with regard to the period of transaction and amount involved coupled with failure to produce books of accounts by the complainant, who is a businessman and the transaction being a part of his business, the Trial Court, in my opinion, has rightly come to the conclusion that the complainant has failed to prove that an offence under Section 138 of the N.I. Act was committed by the accused and therefore, acquittal of the accused for the offence is justified. Hence, there is no merit in the appeal. Accordingly, it is dismissed.
SD/-
JUDGE Psg*