Karnataka High Court
Ram Murthy S/O Anantachar Mathad vs Vasudev Vaidhya S/O Krishnachar ... on 1 September, 2021
Equivalent citations: AIRONLINE 2021 KAR 2755
1 CRL.A.No.200058/2015
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 01ST DAY OF SEPTEMBER, 2021
BEFORE
THE HON'BLE MRS. JUSTICE J.M.KHAZI
CRIMINAL APPEAL No.200058/2015
BETWEEN:
Ram Murthy S/o Anantachar Mathad,
Age: 50 years, Occ: LIC Agent,
R/o Beroon Quilla, Raichur-585401.
... Appellant
(By Sri. Sachin M.Mahajan, Advocate for
Sri. R.S.Sidhapurkar, Advocate)
AND:
Vasudev Vaidhya S/o Krishnachar Vaidhya,
Age: 40 years, Occ: Private Service,
R/o H.No.3-2-223, Near Venugopalswamy Temple
Fort, Raichur-585401.
... Respondent
(By Sri. Arunkumar Amargundappa, Advocate)
This Criminal Appeal is filed under Section 378(4) of
Cr.P.C. with a prayer to admit the appeal, call for the
records of the trial courts and set aside the judgment and
order dated 17.03.2015 in C.C.No.1721/2012 passed by
2 CRL.A.No.200058/2015
the learned II-Addl. Civil Judge and JMFC-IV, Raichur and
convict the accused/respondent and imposed fine of double
the amount of the cheque in question and pass suitable
orders to compensate the complainant/appellant by
allowing the appeal, in the ends of justice.
This appeal having been heard and reserved on
23.08.2021, coming on for pronouncement of judgment
this day, J.M.KHAZI J., delivered the following:
JUDGMENT
Being aggrieved by the dismissal of complaint filed under Section 200 of Code of Criminal Procedure (hereinafter referred to as 'Cr.P.C.' for short), 1973, for the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter referred to as 'N.I.Act' for short), 1881, against the accused, complainant has filed this appeal under Section 378(4) of Cr.P.C.
2. After due service of notice, respondent has appeared through counsel.
3. For the sake of convenience, the parties are referred to their ranks before the Trial Court. 3 CRL.A.No.200058/2015
4. It is the case of the complainant that he and accused are friends living in the same neighborhood and for the business purpose, accused borrowed a sum of `.6,00,000/- from the complainant on 15.03.2011 and he promised to repay the same within one month, but failed to keep up the promise. On repeated request and demand, accused issued cheque dated 30.05.2011 for a sum of `.6,00,000/- drawn on State Bank of Hyderabad, Raichur Branch. When the same was presented through SBM, Raichur, it was returned with shara (endorsement) "insufficient funds". After issuing legal notice and complying due formalities and on failure of the accused to pay the amount due under the cheque, he filed the complaint.
5. In support of his case, complainant got himself examined as PW.1 and got marked documents at Exs.P1 to 6. On the other hand, accused has examined himself as DW.1 and on his behalf Exs.D1 to 13 were marked. 4 CRL.A.No.200058/2015
6. By the impugned judgment, the Trial Court has dismissed the complaint on the ground that the accused was able to rebut the presumption under Section 139 of N.I.Act, but the complainant has failed to discharge the onus placed on him that he had financial capacity to lend `.6,00,000/- to the accused.
7. The Complainant has challenged the impugned judgment and order on the following grounds:
i) The brother of complainant purchased 2 acres out of 6 acres of land from the father of accused and wanted to purchase the remaining extent of 4 acres, but the family of complainant was not ready to sell the remaining land and it lead to strained relationship between the complainant and the accused;
ii) Though accused admit issuance of the cheque in question, he has set up a false defence that 5 CRL.A.No.200058/2015 he issued the blank cheque to the complainant who is LIC agent towards payment of premium of LIC policies standing in his name and after the relationship became strained, he has chosen to misuse the said cheque to file false complaint;
iii) Accused has failed to prove both the defence taken by him, but the Trial Court has erred in holding otherwise;
iv) In the light of the presumption under Section 118 and 139 of N.I.Act, the complainant has discharged the burden placed on him.
8. In support of his case, the complainant has relied upon the following decision:
i) 2015(4) KCCR 2881 (SC) in case of T.Vasanthakumar vs. Vijayakumari (DB) 6 CRL.A.No.200058/2015
9. On the other hand, the learned counsel representing the accused has contended that presumption under Section 139 of the N.I.Act is that the cheque was drawn for discharge in whole or in part, of any debt or other liability and the said presumption does not extend to existence of a legally enforceable debt or liability and it is for the complainant to prove the same.
