Bangalore District Court
Mrs.Aruna Unnikrishnan vs Jose Francis on 31 March, 2016
IN THE COURT OF THE LII ADDL.CITY CIVIL & SESSIONS
JUDGE: AT BANGALORE CITY (CCH-53)
Dated this the 31st day of March, 2016
PRESENT: Smt.Yadav Vanamala Anandrao, B.Com., LL.B (Spl.,)
LII Addl. City Civil & Sessions Judge,
Bengaluru City.
: CRIMINAL APPEAL NO. 120/2014 :
APPELLANT : Mrs.Aruna Unnikrishnan
W/o Sukumar Unnikrishnan
NO.1917, 8th cross,
4th main, HAL 2nd Stage,,
Bangalore - 560 075.
(By Smt.C.G.Ashadevi,
Advocate)
-V/S-
RESPONDENT : Jose Francis
S/o. K.D.Francis,
Aged about 30 years,
Residing at No.1808,
2nd floor, Above Axis road,
BEML main road,
Bangalore - 560 075.
(By Sri. M.A.Sebastian, Advocate)
JUDGMENT
This criminal appeal is preferred by the appellant/accused under section 374(3) of Cr.P.C., for setting aside the conviction judgment and order of sentence passed in CC No.117/2010, dated 09.01.2014 by the XIII ACMM., 2 Crl.A.No.120/2014 Bangalore City, sentencing him to pay Rs.3,55,000/- and in default to undergo simple imprisonment for 6 months.
2. For the sake of convenience, the parties are referred to their rank before the trial court.
3. The brief facts of the case before the trial Court, as the complainant being a business man in supplying and maintaining the inverters, batteries, solar water heater and other related materials and during the course of business the accused had taken service and introduced his friends. The accused approached the complainant for financial assistance of Rs.8,50,000/- to meet her financial commitments and received the amount in the month of August, 2008 to return the loan within a month after receipt of the same. But she failed to comply with his promise even after demand made by the complainant and issued the consideration receipt and demand promissory note for Rs.8,50,000/- by and on behalf of her husband, but failed to return the loan amount, towards the repayment of loan amount she has issued a cheque bearing No.484610 dated 29/09/2009 for Rs.3,50,000/- and another cheque bearing No.407599 dated 02/10/2009 for Rs.3,00,000/- drawn on The South Indian Bank Ltd., 3 Crl.A.No.120/2014 Bengaluru and on presentation it was dishonoured as "funds insufficient" on 08/10/2009, hence complainant issued a notice dated 13/10/2009 through RPAD and UCP. The RPAD endorsement was 'not claimed'. Inspite of service of notice, accused has not complied as against the notice. Hence, the complainant is constrained to file a private complaint before the XIII ACMM, Bengaluru under Section 138 of NI Act.
4. After taking cognizance of the offence and service of summons, accused appeared through her counsel and she was released on bail. The plea was recorded as the accused pleaded not guilty of the alleged offence and claimed to be tried. Hence, complainant examined himself as P.W-1 and got marked documents Ex.P.1 to Ex.P.32. Thereafter, the case was posted for recording of Section 313 of Cr.P.C. The incriminating evidence of witness has been denied and the accused herself got examined as DW-1 and got marked document Ex.D.1.
5. The trial Court has considered about the disposal of the case stating that provision under Section 260 sub clause (2) of Cr.P.C, when it is desirable to try as summarily and also considering the nature of the trial, it was considered not a fit 4 Crl.A.No.120/2014 case to dispose off the matter within 6 months. As the cognizance was taken on 25/11/2009 and the learned trial Judge had taken the charge when the case was posted for arguments and the trial was completed during the tenure of his predecessor in office and considering it not just and necessary to recall the witness for further cross-examination or chief-examination. By converting it as summary trial into summons trial as provided under Section 262 of Cr.P.C and thereby following the procedure for summons trial and heard the arguments considering it as summons trial and formulating the points for consideration and appreciating the evidence on record and passed the conviction order against the accused.
6. Hence, aggrieved by the conviction judgment and order on sentence, accused/appellant has preferred this appeal urging the ground that impugned judgment passed by the learned Magistrate under Section 138 of NI Act is illegal, improper, arbitrary one and that the learned Magistrate has committed grave error ignoring the defence taken by the complainant by producing the materialistic documents which reveals that appellant was not in need of money. In the 5 Crl.A.No.120/2014 month of August, 2008, she had not borrowed the money from the complainant as contended by him. Even on merits, the learned Magistrate has committed error in passing the impugned judgment and it has suffered from material irregularities in law. Hence, it is liable to be set aside. It is based on evidence of complainant and ignoring the material defence taken by the appellant/accused. The sentence passed by the Court below is exaggeration and liable to be set aside. Hence, it is prayed to allow the appeal.
