Bangalore District Court
B. M Rakesh vs Aged About 46 Years on 5 February, 2022
IN THE COURT OF THE LXXII ADDL. CITY CIVIL
& SESSIONS JUDGE AT MAYO HALL
BENGALURU, (CCH-73)
Present:
Sri.Abdul-Rahiman. A. Nandgadi,
B.Com, LL.B., (Spl.,)
LXXII Addl. City Civil & Sessions Judge, Bengaluru.
Dated this the 5th day of February, 2022.
Crl. Appeal. No.25159/2021
Appellant/ B. M Rakesh,
Accused:- Aged about 46 years,
S/o B. S Mohan,
R/at No.2/42, Mahadevpet,
Madikeri, Kodagu District,
Pin: 571201.
[By Sri. M. Madhvachar -Adv]
V/s
Respondent/ Sri. Ashok Somaiah,
Complainant: S/o Late M. G Somaiah,
Aged about 64 years,
R/at No.D-1, 1st Floor,
R & F Apartment,
7th Main, 2nd Cross,
HAL 2nd Stage, Indiranagar,
Bengaluru- 560 038.
(By Agraa Legal -Adv.)
2 Crl.Appeal.No.25159/2021
JUDGMENT
This Appeal is preferred by the Appellant/ Accused U/Sec. 374(2) of Cr.P.C, being aggrieved by the Judgment of conviction passed by the XXXIII Addl. CMM, Mayohall Unit, Bangalore in CC.No.52961 of 2017, dtd.18.08.2021, convicting the Appellant for the offence punishable U/Sec. 138 of NI Act, thereby sentencing him to pay fine of Rs.11,05,000/-. In-default to undergo Simple Imprisonment for a period of 6 months. Further directed to pay an amount of Rs.11,00,000/-, to the Complainant as compensation U/Sec. 357(1) of Cr.P.C, out of the fine amount.
2. The Brief facts leading to filing of the present appeal are:
The present Respondent filed a Complaint U/Sec. 200 of Cr.P.C. against the present Appellant, alleging that, he and the Appellant had entered into partnership agreement on 10.07.2014 for a period of one year commencing from 14.07.2017 to 30.06.2015, to engage and run the business, sale and marketing of Alcoholic and non Alcoholic drinks and related business, under the name "Quality MRP 3 Crl.Appeal.No.25159/2021 Shop", which was licensed in the name of Sri. C M Kumar. The Appellant approached him, requesting him to invest in the liquor business venture.
Accordingly, he paid a sum of Rs.10,00,000/- to him, as a capital, to run the said business, under partnership, on entering into a partnership deed dtd.10.07.2014. It was agreed by the Appellant that, the amount so invested by him would be repaid to him, alongwith accrued profits, if any, after a period of one year.
Further contends that, apart from investing the capital amount of Rs.10,00,000/-, he had paid an additional amount of Rs.10,50,000/- to the Appellant, towards increasing the business and for purchase of the products to be kept in the shop. This additional amount was not to be considered as a capital, under the partnership firm. The Appellant agreed to repay him the additional amount alongwith accrued profits, not being less than the interest @ 18% pa., In all, he paid an amount of Rs.20,50,000/- to the Appellant and to the firms account.
Further contends that, the Appellant did not adhere to the terms of partnership agreement, as well as to the terms of repayment of the additional 4 Crl.Appeal.No.25159/2021 amount with profits. On learning that the Appellant has made sufficient profits in the said business, he demanded the Appellant to repay investment amount and additional amount paid by him with profits. In discharge of payment of additional amount, the Appellant has issued two Cheques, bearing No.509666 dtd.15.09.2016 for Rs.5,00,000/-; and No.509667 dtd.30.05.2016 for Rs.5,00,000/-. The first Cheque was presented for its encashment through his banker, but the same was returned unencashed, with an endorsement "Insufficient Funds" on 17.05.2016. Similarly, second Cheque was also presented for its encashment through his banker, but the same was returned unencashed, with an endorsement "Insufficient Funds" on 02.06.2016. The same was intimated to the Appellant, wherein he requested him to represent the said Cheques for their encashment after first week of August 2016. Accordingly, the said Cheques were presented for there encashment through his banker, but the same were again returned unencashed, with an endorsement "Account Closed" on 11.08.2016. Thereafter he got issued a legal notice through his counsel by RPAD to the Appellant on 31.08.2016.
5 Crl.Appeal.No.25159/2021The said notice was received by the Appellant on 06.09.2016. The Appellant has not complied with the demand made under the said notice.