10. He would further submit that when the accused has specifically contended that complainant had no financial capacity to advance such huge sum of `.6,00,000/-, the burden was on the complainant to prove the same and in the present case the complainant has failed to discharge the said burden and therefore, rightly the Trial Court has dismissed the complaint. Having regard to the evidence placed on record, it is not a case for interference by this Court and prays to dismiss the appeal.
11. Heard arguments of both sides and perused the records.
7 CRL.A.No.200058/2015
12. It is not in dispute that complainant and accused are known to each other since long time and they were living in the same neighborhood. It has come in the evidence of complainant that he is a LIC agent by profession and accused is working in Bank. It has also come in the evidence that the father of the accused has sold 2 acres out of 6 acres of agricultural land to the brother of the complainant and in fact they wanted to purchase the entire 6 acres, but the father of accused refused to sell the remaining extent. While it is the specific case of the complainant that accused has borrowed a sum of `.6,00,000/- from him, the accused has taken up a specific defence that since some of his LIC policies had lapsed and as complainant is a LIC agent, he had issued a blank cheque to the complainant to pay the premium and after they refused to sell the remaining 4 acres of land, misusing the cheque in question, complainant has filed a false complaint. It is definite case of the accused that, complainant had no financial capacity to advance/lend `.6,00,000/- to him and in fact accused had no such 8 CRL.A.No.200058/2015 necessity of borrowing such huge sum of money from the complainant.
13. Even though the statutory presumption under Section 139 of N.I.Act that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability, is working in favour of the complainant, it is a rebuttable presumption and it is for the accused to prove otherwise. When the said presumption is rebutted by the accused, the burden shifts on the complainant to prove his financial capacity and the fact that the cheque in question was issued towards repayment of either in whole or in part of any debt or other liability. Now it is to be seen whether the accused has rebutted presumption under Section 139 of the N.I.Act, if so whether the complainant has discharged the onus that has shifted on him.
14. During the course of judgment, the learned Trial Judge has relied upon the decision in the case of Shiva Murthy vs. Amruthraj reported in ILR 2008 KAR 9 CRL.A.No.200058/2015 4629 wherein it is held that, initial burden is on the complainant to prove that there is legally recoverable debt from the accused and only after this burden is discharged, the Court can raise presumption that the cheque was issued to repay the said debt. In other words it is held that existence of legally recoverable debt is not a matter of presumption under Section 139 of N.I.Act. Based on this judgment, the Trial Court has held that the complainant has failed to discharge his initial burden and therefore, the presumption under Section 139 of N.I.Act cannot be raised. Of course, on appreciation of the oral and documentary evidence, the Trial Court has held that the complainant has failed to establish that he had financial capacity to advance a huge sum of `.6,00,000/- to the accused and that he had borrowed the said amount for his legal necessity.
15. In the decision of Shiva Murthy's case referred to supra reliance is placed on the decision of the Hon'ble Supreme Court in case of Krishna Janardhan 10 CRL.A.No.200058/2015 Bhat vs. Dattatraya G. Hegde (DB) reported in 2008 AIR SCW 738 SC wherein it is held that Section 139 of N.I.Act merely raises a presumption in favour of holder of cheque that the same had been issued for discharge of debt or other legal liability, but the existence of legally recoverable debt is not a matter of presumption under Section 139 of N.I.Act.
16. However, in this appeal the learned counsel representing the accused has relied upon the decision in the case of T.Vasanthakumar referred to supra wherein relying upon the full bench decision of the Hon'ble Supreme Court in the case of Rangappa vs. Sri Mohan reported in (2010) 11 SCC 441, it is held that the presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no 11 CRL.A.No.200058/2015 doubt that there is an initial presumption which favours the respondent-complainant. In view of the decision of the Hon'ble Supreme Court in the case of Rangappa and T.Vasanthakumar referred to supra, the decisions in Shiva Murthy and Krishna Janardhan Bhat's case referred to supra are no longer good law.
17. On the other hand, as held in the decision of T.Vasanthakumar's case referred to supra, which is relied upon the decision of the Hon'ble Supreme Court in the case of Rangappa referred to supra, the presumption under Section 139 of N.I.Act is not only to the effect that the cheque in question was issued towards discharge in whole or in part of any debt or other liability, but also includes presumption regarding the existence of a legally enforceable debt or liability, unless and until it is rebutted.
18. Now, with both presumptions acting in favour of the complainant, it is to be examined whether the accused has succeeded in rebutting the said presumption shifting the onus on the complainant to prove that he had 12 CRL.A.No.200058/2015 financial capacity to advance the amount under the cheque and in fact has advanced the same to the accused.
