Karnataka High Court
A P Amit Kumar vs A P Manjunath on 19 March, 2018
Author: K.Somashekar
Bench: K.Somashekar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF MARCH, 2018
BEFORE
THE HON'BLE MR.JUSTICE K.SOMASHEKAR
CRIMINAL APPEAL NO. 418 OF 2010
BETWEEN
A.P. AMIT KUMAR,
AGED ABOUT 33 YEARS,
S/O A.P. PARVATHE GOWDA,
COFFEE PLANTER,
GIRI ESTATE,
KEREMAKKI VILLAGE,
AVATHI POST,
CHIKMAGALUR TALUK.
... APPELLANT
(BY SRI. R. RAVISHANKAR, ADVOCATE)
AND
A.P. MANJUNATH,
AGED ABOUT 44 YEARS,
S/O PUTTE GOWDA,
R/O NARIGUDDE VILLAGE,
AVATHI POST,
CHIKMAGALUR TALUK AND DISTRICT.
... RESPONDENT
(BY SRI. T.H. NARAYANA, ADVOCATE)
THIS CRL.A. IS FILED UNDER SECTION 378(4)
CR.P.C PRAYING TO ALLOW THE APPEAL BY
REVERSING THE JUDGMENT OF THE ORDER DATED
20.02.2010 PASSED BY THE II ADDITIONAL C.J. AND
JMFC., CHIKMAGALUR IN C.C.NO. 3294/2006 -
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ACQUITTING THE RESPONENT/ACCUSED FOR THE
OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.
ACT.
THIS CRIMINAL APPEAL HAVING BEEN HEARD
AND RESERVED FOR JUDGMENT ON 13.03.2018
COMING ON FOR PRONOUNCEMENT THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is directed against the judgment of acquittal dated 20.02.2010 passed by the II Addl.Civil Judge and JMFC, Chikmagalur in Criminal Case.No.3294/2006 acquitting the accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the NI Act', for brevity). The same is challenged in this appeal urging various grounds.
2. The factual matrix of the complainant's case are as under:
The accused had availed hand loan of Rs.3,50,000/- from the complainant. In pursuance of the same, he had issued a cheque dated 11.8.2006 bearing No.265574 for a sum of Rs.3,50,000/- drawn on State Bank of India, :3: Chikmagalur branch. The complainant presented the said cheque for encashment through his banker - State Bank of Mysore, Chikmagalur. The same was returned unpaid with the Bank memo stating "Funds Insufficient and alteration requires authentication" to honor the cheque. They issued memo on 12.8.2006. Subsequently, the complainant got issued a legal notice to the accused calling upon him to pay the amount within 15 days from the date of receipt of the notice. The notice was served on the accused, he neither paid the amount nor replied to the said notice. The accused fully aware that there was no sufficient amount in the account had issued the said cheque purposely with some alteration with an intention to cheat the complainant thereby committing the offence punishable under Section 138 of NI Act. The cheque was issued by the accused in order to deceive the complainant, as such he was liable for punishment.
3. On filing of the complaint by the complainant before the jurisdictional court, the court after recording the sworn statement of the complainant and the :4: documents produced along with the complaint and in view of the prima facie case made out against the accused, registered the case against the accused for the offence punishable under Section 138 of NI Act and issued summons to the accused. On receipt of summons, the accused appeared before the court below through his counsel and was enlarged on bail. Plea of accusation was read over and explained to the accused and he pleaded not guilty and claimed to be tried.
4. In order to prove the case against the accused, the complainant examined himself as PW.1 and got marked six documents as per Ex.P1 to P6 and closed his side evidence. Subsequent to the closure of the evidence of the complaint the statement of the accused under Section 313 of Cr.P.C. was recorded. The accused totally denied the entire case of the complainant. No documents were marked on his behalf. Subsequently, the Trial Court, on hearing the arguments advanced by the learned counsel for both the parties, had framed the points that arose for its consideration and answered point No.1 in the negative :5: and point No.2 as per the final order and thereby acquitted the accused. It is this acquittal judgment which is called in question in the present appeal.