On completion of the stipulated period required under the statute, he was constrained to file the present Complaint against the Appellant/Accused for the offense punishable U/Sec.138 of N.I.Act.
3. On being satisfied, the Trial Court has issued summons U/Sec.204 of Cr.P.C., to the Accused on 27.04.2017. The Appellant appeared before the Trial Court on 16.02.2018 and he was enlarged on bail. Plea/Substance of Accusation of the Appellant/Accused was readover to the Appellant by the Trial Court on 16.02.2018, wherein the Appellant has pleaded not guilty and claims to be tried.
4. The Complainant inorder to prove his case got examined himself as P.W.1 and got marked 17- documents as Ex.P.1 to Ex.P17. PW1 was cross examined on behalf of the Appellant/ Accused on 21.02.2019 and 12.03.2021.
6 Crl.Appeal.No.25159/2021Statement of the Accused/ Appellant U/Sec. 313 of Cr.P.C., was recorded by the Trial Court on 08.04.2019. The Appellant / Accused has led his evidence as DW.1 on 31.07.2019 and got marked 07- documents as Ex.D1 to Ex.D7. DW.1 was cross examined on behalf of the Complainant on 11.12.2020.
On hearing both the sides, the Trial Court has passed the Judgment, convicting the Accused for the offence punishable U/Sec. 138 of N.I. Act on 18.08.2021. Hence, the Appellant is before this Court, being aggrieved by the said Judgment of conviction.
5. The Appellant has preferred this Appeal. On preferring the Appeal by the Appellant/Accused, this Court has suspended the sentence under appeal, for a period of three months, initially on 17.09.2021. Notice of the Appeal memo and I.A.No.1/2021 was issued to the Respondent and TCR were called-for. Respondent set-in his appearance on 01.12.2021. TCR were secured on 01.12.2021.
7 Crl.Appeal.No.25159/20216. Heard the Arguments of the Learned Counsels for the Appellant and the Respondent on the main appeal.
The Learned Counsel for the Appellant has placed his reliance on the decision of the Hon'ble High Court of Madras, in the case of Sudharshan and Anr., V/s S Rajasoundaram, (Crl.OP (MD) No.3491/2017 and 2613/2017, D/d 17.10.2019).
7. The Appellant has preferred this appeal on the following grounds:
Grounds of Appeal:
a) The Trial Court has gravelly erred in convicting the Appellant for the offence punishable U/Sec. 138 of N.I. Act, which is manifestly erroneous and opposed to the facts and circumstances of the case;
b) The Trial Court has miserably failed to appreciate the oral and documentary evidence on record, in a proper and perspective manner;
c) The Trial Court has failed to consider that, the Appellant had issued both the Cheques as security to the Respondent, on payment of investment amount;8 Crl.Appeal.No.25159/2021
d) The Trial Court has failed to consider that, the investment amount is neither a debt, nor a liability, to attract Sec.138 of NI Act;
e) The Trial Court has failed to consider that, the Respondent is entitle to receive investment amount of Rs.10,00,000/- after rendition of accounts, as required U/Sec 12 and 13 of the Partnership Act;
f) The Trial Court has failed to consider that, no any license was obtained under the Partnership inbetween the Complainant and the Accused, but the license was in the name of C. M Kumar;
g) The Trial Court has failed to consider that, the Partnership Firm created inbetween Complainant and the Accused was an unregistered partnership firm, so no liability can be charged on the Accused;
h) The Trial Court has failed to appreciate the documentary evidence produced by the Accused marked at Ex.D1 to Ex.D7;
i) The Trial Court has erred in convicting the Accused for the offence punishable U/Sec.138 of NI Act, on holding that, the Accused has failed to rebut the presumption available to the Complainant, U/Sec.139 of NI Act.
Hence, prayed to allow the said appeal and setaside the Judgment of Conviction passed by the Trial Court.
9 Crl.Appeal.No.25159/20218. Following points arise for my consideration;
1. Whether the Respondent/ Complainant is entitle for the benefit of presumption available U/Sec. 139 of N.I. Act?
2. Whether the Appellant/ Accused proves on the basis of preponderance of probabilities that the Cheques-Ex.P1 and Ex.P2 were issued by him, as security, towards the investment amount invested by the Complainant?
3. Whether the Trial Court is right in holding that, the Appellant/Accused has failed to rebut the presumption available U/Sec. 139 of N.I. Act?
4. Whether the Appellant/ Accused shows that the Order of Conviction and Sentence recorded by the Trial Court in CC.No.52961 of 2017, dtd.18.08.2021, deserves to be setaside, and thereby call for the interference of this Court?