7. After registering the case and issuance of notice to the respondent, the respondent/complainant appeared through his counsel. The LCR called for. After receiving the LCR, heard the arguments of the learned counsels for the respective parties. Perused the appeal memorandum, LCR and record on hand.
8. The following points formulated for consideration of this Court are:
1. Whether the trial court has committed an error in passing conviction judgment and order of sentence under Section 138 of N.I. Act in C.C.No.117/2010, dated
09.01.2014?
6 Crl.A.No.120/2014
2. Whether the interference of this Court is necessary to set aside the conviction judgment passed in C.C.No.117/2010, dated 09.01.2014?
3. What order?
9. My answers to the above points are as under:
Point No.1: In the affirmative.
Point No.2: In the affirmative.
Point No.3: As per final order
for the following:
: REASONS:
10. Points No.1 & 2:- These points are interlinked with
each other. Hence they are taken up for common discussion to avoid repetition facts and circumstances of the case. This appeal is preferred by the accused/appellant aggrieved, by the conviction judgment and order of sentence passed by the trial Court under Section 138 of N.I Act on the ground that the complainant has lodged the complaint in connection with the cheque issued by the accused towards the financial transaction to the extent of Rs.6,50,000/-.
11. It is well known principle of law that in case of invoking said provision of N.I. Act, the complainant has to prove the existence of legally enforceable debt and liability; and that 7 Crl.A.No.120/2014 cheque must have been issued in discharge of such debt or liability. In this connection the Learned Counsel for the appellant accused has relied upon the decisions which are considered below:
1) 2009(2) AIR Kar.R.186: The Hon'ble High Court (para 9 and 10 ) referring to the Supreme Court decision in AIR 2008 SC 1325; 2008(4)SCC 54, has held that:
"The complainant has to prove the existence of legally recoverable debt payable to him by the accused as on the date of issuing of the cheque by the accused and that in order to rebut the presumption to be drawn in favour of the complainant, the accused need not prove his defence version beyond reasonable doubt and it is sufficient if he brings on record by adducing his own evidence or by eliciting from the complainant and his witness."
In Para No.23 that- "An accused for discharging the burden of proof placed upon him under statute need not examine himself". He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence."
In Para No.11 of this citation the Hon'ble High Court observed that, 'the complainant has not given the exact date on which the accused has borrowed the said amount from him and as in the case on hand, the complainant categorically stated that he paid the amount in the month of December, 2003. Hence, the Hon'ble High Court on this ground itself came to the conclusion that the complainant has failed to prove his version and the accused was acquitted.'
2) 2010(3) Kar R.207: It is observed in Para No.8, the contention of the complainant that, the accused has borrowed Rs.1,30,000/- as hand loan from the complainant.... The complainant does not state date on which he advanced the said loan-even in examination-in-chief, the complainant has not spelled out the date on which the loan was advanced. In the cross-examination, it is elicited from him that the loan was advanced on 06/01/1995, but the Cheques bear the date 06.03.1995. Therefore, presumption under Clause (a) or Section 118 of Act stood rebutted.
3) 2010(4) AIR Kar T 756: In this case, it is observed that, 'the complainant has not placed any evidence to show that he had the financial capacity to lend substantial amount of Rs.4,50,000/- none of the witnesses in presence of whom the loan amount was paid by the complainant examined by the complainant. Admittedly, no document evidencing the loan transaction has come into existence. Hence, adverse inference drawn against the complainant held the accused liable to be acquitted.'
4) (2014) 1 Supreme Court Cases (Cri) 791.: In this case, the Hon'ble Supreme Court held that drawing presumption under Section 118 R/w Section 139- Prerequisites for, when the Cheque is for repayment of a loan/advanced money- proof required on the part of the complainant- held, in order to draw presumption under Section 118 R/w Section 139, the burden lies on the complainant to show;
(i) that he had the requisite funds for advancing the sum of money/loan in question to the accused, 8 Crl.A.No.120/2014
(ii) that the issuance of Cheque by the accused in support of repayment of money advanced was true, and
(iii) that the accused was bound to make payment as had been agreed while issuing the cheque in favour of the complainant- In the case involved in the said decision, the complainant was not aware of the date and place when substantial amount of Rs.1,50,000/- was advanced by him and noticing the contradictory statements given by the complainant, the Hon'ble Supreme Court held acquittal of the accused by the trial Court was pervasive and could not be sustained- Acquittal restored.