5. Learned counsel for the appellant vehemently contended that the Trial Court has grossly erred in holding that the complainant PW1 has admitted that there is material alteration in the instrument at Ex.P1. Therefore, under Section 87 of the NI Act any alternation in that instrument would make it as void whereas accused has not disputed his signature on the instrument of Ex.P1 cheque which is issued by him. The amount written in words as "Three Lakhs Fifty Thousand", whereas in number, the digit "5" is overwritten. Therefore, it would not amount to material alteration in the facts and circumstances of the case as the complainant has initiated the proceedings against the accused for the offence punishable under Section 138 of the NI Act relating to cheque which is bounced and also prosecute the case against him as the accused is required to pay the :6: cheque amount and the same has been established by him before the Court.
6. It is further contended that the Trial Court has not appreciated the evidence on record in respect of PW1 and also not appreciated the material facts including the provision of Section 87 of the NI Act but erroneously come to the conclusion that the complainant has not established the guilt against the accused. The accused has not lead any counter evidence. It is further contended that the Trial Court has erred in noticing the fact that the amount written in words in Ex.P1 of the instrument itself is very much clear without any ambiguity. Therefore, Section 18 of the NI Act has not been properly considered by the Trial Court.
7. It is also contended that the accused has taken a plea that the cheque at Ex.P1 was issued by him as security to the father of the complainant which has been misutilized by the complainant. But the said fact has not been proved by the accused.
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8. Lastly, it is the contention of the learned counsel that the learned Trial Judge has grossly erred in not noticing the fact that the accused did not issued reply to the legal notice issued by the complainant at Ex.P4.
9. The learned counsel has placed reliance on the judgment of the Hon'ble Supreme Court in the case of HITEN P.DALAL vs. BRATINDRANATH BANERJEE reported in (2001) 6 SCC 16 wherein it is held that presumptions under Sections 118, 138 and139 of NI Act has to be considered and it is obligatory on the court to presume the liability of the drawer of the amount of the cheque in every case where the factual basis for such presumption is established. Such a presumption can be rebutted by the drawer by proving on evidence that the holder of the cheque had not received the same towards the discharge of any liability and such a rebuttal does not have to be conclusively established. But mere explanation given by the drawer would not suffice. The statement of objects and reasons of the Act and also the preamble to the Act make it clear that the purpose of the enactment :8: was to deal with the particular transaction in securities mentioned in the statement of objects and reasons. The learned counsel contends that in the present case such a presumption was not taken by the Trial Court and the same is also not rebutted by the accused. Therefore, he contends that this case is squarely applicable to the case on hand.
10. Nextly the learned counsel taken me through the judgment of the High Court of Bombay in the case of MADHUKAR V.DESAI vs. SHAIKH ABDUL RIYAZ reported in 2006 SCC Online Bom 1500 wherein the accused had issued the blank cheque to the complainant at the time of taking loan from him. But the complainant had entered the amount and presented the same to the Bank without the knowledge of the accused. In that case the court had held that in case of any negotiable instrument the entire body has to be written by maker or drawer only and what is material is the signature of the drawer or maker and not the body writing. It has also been stated that when any negotiable instrument has :9: been executed a presumption can be raised under Section 118 of NI Act. The burden is entirely only on the drawer of the cheque to establish that the payee had no authority to put the date and amount and then encash the cheque. He contends that in the case on hand also the accused has not adduced any defence to prove that he had issued the cheque to the father of the complainant for security. Hence, contends that this case also squarely applicable to the case on hand. Hence, prays that taking into consideration the grounds urged and also the judgments relied upon by him, the judgment passed by the Trial Court be set aside by convicting the accused.
11. On the other hand, controverting the submissions made by the learned counsel for the appellant, learned counsel for the respondent/accused contends that the he has received a sum of Rs.2.00 lakhs from the father of the complainant and he had issued a blank cheque for security to the father of the complainant and there is no transaction between the complainant and the accused and the complainant has misused the blank : 10 : cheque given to his father by entering the amount as Rs.3,50,000/- and while entering the number '5' he has overwritten the same. Hence, the bank has returned the cheque with an endorsement "insufficient funds and alteration requires authentication".
12. The learned counsel further contends that as per Section 87 of the NI Act any material alteration of the negotiable instrument renders the same as void as against any one who is a party thereto at the time of making such alternation and does not consent thereto, unless it was made in order to carry out the common intention of the original parties. But as he himself has not entered the amount in the cheque, the cheque itself is a void cheque.