5. What Order?
9. My finding on the above points are as under:
Point No.1 : In the Affirmative;
Point No.2 : In the Negative;
Point No.3 : In the Affirmative;
Point No.4 : In the Negative;
Point No.5 : As per final order for the following :10 Crl.Appeal.No.25159/2021
REASONS
10. The rank of parties will be referred to, as they were before the Trial Court.
11. Point No.1:-
The Complainant has filed a Complaint U/Sec. 200 of Cr.P.C. alleging that the Accused has issued Cheques-ExP1 and Ex.P2, towards discharge of debt.
When the said Cheques were presented for their encashment for the first time, they were returned unencashed with an endorsement "Funds Insufficient". Thereafter again as per the request of the Accused the said Cheques were presented for their encashment, but again the same have been returned un-encashed with an endorsement 'Account Closed' on 11.08.2016, as per Ex.P3 and Ex.P4. Thereafter he has got issued a legal Notice dtd.31.08.2016 to the Accused by RPAD, as per Ex.P5, postal receipt-Ex.P6, and speed post acknowledgment at Ex.P7.
12. On the basis of the documents produced by the Complainant and the preliminary evidence led by the Complainant, the Trial Court has issued 11 Crl.Appeal.No.25159/2021 summons to the Accused U/Sec.204 of Cr.P.C., on 27.04.2017. Perused the said orders, do not find any error in the said order of the Trial Court.
13. The Accused has appeared before the Trial Court on 16.02.2018 and he was enlarged on bail. Substance of Accusation/Plea was recorded by the Trial Court on 16.02.2018. Perused the said Plea, do not find any error in the said Plea, recorded by the Trial Court.
14. Coming to the ocular evidence, on point of issuance of the Cheques-Ex.P1 and Ex.P2, more specifically, cross examination of DW.1, at Page No.5, Para No.3, Line Nos.1 to 7, which reads as under;
"....Ex.P1 and Ex.P2 cheques are belongs to my account, Ex.P1(a) and Ex.P2(a0 are my signatures. it is true to suggest that the contents of Ex.P1 and Ex.P2 were filled by me. I have issued both the cheques Ex.P1 and Ex.P2 to the complainant at the time of opening the firm i.e., in the year 2014 as a security purpose. It is true to suggest that there is no mention of issuance of Ex.P1 and Ex.P2 cheques for security purpose. ...."
As per this evidence, the Accused/DW.1 admits that, Ex.P1 and Ex.P2- Cheques belongs to him and 12 Crl.Appeal.No.25159/2021 the signature found on the said Cheques, belongs to him.
14.01. As per the above ocular evidence, more specifically, the admission given by the Accused, it can be said that, the Accused has admitted that the Cheques-Ex.P1 and Ex.P2 belongs to him and the signatures found on them, also belongs to him.
15. Thus the Complainant has proved the initial burden casted upon him U/Sec.138 of N.I. Act, to show that, the Cheques-ExP1 and Ex.P2 belongs to Accused and the signatures on the said Cheques, are that of the Accused.
16. On viewing the amount of oral evidence with the documentary evidence i.e., Ex.P.1 to Ex.P7, which will suffice the Complainant, to have benefit of presumption available U/Sec.138, 139 of N.I. Act.
16.01. As per the trite principle of law, dealing with the presumption U/Sec.138 & 139 of N.I.Act and as per the dictum laid down by the 13 Crl.Appeal.No.25159/2021 Hon'ble Apex Court in the case of K. Subramani V/s K. Damodara Naidu, reported in 2014 (12) SCALE 677, as well as in the case reported in (2010) 11 SCC 441, wherein it is held that, "Presumption U/Sec.139 of N.I.Act accrues to the benefit of the Complainant, unless the Accused rebut that presumption".
16.02. Now it is for the Accused to rebut the said presumption, available to the Complainant U/Sec.139 of N.I.Act.
Hence, I answer POINT NO.1 IN THE
AFFIRMATIVE.