5) (2015) Cri.L.J1156 (Supreme Court) (From Karnataka). In this decision facts of the case on the point revealed the allegations of the complainant that, the accused borrowed a sum of Rs.1,50,000/- three and half years ago thereafter again borrowed Rs.25,000/- and issued a cheque of Rs.5,00,000/-, which was dishonoured due to stop payment instructions. It was held that, No evidence in support of the complainant giving hand loan to the accused-Nor there was any calculation of account to show as to how the amount of Rs.5,00,000/- was figured- on this ground and other the Hon'ble Court held conviction of accused not proper."
12. With due respect to the said decisions it is proceeded to consider the present case on hand, with due consideration of the guidelines and dictum laid down therein. It is acceptable about the well settled law as argued by him further that the courts are given enormous power for presumption of of existence of debt or liability under Section 139 of NI Act provided if the presumption is not rebutted with credible evidence and material support by the accused during proceedings. Mere denial and averments will not suffice to shift the burden on to the complainant. But the law is silent about when and at what time the accused can take defence during the proceedings. The Learned Counsel for the appellant has further argued that, the accused has 9 Crl.A.No.120/2014 successfully established his defence pertaining to disputed transaction, alleged cheque, non passing of loan amount and non existence of recoverable debt etc., that "the complainant has not proved the case in connection with the cheque issued by the accused towards the financial transaction to the extent of Rs.8,50,000/-, or Rs.6,50,000/- as she has not taken any loan from the complainant in the month of August, 2008, assuring to repay it within a month and non existence of recoverable debt".
13. The gist of the complaint is spoken to by the complainant as P.W.1 that the accused has taken it as loan from the complainant in the month of August, 2008 assuring to repay it within a month with interest at 18% p.a. if, she failed to repay the loan amount and that she has executed the consideration receipt and on demand promissory note for Rs.8,50,000/- on 22.8.2008. But she failed to repay the loan amount. At the intervention of mediators, she agreed to pay Rs.6 lakhs by 5.8.2009 and balance of Rs.2,50,000/-, to be paid by December, 2009 and issued post dated cheque for Rs.2,50,000/- on 5.12.2009, but she failed to keep up the said promise and on demand, the cheque bearing No.484610 dated 29/09/2009 for Rs.3,50,000/-, drawn on ICICI Bank, Indiranagar branch and another cheque bearing NO.407599 dated 02/10/2009 for Rs.3,00,000/-, drawn on The South 10 Crl.A.No.120/2014 Indian Bank Ltd., Indiranagar Branch, Bengaluru were issued. The said two cheques were presented by the complainant through his collecting banker M/s.HDFC Bank, Madiwala branch, Bengaluru for encashment and cheque was returned dishonoured with endorsement of the banker referred to as "funds insufficient" dated 08/10/2009. Hence, the legal notice was issued on 13/10/2009 demanding the amount covered under the said two cheques (Ex.,P.1 and P.2) of RS.6,50,000/- and there was reply, from the accused under letter dated 29.10.2009 admitting the transaction restricting the receipt of Rs.4,00,000/-, instead of Rs.8,50,000/-; She made false statement that she had been paying monthly interest of Rs.1,68,000/- till June 2009 and requested to provide time to make payment, stating the reasons for non-payment that; there was general worldwide recession the salary of her husband was help up. Hence, she was liable to pay Rs.8,50,000/- under said 3 cheques and that she had issued said two cheques dated 29.9.2009 and 2.10.2009 total sum of Rs.6,50,000/-, knowing fully well that there was no sufficient funds in her account to honour the cheques. Hence, after due procedure of issuing due notice the complainant had presented before the trail court. 11 Crl.A.No.120/2014
14. Thus, gist of the complaint has been reiterated by the complainant as P.W-1. He has referred the documents i.e., the disputed cheques are at Ex.P.1 and Ex.P.2, bank endorsements at Ex.P.3 and Ex.P.4. These documents reveal that said two cheques for Rs.3,00,000/- and Rs.3,50,000/- were dishonoured on its presentation as "funds insufficient". P.W-1 has stated about his efforts made to intimate the dishonour of cheque and demanded the amount to be returned to him i.e., cheques amount of Rs.3,50,000/- and Rs.3,00,000/-, he has referred the office copy of the legal notice which is at Ex.P.5. RPAD receipt and UCP receipts are at Ex.P.6 and Ex.P.7, RPAD acknowledgement at Ex.P.8 and Reply notice is at Ex.P.9. He has referred the complaint which is marked at Ex.P.10. Regarding the demand promissory note and consideration receipt, he has got them marked at Ex.P.13 and Ex.P.14. The other documents relied upon by him is undertaking letter at Ex.P.15, unpresented letter at Ex.P.16, notarized copy of the lease agreement and rental agreement are at Ex.P.17 and Ex.P.18, notarized copy of VAT registration certificate is at Ex.P.19, notarized copy of income tax returns for the year 2007-08 and 2008-09 at Ex.P.20 and Ex.P.21. He has referred the certified copy of 12 Crl.A.No.120/2014 balance sheet of the year 2007 and 2008 at Ex.P.22 and Ex.P.23, certified copy of the certificate of importer and exporter code at Ex.P.24. Ex.P.25 is the certified copy of postal cover for receiving the reply notice.