13. The learned counsel has relied on the decision of Bombay High Court in the case of HANUMANTH R.NAIK vs. AJIT HARMALKAR reported in AIR 2009 (NOC) 397 (Bom.) whereas the Court held that if the cheque issued by the accused was a blank cheque, except his signature, all details of cheque were filled by the complainant and at what stage cheque was filed has not been stated by the : 11 : complainant, however the evidence showed that complainant filled the cheque at a later stage and held that blank cheque is not a cheque in the eye of law and acquitted the accused. The learned counsel contends that the said case squarely applicable to the case on hand also as the accused had issued a blank cheque to the father of the complainant for security and hence it is not a valid cheque.
14. Secondly, he relied on the judgment of the Hon'ble Supreme Court in the case of C.ANTONY vs. K.G.RAGHAVAN NAIR reported in AIR 2003 SC 182 wherein the Supreme court held that the complainant was failed to establish the advancement of money to the accused and the blank cheque issued to a third person as security for future instalments in a chit transaction and complainant being a close friend of that third person has misused the blank cheque by entering the amount in the cheque and hence acquitted the accused. The learned counsel contends that this judgment squarely applies to his case also as he has also issued a blank cheque not to : 12 : the complainant but to his father as security for the amount received by him.
15. The learned counsel has also relied on the judgments of this Court in the case of B.KRISHNA REDDY vs. B.K.SOMASHEKARA REDDY reported in ILR 2006 KAR.311 and VISHNUDAS vs. MR.VIJAYA MAHANTESH reported in ILR 2007 Kar. 1708 and of the Kerala High Court in the case of RAMACHANDRAN vs. K.DINESHAN AND ANOTEHR reported in 205 CRl.L.J.1237 and KUNJAMMA CHERIYAN vs. SOLOMAN reported in 2005 Crl.L.J.1588 to contend that the blank cheque issued for the different purpose other than for discharging a loan cannot be construed as a valid cheque and the accused cannot be held responsible if the complainant enters the details and presents the same to the bank without the knowledge of the accused.
16. The learned counsel submits that the Trial Court after thoroughly appreciating the evidence on record acquitted the accused holding that the document itself is a void document when there is no legally recoverable debt : 13 : due under the document. If there is any material alterations in the cheque which renders the cheque void no criminal liability can be foisted on the accused. The said reasoning given is on consideration of the material evidences and documents on record and interference by this Court is not called for and prays for dismissal of the appeal.
17. On hearing the counsel for the parties, the point that arises for consideration in this appeal is, "Whether the Trial Court is justified in acquitting the accused for the offence punishable under Section 138 of NI Act?
18. On hearing the contentions advanced by the learned counsel for the parties and on an evaluation of the material on record, Section 87 of the NI Act is extracted hereinbelow:
"87. Effect of material alteration.- Any material alteration of a negotiable instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto, unless : 14 : it was made in order to carry out the common intention of the original parties.
Alteration by indorsee - And any such alteration, if made by an indorsee discharges his indorser from all liability to him in respect of the consideration thereof."
19. In the provision quoted above, it is clearly stated that any material alteration to a negotiable instrument renders the same void as against any one who is a party thereto at the time of making such alteration. The same has been seen in the present case as per Ex.P1 instrument of cheque placed by the complainant in order to prove the case against the accused for bouncing of the cheque issued by the accused in order to pay the amount. Therefore, the contention taken by the counsel for the appellant does not hold any substance to call for interference in the impugned judgment.
20. In the case on hand, the accused received a sum of Rs.2.00 lakhs from the father of the complainant and gave a blank cheque for the security and the : 15 : complainant misused the same by entering an amount of Rs.3,50,000/- and that too overwriting the number "5" in the cheque and presented the same before the bank. The bank dishonoured the cheque stating that "funds insufficient and alteration requires authentication" The complainant filed a complaint under Section 138 of NI Act.
21. The Trial Court on appreciation of the evidence on record in proper perspective, taking into consideration Sections 87 and 118 of NI Act holding that as there is no legally recoverable debt due under the document no criminal liability can be foisted on the accused, acquitted the accused of the offence punishable under Section 138 of the NI Act. Even the judgments relied upon by the learned counsel for the respondent/accused squarely applies to the case on hand. The Trial Court has rightly come to the conclusion by appreciating the evidence on record and the documents produced. Consequently, it does not call for interference at the hands of this Court. : 16 :
22. For the foregoing reasons, the point framed by this Court is answered in the affirmative. The appeal is rejected. The order passed dated 20.02.2010 by the 2nd Addl. Civil Judge and J.M.F.C. at Chikmagalur in Criminal Case No.3294/2006 is hereby confirmed.
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JUDGE DKB/cm/-