17. POINT NO.2:
The defence takenup by the Accused is that, he had issued the Cheques-Ex.P1 and Ex.P2 to the Complainant, as security, for the amount invested by the Complainant. This type of defence can be seen as per the examination- in -chief of DW.1, at Page No.3, Line Nos.3 to 6, which reads as under:-
"... The cheque involved in this case has been given to complainant as a security in the business. The said cheque was blank signed cheque. ..."14 Crl.Appeal.No.25159/2021
17.01. The Complainant has denied that, the Accused has issued the Cheques-Ex.P1 and Ex.P2, as security for having received the amount, as investment. This type of denial by the Complainant can be found, more specifically,
a) cross-examination of PW.1, at Page No.2, Para No.2, Line Nos.1 and 2, which reads as under:-
"It is false to suggest that for my payment of Rs.10 lakhs this Accused has issued two cheques for Rs.5 lakhs each as a security. ..."
b) cross-examination of DW.1, at Page No.5, Para No.3, Line Nos.7 to 14, which reads as under:-
"...I issued these Ex.P1 and Ex.P2 cheques to the complainant for the purpose that the complainant had invested Rs.10,00,000/- in the firm. I have not received any cheques from the complainant for the sake of security for my invested amount in the firm. It is false to suggest that the Ex.P1 and Ex.P2 cheques were not issued for security and I am deposing falsely that which were issued or security to the complainant. ..."
17.02. When the Complainant has denied the fact of, Accused issuing the Cheques to him, as security, then it is for the Accused to prove the 15 Crl.Appeal.No.25159/2021 existence of the said fact, on the basis of preponderance of probabilities.
18. The Learned Counsel for the Appellant would contend that, the Investment amount, invested by the Complainant in a Partnership firm with the Accused cannot be termed as a debt or a liability, within the meaning of Sec.138 of NI Act.
18.01. The Learned Counsel for the Respondent would contend that, initially an amount of Rs.10,00,000/- was invested by the Complainant with the Accused, under the Partnership firm; and thereafter he has given an additional amount of Rs.10,50,000/- to the Accused, for purchase of the materials, not as an Investment or part of the capital amount, under the Partnership transaction. So it is not an investment, but a hand loan to the Accused. Towards part repayment of which, the Accused has issued the Cheques-Ex.P1 and Ex.P2.
18.02. On careful perusal of the Complaint lodged by the Complainant before the Trial Court, it is seen that, as per Para Nos.6 and 7 of the 16 Crl.Appeal.No.25159/2021 Complaint, the Complainant contends that, he has paid an additional amount of Rs.10,50,000/- to the Accused, which shall not be the part of the Partnership Firm, as a capital.
18.03. Further the Learned Counsel for the Respondent would contend that, the Complainant has paid the said additional amounts to the Accused on 09 occasions.
18.03.01. The Complainant has produced the RTGS Customer's Counterfoils at Ex.P9 to Ex.P17.
As per Ex.P9, it is seen that, the Complainant has applied for transfer of an amount of Rs.2,00,000/- from his account to the joint account belonging to him and the Accused, bearing No.64145877377, on 30.03.2015.
As per Ex.P10, it is seen that, the Complainant has applied for transfer of an amount of Rs.3,00,000/- from his account to the joint account belonging to him and the Accused, bearing No.64145877377, on 26.07.2015.
17 Crl.Appeal.No.25159/2021As per Ex.P11, it is seen that, the Complainant has applied for transfer of an amount of Rs.1,50,000/- from his account to the joint account belonging to him and the Accused, bearing No.64145877377, on 31.07.2014.
As per Ex.P12, it is seen that, the Complainant has applied for transfer of an amount of Rs.1,00,000/- from his account to the joint account belonging to him and the Accused, bearing No.64145877377, on 05.08.2014.
As per Ex.P13, it is seen that, the Complainant has applied for transfer of an amount of Rs.1,00,000/- from his account to the joint account belonging to him and the Accused, bearing No.64145877377, on 12.08.2014.
As per Ex.P14, it is seen that, the Complainant has applied for transfer of an amount of Rs.1,50,000/- from his account to the joint account belonging to him and the Accused, bearing No.64145877377, on 18.08.2014.
As per Ex.P15, it is seen that, the Complainant has applied for transfer of an amount of Rs.2,00,000/- from his account to the joint account 18 Crl.Appeal.No.25159/2021 belonging to him and the Accused, bearing No.64145877377, on 25.08.2014.
As per Ex.P16, it is seen that, the Complainant has applied for transfer of an amount of Rs.1,00,000/- from his account to the joint account belonging to him and the Accused, bearing No.64145877377, on 25.08.2014.
As per Ex.P17, it is seen that, the Complainant has applied for transfer of an amount of Rs.3,00,000/- from his account to the joint account belonging to him and the Accused, bearing No.64145877377, on 26.09.2014.