15. The complainant has referred the documents during the course of cross-examination of DW.1 (the accused), stating that a criminal case was initiated against her in Cr.No.469/2009 for the offence punishable under Section 420 I.P.C. and the incident was with reference to sale transaction of property (site) and committing of alleged cheating was on 5.9.2007. The charge sheet was filed on 4.12.2009. The relevant documents are marked at Ex.P.26 to P.30 i.e. certified copy of the charge sheet, charge (accusation), F.I.R., complaint and mahazar with annexure. He has also referred the certified copy of the deposition (Ex.P.31) of husband of accused by name Sukumar Unnikrishnan; He deposed in C.C.No.1160/2010 as D.W.1 ( in which he was accused in that case for the offence punishable under Section 138 of N.I.Act.
16. On the other hand, the accused deposed as DW-1, denied the material contents specifically the alleged loan 13 Crl.A.No.120/2014 transaction and issuance of cheques and her liability under the said cheques and referred the documents at Ex.D.1, letter to Commissioner of Police, certified copy of OS No.299/2010 at Ex.D.2, Affidavit at Ex.D.3, Written Statement at Ex.D.4 and passport copy at Ex.D.5 stating that her husband was at abroad and he was well off, as he was working at Abu Dhabi as an Engineer. There was no financial crisis to them. She never borrowed any money from the complainant much less Rs.8,50,000/-. Ex.P.1 and P.2 issued as security and the contents of Ex.P.1, P.2, P.13 and P.14 are that of her. She never issued demand promissory notes and consideration receipts.
17. The learned counsel for the respondent has relied upon the decisions supporting his arguments pertaining to the ingredients to be satisfied that the person who had drawn the cheque can be deemed to have committed the offence under Section 138 of NI Act and the presumptions as contemplated under Section 118 and 139 of NI Act etc.
1. Manu/SC/0661/2001 (Equivalent-AIR 2001 SC 2895)- (K.N.Beena V/s Muniyappan and Anr.) "Under Section 118, unless the contrary was proved, it is to be presumed that the negotiable 14 Crl.A.No.120/2014 instrument (including a cheque) had been made or drawn for consideration. Under Section 139, the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus, in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused."