19. At the out set it is relevant to note that in the complaint, the complainant has pleaded that he had advanced the loan of `.6,00,000/- to accused for his business purpose. In fact, during the course of his examination-in-chief (which is tendered by way of affidavit) also he has stated that the purpose for which the accused borrowed `.6,00,000/- was for business. However, during the course of his cross-examination at page-4 of his deposition complainant has stated that accused borrowed the said sum for construction of house. Again during his further cross-examination dated 07.08.2013, the complainant has deposed that accused availed the loan for his transportation business i.e. to purchase and sell old cars. The complainant is not definite as to for what purpose he has advanced loan of `.6,00,000/-. As noted earlier accused is an employee of a bank. The complainant has neither proved that accused is 13 CRL.A.No.200058/2015 carrying on business of purchase and sell of old cars nor placed on record any evidence to show that at the relevant point of time accused was constructing any house, for which he was in need of money and accordingly borrowed the amount under the cheque.
20. Now coming to the specific defence taken by the accused that complainant had no financial capacity to advance a huge sum of `.6,00,000/- to him. On this aspect complainant has been cross-examined at length, wherein he has deposed that he is a LIC agent by profession and he paid `.6,00,000/- to the accused out of the commission amount received by him. In fact, during his cross- examination he has stated that the fact of he having received `.6,00,000/- by way of LIC commission is reflected in his income tax returns. Admittedly, complainant has not produced any document to show that at the relevant point of time or immediately prior to it he was in receipt of `.6,00,000/- or more by way of LIC 14 CRL.A.No.200058/2015 commission and was in a position to advance the same to the accused.
21. Learned counsel representing the accused submitted that since at the relevant point of time the father of accused has sold 2 acres out of 6 acres of land to the brother of the complainant for `.6,00,000/-, the accused was not in need of any financial help from the complainant and when father of accused refused to sell remaining 4 acres, misusing blank cheque which was issued for payment of LIC premium, complainant has filed false complaint against him.
22. On the other hand, learned counsel representing the complainant submitted that since brother of complainant has purchased 2 acres out of 6 acres of land and was ready to purchase remaining 4 acres of land, that itself goes to show that the complainant had financial capacity to lend `.6,00,000/- to the accused. 15 CRL.A.No.200058/2015
23. Neither the fact that father of accused sold 2 acres of land for `.6,00,000/- raises a presumption that accused was not in need to any financial assistance nor the fact that brother of the complainant had purchased 2 acres and was ready to purchase remaining 4 acres would raise a presumption in favour of the complainant to show that he had financial capacity. The fact that the family member of accused refused to sell remaining 4 acres may at the most be taken into consideration to hold that on account of such refusal the relationship between the complainant and accused became strained.
24. As already discussed, the complainant has failed to prove that at the relevant point of time he had financial capacity to advance loan of `.6,00,000/- to the accused and that accused was in need of such huge sum of `.6,00,000/- and borrowed the same from the complainant.
25. The next question is why complainant came in possession of the cheque at Ex.P1 which is admittedly 16 CRL.A.No.200058/2015 bears the signature of the accused and it is drawn on his account through his banker. The LIC statement at Ex.P6 as well as the renewal premium receipts at Exs.D1 to D7 and the letters at Exs.D8 and D9 for revival of policies standing in the name of accused supports his defence that he has issued the cheque in question which was blank to the complainant in order to enable him to calculate the premium that would be payable in respect of these LIC policies which were lapsed or in respect of which the premium was due.
26. As evident from Exs.D.11 to 13 after the sale of 2 acres in favour of brother of complainant a dispute arose between the purchaser and vendor regarding mutation entry and therefore, the purchaser had to file suit in O.S.No.223/2012. Of course ultimately it ended up in compromise. These documents supports the defence of the accused that on account of strained relationship between the parties, complainant misusing the blank cheque which was given to him has chosen to file this complaint. 17 CRL.A.No.200058/2015
27. After rebuttal of the presumption in favour of the complainant by the accused and failure of the complainant to prove his capacity to advance `.6,00,000/- to the accused and legal necessity of the accused to borrow such huge sum of money, the defence of the accused that the cheque in question was issued in blank towards payment of LIC premium to revive the policies is probabalized. In spite of the fact that the Trial Court has failed to raise a presumption that there exists a legally enforceable debt or liability in favour of the complainant, ultimately the Trial Court has come to a correct conclusion that the complainant has failed to discharge onus shifted on him and proceeded to acquit the accused.
28. Having regard to the facts and circumstances of the case and oral and documentary evidence placed on record, I am of the considered view that this is not a fit case to interfere with the finding arrived at by the Trial Court.
18 CRL.A.No.200058/2015
29. In the result, I proceed to pass the following:
ORDER The appeal filed by the complainant fails and accordingly it is dismissed.
Sd/-
JUDGE sdu