18.03.02. Coming to the ocular evidence on this point, more specifically, cross-examination of PW.1, at Page No.5, Line Nos.3 to 12, which reads as under:-
".... It is false to suggest that the amount paid me to the accused as per Ex.P9 to Ex.P17 was for purchase the products of wine shop, the witness volunteers that both to purchase products as well as for loan to the accused, I paid the sum referred in Ex.P9 to Ex.P17. Since the accused has not questioned the alleged advancement of loan in earlier occasion, as such I did not refer these documents in my complaint. It is true to suggest that the Ex.P1 and Ex.P2 cheques 19 Crl.Appeal.No.25159/2021 were issued by the accused in favour of me towards repayment of my investment made for establishment of shop."
As per this evidence, the Complainant /PW.1 admits that, Complainant /PW.1 admits that, while issuing legal notice-Ex.P9 to Ex.P17 documents were with him, since the said documents were not asked by his Advocate, he has not stated about the said documents in the legal notice. Further denies the suggestion made to him that, the said amount was paid by him to the Accused for purchase of the product of wine shop, but he contends that, the said amount were paid by him to the Accused, both towards purchase the products as well as, as a loan to the Accused. The said documents could not be referred, as the Accused had not question the alleged advancement of loan in the earlier occasion. Further affirms to the suggestion made to him on behalf of the Accused that, Ex.P1 and Ex.P2- Cheques were issued by the Accused in his favour towards repayment of his investment made for establishment of shop.
As per the last suggestion made to the Complainant on behalf of the Accused, it amounts to admission on the side of the Accused that, Cheques-
20 Crl.Appeal.No.25159/2021Ex.P1 and Ex.P2 were issued by the Accused infavour of the Complainant towards his investment, made for establishment of shop.
Firstly, this suggestion runs contrary to the defence taken up by the Accused that, Ex.P1 and Ex.P2- Cheques were issued, as security, for having invested the amount (investment).
Secondly, as per this suggestion the Accused admits that, Ex.P1 and Ex.P2- Cheques were given towards investment made for establishment of shop and not as an investment, under the Partnership Firm.
18.04. Thus, as per the above ocular and documentary evidence, it can be concluded that, Ex.P1 and Ex.P2- Cheques were issued by the Accused towards investment, made for establishment of shop and not towards security.
18.05. Sec.138 of NI Act, reads as under:-
"138 Dishonour of cheque for insufficiency, etc., of funds in the account:- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that 21 Crl.Appeal.No.25159/2021 account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 19 [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, 20 [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."
22 Crl.Appeal.No.25159/202118.06. When the Cheques-Ex.P1 and Ex.P2 were issued by the Accused towards investment, made for establishment of shop, then the same will form debt or other liability, as provided U/Sec.138 of NI Act.
Under such circumstances, the act of issuance of such Cheques-Ex.P1 and Ex.P2, will come within ambit and purview of Sec.138 of NI Act.
18.07. Thus, I do not find any force in the contention raised by the Learned Counsel for the Appellant, in this behalf. Hence the same is turned down.
19. Secondly, the Learned Counsel for the Appellant would contend that, recovery of Rs.10,00,000/- paid by the Complainant to the Accused, as investment, cannot be termed to be a legally enforceable debt, as recovery of such amount is to be made after rendition of the accounts, as provided U/Sec.12 and 13 of the Partnership Act. He has placed his reliance on the decision of the Hon'ble High Court of Madras, in the case of 23 Crl.Appeal.No.25159/2021 Sudharshan and Anr., V/s S Rajasoundaram, (Crl.OP (MD) No.3491/2017 and 2613/2017, D/d 17.10.2019), wherein it is observed in Para Nos.8 to 10 and held in Para No.12, as under:-
"8. Section 11 of the Partnership Act, 1932 specifically provides for determination of the rights and duties of the partners by contract between the partners. The wordings under Section 11 of the Partnership Act makes it very clear that, the relationship of the partners shall be determined by the contract between them, subject, of course to the provisions of the Act. In this case, there was a specific contract between the parties by way of entering into the partnership deed and the same provided for the manner in which rights and liabilities shall be determined between the parties.
9. It is also relevant to take note of Section 13 of the Partnership Act, 1932 which deals with the mutual rights and liabilities between the partners. The nature of the liabilities in between the Firm and the partner is joint and several. http://www.judis.nic.in Crl.O.P.(MD).No.3491 of 2017.