2. Manu/SC/0376/2010 (Equivalent-AIR 2010 SC 1898)-(Rangappa V/s Mohan) "The accused did not raise a probable defence. The defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the 'stop payment' instructions to his bank. Furthermore, the instructions to 'stop payment' had not even mentioned that the cheque had been lost. A Perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability. "
3. Manu/HP/0381/2011 (Bhupinder Singh V/s Prakash Chand and Anr.) "Criminal-Conviction- Offence committed punishable under Section 138 of the Negotiable Instrument Act, 1881 - Held, it was concluded that the stand taken by the Petitioner that he never issued the cheque could not be accepted for the simple reason that there were no attending circumstances that any action was taken by him to establish that the cheque was either stolen from him or that it was forged/fabricated - Petition rejected."15 Crl.A.No.120/2014
4. Manu/SC/1198/2009 (Equivalent-(2009) 14 SCC 683)- (Jugesh Sehgal V/s Shamsher Singh Gogi) (2) Negotiable Instruments Act, 1881-Section 138- Dishonour of cheque--Ingredients of Section 138. To constitute offence under Section 138 of the Negotiable Instruments Act, 1881 (the Act), the following ingredients are required to be fulfilled :
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability ;
(iii) that 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 ;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount or money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
Being cumulative, it is only when all the aforementioned ingredients are satisfied that the 16 Crl.A.No.120/2014 person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
5. Manu/KA/1372/2014 In this decision the case involved, is pertaining to dishonour of cheque and initiation of criminal proceeding under Section 138 of N.I.Act and it has been held that the complainant has proved almost all the ingredients which are material with documentary proof and specific defence of accused was that he gave cheque to one Govardhan towards security for an amount of Rs.25,000/- and blank cheque was issued with duly signed by him, though the accused repaid the amount to said Govardhan, the cheque in question was not returned to him, as it was misplaced and that the cheque in question was misplaced by the complainant. To substantiate the accused produced the receipt issued by said Govardhan on stamp paper of Rs.50/- and the defence of the accused on the face of it is impossible to accept in view of Ex.P.4 a receipt issued by the accused to the complainant for having obtained a loan of Rs.5 lakhs on stamp paper and towards repayment of the same he issued the cheque marked as Ex.P.1 and thus upholding the order of the court's below, the defence has been brushed aside, which was put forth by the accused. Thus, the conviction order has been confirmed.
18. The accused has seriously disputed the very loan transaction and the financial capacity to lend money. Her learned counsel has specifically argued that "It is clear from the cross-examination of P.W.11 and evidence of DW.1 and also the documents that, the accused has successfully established his defence version by adducing her own evidence and also by eliciting from the cross-examination of P.W- 17 Crl.A.No.120/2014 1(respondent/complainant) and also by producing Ex.D.5, passport which reveals that her husband was not at all in India. They are financially sound and raising of loan did not at all arise". It is also seriously disputed by the accused i.e., the very financial soundness of the complainant that, he was not in a position to lend money; She used to purchase items from the complainant's and that she purchased two inverters, one A.C. and one induction plate in the year 2007. These are received in a gap of 10 days. She paid amount by blank cheque for each items. One cheque was encashed for Rs.45,000/- in the year 2007. Balance amount paid in cash and she requested to return the blank cheques. He did not returned. At the time of purchase of A.C. the accused had taken two promissory notes and consideration receipts from her and that they were given as security to the complainant. He did not return them on the ground of misplacement. Thus, material disputes are "no loan transaction", "complainant's capacity to lend money" and "issue of blank cheque and promissory notes and consideration receipts". Under such circumstances though presumption U/sec.118, 138 and 139 of NI Act, are available to the complainant, but he has to prove the material allegations.
18 Crl.A.No.120/2014
19. Therefore it is necessary to refer the evidence of P.W.1, (the very complainant during cross examination) what has been brought on record and the evidence of the very accused what are all deposed by her to substantiate the defence.
20. It is revealed from the evidence of P.W.1 that he has studied upto PUC and come to Bangalore in the year 1999 for job and started his alleged business in the year 2003 in the name and style JS Enterprises dealing in Solar water heater, VPS inverter etc, and registered it during the year 2006-07. Prior to it he was working as plumber. He has stated to be an income tax and sales tax assessee. But he has produced said materials to show about running of said business. But he has not shown in the sales tax and income tax returns of relevant year with reference to the lending of Rs.8,50,000/- or any amount so lent to the accused. He deposed that it was taken that was taken into account. To the question put to him, ,the complainant P.W.1 answered that he did not enter in his business records i.e. account books, sales tax returns and income tax returns to support that said amount was secured from his friends and raising loan from financial 19 Crl.A.No.120/2014 institution and out of his own. He did not say how much of the amount was taken from his alleged friends and financier.