10. If the respondent was not happy in the manner in which the business was run by the other partners, he should have worked out his remedy by seeking for dissolution of Firm or for rendition of accounts and for the settlement of his share / contribution which he invested at the time of entering the Partnership Firm . Till the share of the respondent is determined in relation to the profits and losses incurred by the Firm, there 24 Crl.Appeal.No.25159/2021 is no question of the respondent claiming for the entire contribution made by him at the time of entering into the Partnership Firm.
12. In the considered view of this Court, the respondent is not entitled to maintain the complaint under Section 138 of the Negotiable Instruments Act against the Firm and its partners, since there was no determined debt / liability on the date of the alleged http://www.judis.nic.in Crl.O.P.(MD).No.3491 of 2017 drawal of cheque in his favour. Therefore, the private complaint filed by the respondent is an abuse of process of Court and the same cannot be sustained in the eye of law."
19.01. As observed supra; and as per the admission in the form of suggestion, on behalf of the Accused that, Cheques-Ex.P1 and Ex.P2 are issued towards investment, made for establishment of shop, then under such circumstances, it can be said that, the said Cheques-Ex.P1 and Ex.P2 were issued towards additional amount received by the Accused, under Ex.P9 to Ex.P17. Then under such circumstances, it can be concluded that, issuance of Cheques-Ex.P1 and Ex.P2, will not be inrespect of capital amount invested under the Partnership Firm, but inrespect of the additional amount given by the Complainant to the Accused.
25 Crl.Appeal.No.25159/2021Secondly, when the Cheques-Ex.P1 and Ex.P2 are admittedly given by the Accused to the Complainant, towards investment made for establishment of shop, then it is a determinable debt and it cannot be termed as undetermined debt, which is required to determined on rendition of the accounts, U/Sec.12 and 13 of the Partnership Act.
19.02. Thus, even this contention of Learned Counsel for the Appellant holds no water.
20. Thirdly, the Learned Counsel for the Appellant would contend that,
a) no license was obtained either by the Accused or by the Complainant, or by the Partnership firm of the Accused;
b) the Partnership Firm was an unregistered Partnership Firm, so the Accused cannot be charged under the said Partnership Firm, as there is neither enforceable debt, nor it is legal.
20.01. On careful perusal of the averments made by the Complainant in the Complaint, more 26 Crl.Appeal.No.25159/2021 specifically at Para Nos.3 and 4, it can be seen that, the Accused and the Complainant have entered into a Partnership Agreement, engage and to run the business of sale and marketing of Alcoholic and non- Alcoholic drinks, under the name 'Quality MRP Shop' which is licensed in the name of C. M Kumar; and the said C. M Kumar has sold the said license to the Accused.
20.02. Coming to the documentary evidence, on this point. The Accused has produced the documents at Ex.D1 to Ex.D7.
As per this documents, it is seen that,
a) Excise Department, Government of Karnataka has issued the license to C. M Kumar, to run a shop for vending and sale of Indian and Foreign Liquor.
b) said C. M Kumar has entered into an agreement with the Accused, as per Agreement dtd.07.07.2012- Ex.D4.
20.03. It remains an undisputed fact that, the license was in the name of C. M Kumar and he 27 Crl.Appeal.No.25159/2021 has entered into an Agreement with the Accused, as per Ex.D4.
20.04. Coming to the ocular evidence, on this point, more specifically,
a) cross-examination of PW1 at Page No.1, Para No.1, which reads as under:-
"When it is questioned to the witness that when you have entered into an partnership agreement with the accused ; the witness said that he has entered into an partnership agreement in the year 2014. We have entered into said partnership agreement to do the retail liquor business. When it is questioned to the witness that have you obtained the business license from the State Government in the name partnership firm ; the witness said that they do not had the direct liquor license to do the business. It is true that the liquor license was in the name of Sri. C.M. Kumar. The witness volunteers that said C.M. Kumar sub-leased the said liquor license to the accused. the said sub- ease was not approved by the Government. It is true that without obtaining the license in the name of partnership firm from the State Government that partnership firm cannot carry out said liquor business."
b) cross-examination of DW1 at Page No.4, Line Nos.1 to 5, which reads as under:-
"It is true to suggest that, I and the Complainant were together have opened a 28 Crl.Appeal.No.25159/2021 Partnership Firm for the purpose to run a wine shop in the name and style of Quality MRP Shop. It is true to suggest that the said wine shop was running under the license of C. M. Kumar. ..."
20.05. Thus, as per the above referred documentary and oral evidence, it can be concluded that, the Accused has entered into an Agreement with C. M Kumar, the Excise licensee to run his business, as per Ex.D4.
21. It is true for the Learned Counsel for the Appellant to contend that, the Partnership inbetween the Complainant and the Accused is an unregistered, but as per the admission in the form of suggestion made to the Complainant on behalf of the Accused that, Ex.P1 and Ex.P2- Cheques have been issued towards investment made for establishment of the shop and not towards the capital raised under the Partnership Firm, then under such circumstances, registration and non registration of the Partnership Firm will not come in the way of enforcing the debt by the Complainant, U/Sec.138 of NI Act.
29 Crl.Appeal.No.25159/2021Hence, both the contentions taken up by the Learned Counsel for the Appellant, has been answered accordingly.
22. Thus, looking to the materials on record, it can be concluded that, the Accused has utterly failed to prove the existence of fact that, he has issued the Cheques-Ex.P1 and Ex.P2 to the Complainant, as security, for obtaining the investment amount, as capital, under the Partnership Firm, set up inbetween him and the Complainant.
Hence, I answer POINT NO.2 IN THE NEGATIVE.
23. POINT NO.3:-
I have carefully gone through the Judgment of the Trial Court, more specifically, at Para No.18 to 21, the Trial Court has rightly come to the conclusion that, the Accused has failed to rebut the presumption available to the Complainant.
Thus the defence of the Accused, cannot be believed, as the same is not fortified with cogent evidence/material on record.
24. As per the decision of the Hon'ble Apex Court, in the case of APS Forex Services Pvt.
30 Crl.Appeal.No.25159/2021Ltd., V/s Shakthi International Fashion linkers & others, wherein it is held that;
"When the financial capacity of the Complainant is questioned in support of probable defence, despite presumption U/Sec. 139 of the N.I. Act, withregard to the existence of legally enforceable debt, the onus shifts on the Complainant to prove the financial capacity. Under such circumstances, complainant is required to prove his financial capacity, inorder to raise the presumption available U/Sec. 139 of N.I. Act, in his favour".
24.01. Further, as per the decision of the Hon'ble Apex Court, in the case of Basalingappa V/s Mudibasappa, reported in (2018) 5 SCC 418, wherein it is held that;
"Appellant disputing financial capacity of the Complainant to pay the amount, by leading cogent evidence to prove it, leads to the Accused probablising his defence, then burden would be on the Complainant to establish his financial capacity".
24.02. Applying the above principles of law to the instant case at hand, it is seen that, in the present case, though the Accused has questioned the transaction inbetween him and the Complainant and issuance of Cheques-Ex.P1 and Ex.P2 by him to the 31 Crl.Appeal.No.25159/2021 Complainant, but the same is not been fortified with cogent evidence. Hence, the said stand of the Accused is not acceptable.
25. Unless the Accused leads cogent evidence to these effect, the defence of the Accused will not become probable, but it will be merely a pulpable defence, which will not be sufficient to discharge his duty to rebut the presumption available U/Sec. 139 of the N.I. Act, to the Complainant.
26. Thus, as per the above oral and documentary evidence, it can be said that, the Accused has taken various stands in his defence. On looking to the line of defences and the various contentions takenup by the Accused, in his evidence, the version of the Accused is not inspiring the confidence of this Court. Hence, the contention of the Appellant/Accused cannot be accepted at all.
27. Considering the inconsistent contentions raised by the Accused in the cross examination of PW1 and the evidence led by the him as DW.1, it can be said that, the stands takenup by the Accused, is not fortified with cogent evidence, on the basis of 32 Crl.Appeal.No.25159/2021 preponderance of probabilities, inorder to rebut the presumption available to the Complainant, U/Sec 139 of NI Act. So, in the absence of material evidence, the different and distinct stands, taken up by the Accused, cannot be accepted at all.
28. Thus, the presumption available to the Complainant U/Sec. 139 of N.I. Act, has remained unrebutted, from the side of the Appellant/Accused. Hence, presumption available to the Complainant U/Sec.139 of N.I.Act stands unrebutted. I have gone through the Judgment of the Trial Court, more referred to supra. Rightly the Trial Court has concluded that, the Accused has failed to rebut the presumption available to the Complainant U/Sec.139 of N.I.Act.
Hence, I ANSWER POINT NO.3 IN THE AFFIRMATIVE.