21. It is also notable point as argued by the learned counsel for the accused which is acceptable that the respondent/ complainant has failed to prove financial capacity from the documents of the respondent/complainant as he has produced Ex.P.17 to Ex.P.24 and tried to show his financial capacity. But, none of the documents discloses income as stated by him. Ex.P.17 and 18 are of the year 2006 and 2007 lease agreements of his shop, where he was running his business and these documents do not have any much relevance to this case. Ex.P.20 and Ex.P.21 are the self assessed Income Tax Returns of 2008-2009. The said Income Tax returns of the year 2008 which reveal the total income of that year is only Rs.1,26,650/- it as per Ex.P.16. Both of the documents do not show his Income as stated by him. From the said document and annexure it revealed that Part A-BS Sl.No.3 shown as current assets, loans and advances in 'B' loans and advances are shown as nil. Documents Ex.P.20 to P.23 i.e., self assessed income tax returns and annexure showing his personal income and his business particulars 20 Crl.A.No.120/2014 and Balance sheet which also does not support his statement that he had the amount to lend it. The Balance sheet Ex.P.22 and P.23 for the year 2007 and 2008 discloses the capital investment as only Rs.2,56,079/- and Rs.3,50,482/- respectively. He has not stated what was the investment and business turn-over. When such being his state of affairs the very contention about lending of alleged amount by him, creates doubt that "he had financial sound to lend that much of huge amount to accused, by raising loans from his friends and financier on his personal guarantee with due process of law and also out of his own funds". These transactions ought to have been shown in the accounts. So an adverse presumption against the complainant shall be raised.
22. The accused was residing near the house of complainant. The husband of accused, who is also one of the accused in another criminal case was having acquaintance with P.W.1. (Case has been registered against wife of appellant for money due of Rs.3,50,000/.) There is no much dispute in this regard.
23. With reference to his financial condition, the complainant did not have any documents to show that he was 21 Crl.A.No.120/2014 having that much of amount by borrowing from his friends and availment of loan from financiers. Even in connection with raising of loan from the said financiers he has not produced any materials in that regard that he borrowed the certain amount from his friends and also from said financiers so as to give it directly to the accused in the month of August, 2008. Even the complainant has not specifically stated the date of lending of money in the year 2008. Because, basically it is an admitted fact that husband of accused being employed in abroad as an Engineer, was having sound financial status. P.W.1 has clearly admitted it in his evidence also. So, it creates doubt, how he was able to fulfill the need of that much of amount to the accused.
24. On consolidated discussion referring the evidence of both P.W.1 and DW.1 it is revealed that, the complainant has not referred and produced the material documents to show about his financial soundness, so that he could lend huge amount of Rs.8,50,000/-, in the month of August 2008. When he is running business it cannot be expected that he was avoided to take into account, about huge loan amount paid to the accused, in his books of accounts. Certainly it 22 Crl.A.No.120/2014 creates doubt about that alleged lending of money, which can be enforced it as legally recoverable debt, as per law. Even he has stated about borrowing money from outside, by raising loan from his friends and financial institution, but he has not adduced evidence in that regard, i.e. the evidence of his friends who have lent money to him or authorized person from 'Gold financiers', as contended by him. who have assisted him with finance. What quantum of amount was paid by them is not specified. These factors create doubt as to the financial capacity of complainant, that it was not at all sound, to lend that much of huge amount. He had no money of his own. These are supporting the defence that the complainant had no financially sound to lend that much of huge loan to her in the month of August, 2008.
25. It is the case of the complainant that liability was to the extent of Rs.8,50,000/- and made out the claim for invoking the Section 138 of N.I.Act for a sum of Rs.6,50,000/-, what about the earlier cheque for Rs.2,50,000/-? Why it was not presented for encashment? What was justifiable reason to restrict his claim, when he asserted the legally recoverable debt for Rs.8,50,000/-? These are material points. No 23 Crl.A.No.120/2014 prudent man can keep quite or leave it aside the claim to tune of Rs.2,50,000/-. It is pertinent to note that there is no whisper in Ex.P.5 the legal notice, about the alleged loan transaction of Rs.8,50,000/- and the alleged cheque for Rs.2,50,000/- Ex.P.16 and the alleged promissory note and consideration receipt at Ex.P.13 and P.14. It is the reply (under Ex.P.9) of DW.1 to Ex.P.5 in connection with the alleged borrowings, 'disputing the claim' she had admitted the borrowings of Rs.4,00,000/- only and stated that she had been paying instalments of Rs.1,68,000/- each, till June 2009 and because of General Worldwide Recession her husband's salary was held up for couple of months, which refers to after June 2009. Even she has stated that she was not in need of any finance during the year 2008, much less for her son. As per statement of her husband at Ex.P.31 that his son was taking education during the year 2005. DW.1/accused in this case stated that her son was already joined the service during the year 2008. Except interested version of DW.1, nothing is on record to believe his case that accused was in need of finance in the year 2008. 24 Crl.A.No.120/2014
26. It is material to believe the defence and it is acceptable argument of learned counsel for the accused that "the appellant/accused had taken defence with credible evidence with material support that is by producing her husband's passport showing that in the month of August, 2008, her husband was not in India and the statement of the complainant that "both visited him several times in the month of August 2008" becomes false; Also, contradictory statements given by the complainant on different items becomes additional support to the accused defence; But the Hon'ble Tribunal erroneously passed judgment without applying its mind by looking into the documents and without observing the depositions of both the parties". She further argued that, "the whole judgment goes to shows that it is nothing but and paste of an ordinary case. The Hon'ble Tribunal on its own came to the conclusion that the accused had taken defence during cross-examination". But it is not prohibited. The specific defence was not considered duly by trial court and it is against the Law. The accused had taken defence in her chief examination itself which is the initial stage for first time entering the witness box during cross- examination of P.W.1 and in the reply she has disputed the 25 Crl.A.No.120/2014 claim of the complainant who is not firm in his case. Thereby she denied the transaction, financial capacity, issue of cheques and there exists recoverable debt.