29. POINT NO.4:
Under these circumstances, there is no any hurdle to derive the presumption available to the holder of the cheque U/Sec.118 as well as U/Sec. 139 of N.I.Act. I find force to my above opinion as per 33 Crl.Appeal.No.25159/2021 the decision of Hon'ble Apex Court in the case of Hiten Pidalal V.s Bratindranath Banergi reported in 2001 Crl.L.J. 4647 (Supreme Court) as well as in the case of M.S.Narayan Menon @ Mani V/s State of Kerala and Another reported in 2006 SAR.Crl.616 and in the case of Krishna Janardhan Bhat V/s Dattatreya G. Hegde reported in (2008)2 SCC Crl. 166. Rightly, the Trial Court has considered all these aspect and there is no any fault on the part of the Trial Court. I do not find any force in the submission of the learned counsel for the Appellant.
30. Further the Statement of the Accused is recorded by the Trail Court U/Sec 313 of CrPC on 18.04.2019, it covers the entire incriminating substance, brought on record by way of evidence, against the Accused. The Trial Court has examined the Accused U/Sec. 313 of Cr.P.C. I have gone through the statement of the Accused recorded by the Trial Court U/Sec. 313 of Cr.P.C., and the reply given by the Accused, to the said questions, in the statement. I do not find any fault in the statement of 34 Crl.Appeal.No.25159/2021 the Accused, recorded by Trial Court U/Sec 313 of Cr.P.C.
31. I have carefully gone through the reasonings given by the Trial Court, while awarding compensation to the Complainant U/Sec.357 of Cr.P.C. I do not find any error or material irregularity in the said findings.
32. Further inorder to conclude, the Hon'ble High Court of Kerala has held in General Auto Sales Vs Vijayalakshmi, reported in 2005(1) KLT 478 in Paragraph No 8 thereof, that:
"Even if a blank signed cheque has been given towards liability or even as security, then the liability subsists and quantified, if the cheque is filled up and presented to the Bank, the person who had drawn the cheque, cannot avoid the criminal liability under Section 138 of NI Act".
32.01. Further the Hon'ble Apex Court has held in Rangappa Vs Sri Mohan, reported in (2010) 11 SCC 441, that;
"Once issuance of cheque and signature thereon are admitted, 35 Crl.Appeal.No.25159/2021 presumption of a legally enforceable debt infavour of the holder of the cheque arises. It is for the Accused to rebut the said presumption, though Accused need not adduce his own evidence and can rely upon the material submitted by the Complainant. However, mere statement of the Accused may not be sufficient to rebut the said presumption".
33. In this case, there was really presumption available infavour of the Complainant in terms of Section 138 & 139 of Negotiable Instruments Act, against the Accused and the Accused has not discharged his burden to rebut that presumption.
34. The Trial Court has considered all the aspects, the grounds taken up by the Accused, as defence. The Order of the Trial Court in awarding compensation to the Complainant, is also wel- reasoned.
35. When no fault is committed by the Trial Court, in coming to the conclusion, convicting the Accused for the offence punishable U/Sec 138 of NI Act, interference to that effect, by this Court does not arise at all.
36 Crl.Appeal.No.25159/202136. Thus, I decline to interfere with the findings recorded by the Trial Court.
37. Necessarily the prosecution succeeds. The conviction is therefore confirmed, as the accused is found guilty of the offence punishable under Section 138 of Negotiable Instruments Act. The Accused is hereby directed to pay the amount of compensation, as ordered by the Trial Court.
Hence, for the above reasons I am constrained to answer POINT NO. 4 IN THE NEGATIVE.
38. POINT NO. 5:
For having answered Point Nos.1 & 3 in the Affirmative; Point Nos.2 and 4 in the Negative, I proceed to pass the following:
ORDER Acting U/Sec.386 of Cr.P.C., the Appeal preferred by the Appellant/Accused is hereby Dismissed.
In the consequences, the order of conviction passed by the Learned XXXIII Addl. CMM, Bengaluru in C.C.No.52961 of 2017, 37 Crl.Appeal.No.25159/2021 dtd.18.08.2021, recording conviction of the Accused, is hereby confirmed.
The order of suspension passed by this Court U/Sec.389 of Cr.P.C. stands revoked.
The Trial Court shall execute its order, as per law.
No order as to costs.
In case, if the Appellant/Accused has deposited the amount, as directed U/Sec. 148 of N.I. Act, the same may be dealt with, as per Law U/Sec. 143 of the said Act.
Remit the TCR to the Trial Court, on obtaining necessary acknowledgment, from it, alongwith the copy of this Judgment.
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(Dictated to the Stenographer directly on computer system, computerized by her and print out taken by her, after correction, signed and pronounced by me, in the open court on this the 5th day of February, 2022.) [Abdul-Rahiman. A. Nandgadi] LXXII Addl.City Civil & Sessions Judge, Bengaluru. (CCH-73)