27. The respondent/complainant averred that he is running the business of supply and maintenance of Inverters, Batteries, Solar Water Heater and other related materials and that he started his business in the year 2003 and registered in the year 2006 or 2007. The documents Ex.P.17 and Ex.P.18 produced by the complainant shows that he started some small business in the year 2006-2007, the learned counsel for the accused rightly pressed upon the evidence of P.W.1 which has supported the defence that, "he disclosed in his cross-examination that he was buying spare parts and preparing the items without any branded name. That apart, he has admitted in his cross-examination that he was doing small plumbing and electrical work at Appellants/Accused's house since 2000. The complainant admitted that the accused was of kind heart and she came forward to help the complainant and purchased many items from him and also she introduced her friends who also used to purchase certain items, even though they were not branded items and 26 Crl.A.No.120/2014 expensive. The complainant also accepted in the cross - examination that the accused paid the cost of the items through Cheque and sometimes by cash. When such being the case it cannot be ignored that the complainant might be misused the Cheques given by the Appellant/Accused at the time of purchasing the materials". From this what is revealed is that, 'what are all made out by the complainant, and the securing admission from DW.1 that disputed cheques and promissory note and consideration receipts etc. bear her signatures, etc., are subject to disputing the contents and purpose for which she signed them. So, that all are not well and they are being material dispute are not proved beyond all reasonable doubt. They cannot be clear and unequivocal admission and proving the said facts beyond all reasonable doubt. Probabilities tilting more in favour of accused to believe the defence. Complainant failed to discharge the initial burden, about serious dispute raised by the accused about financial soundness of the complainant. He failed to prove the alleged debt of Rs.8,50,000/- under Exs.P.1, P.2, P.13, P.14 and P.16, so that it could be held that there was legally recoverable debt. It is not the case of complainant Ex.P.1 and P.2 were issued in discharge of part of the loan 27 Crl.A.No.120/2014 availed, which could be seen from the legal notice Ex.P.5, which discloses the definite assertion that DW.1 borrowed Rs.6,50,000/- and in discharge of the and Ex.P.1 and P.2 were issued. If there was in reality "raising loan of Rs.8.5 lakhs; then certainly P.W.1 would have been stated all real state of affairs, as it was towards legally recoverable debt. Why it was suppressed? It creates doubt about the alleged transaction.
28. Apart from this under Ex.P.9 accused had expressed her willingness to resolve the dispute admitting borrowings of Rs.4 lakhs only., What efforts made by the accused has not been explained by the complainant/P.W.1. When such being the case, it reveal the immediate response of DW.1 to resolve. Hence, it cannot be said that it was legally recoverable debt and Ex.P.1 and P.2 were issued in discharge of the same. So, on this count also the case of the complainant is not free from an reasonable doubt, so as to hold that there exist legal recoverable debt under Ex.P.1 and P.2 and that knowing well that there was no balance in her account, even then she issued the same and thereby committed an offence punishable under Section 138 of the N.I.Act. Hence, the 28 Crl.A.No.120/2014 respondent/complainant has failed to prove that the said cheques are issued by the Appellant/accused to discharge the so-called debt or loan liability. It is therefore acceptable argument as advanced by the learned counsel for the accused that, "That apart, as discussed above, the respondent/complainant has failed to prove his financial capacity also. The Ex.P.17 to Ex.P.24 produced to show his financial capacity, did not corroborate his case. None of the documents discloses income as stated by him i.e. in his cross-examination in page No.8, he has stated that his investment in the business is Rs.10.00 lakhs to Rs.20.00 lakhs".
28. It is also notable point that the respondent/ complainant averred that he has paid Rs.8,50,000/- to the appellant/accused and produced three cheques (1) for Rs.3,50,000/- (2) for Rs.3,00,000/- and (3) for Rs.2,50,000/- but claimed only Rs.6,50,000/-. Certainly, all three cheques totally amount to Rs.9,00,000/-. Claim under Ex.P.5 is different. The contents of Ex.P.13 and P.14 do not come to his aid also. Hence, it is rightly argued by the learned counsel for the accused that "the statement of the appellant 29 Crl.A.No.120/2014 about the money paid, the amount shown in the Cheques and the amount claimed do not tally and defer from with each other and he has not chosen to explain the reason for the said difference". There are material discrepancies contradicts, which are fatal to the case of the complainant.
29. Regarding Ex.P.15, the complainant relied upon it to show that the appellant/accused has admitted to repay Rs.6,00,000/- as debt. But accused has denied the same. The said stamp paper stands in the name of the respondent/complainant as Jose Francis. It is material to note that the signature of the appellant/accused is at the end of the stamp paper i.e. much below the contents of the document. Therefore, it is rightly argued by learned counsel for the accused that "it is well known legal position that the signature of the author of any document must be immediately at the end of the contents of the documents. Why such writings and signature crept in Ex.P.15 has not explained justifying it to believe that it is a genuine document. Hence, defence of accused shall be believed that, "Ex.P.15 clearly discloses that the signature is taken on the blank stamp paper and contents are written by him or his 30 Crl.A.No.120/2014 person subsequently to meet his requirements at his convenience". So this Ex.P.15 is not free from a ny reasonable dispute. So, cannot be believed, as it was due admission under law, of DW.1.
30. The criminal case filed in the year 2007 against the accused was by the complainant by name Rajendran, in C.C.No.116/2010. Husband of accused, as revealed in Ex.P.31 stated that said complainant was filed by the friend of the complainant in that case. But what would be the result of that case and how it would help the complainant has not made it clear in this case. How it would help the complainant, to prove the legally recoverable debt, etc., has not been made it clear. The said criminal case filed in the year 2007 against the accused was admitted. The complainant was one Rajendran. DW.1 as revealed in Ex.P.31, stated that said Rajendran was friend of the complainant of this case. But what would be the result of that case and how it would help the complainant has not made it clear there was legally recoverable debt, under the alleged cheques, to be paid by the accused.
31 Crl.A.No.120/2014
31. Under such circumstances the case of the complainant is unbelievable one, towards legally recoverable debt. Therefore it is rightly challenged by the appellant before this Court on several grounds as referred above meeting out the same. The impugned conviction judgment of the trial court is liable to be set aside as the trial court has not considered the material facts and circumstances, which are on record and wrongly come to the conclusion regarding lending of money, genuineness of alleged documents referred by P.W.1 and conclusion that there exists debt as claimed for under the alleged cheques, disbelieving defence of DW.1, and wrongly accepting the version of P.W.1 and applied the presumption under Sections 118, 138, 139. It is without considering the rebuttal evidence duly placed by the accused. Thus, the trial court has come to the wrong conclusion placing reliance on the documents produced and evidence let in by complainant discarding the one placed by the accused and that it has discarded the evidence on record and certain admissions taken from the mouth of the P.W.1 as discussed above and failed to appreciate the evidence properly. Hence, interference of this appellate court is necessary and the impugned conviction judgment and order 32 Crl.A.No.120/2014 of sentence are liable to be set aside. Therefore I answer point No.1 and 2 in the affirmative.
29. Point No;3 : In view of the above discussion and conclusion arrived at, I proceed to pass the following:
ORDER The appeal preferred by the appellant U/Sec. 374(3), Cr.P.C., is hereby allowed.
In the result, the judgment of conviction and order of sentence U/s 138 of N.I.Act, passed in C.C117/2010 on 9.1.2014 by the XIII ACMM, Bangalore, is hereby dismissed.
Consequently, the accused is hereby acquitted for the offence punishable u/s 138 of N.I Act.
The bail bond of accused and that of surety stand canceled.
Send LCR with copy of this judgment to the Trial court.
(Dictated to the Judgment Writer, transcribed by her, then corrected and pronounced by me in the open court on this the 31st day of March, 2016) (Yadav Vanamala Anandrao) LII Addl. City Civil & Sessions Judge, Bengaluru.