Karnataka High Court
Smt.Vijayalaxmi W/O. Mallikarjun ... vs Shanker Kodla S/O. Late Kazshappa Kodla on 18 March, 2021
Author: Shivashankar Amarannavar
Bench: Shivashankar Amarannavar
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 18TH DAY OF MARCH 2021
BEFORE
THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
CRIMINAL APPEAL NO.200074/2016
BETWEEN:
SMT. VIJAYALAXMI W/O MALLIKARJUN NAGUNDI
AGE: 39 YEARS OCC: HOUSEHOLD
R/O H.NO.79, CHAMUNDESHWARI NAGAR
JEWARGI ROAD, GULBARGA - 585 103.
... APPELLANT
(BY SRI. SACHIN M. MAHAJAN, ADVOCATE)
AND:
SHANKER KODLA S/O LATE KASHAPPA KODLA
AGE: 65 YEARS OCC: PRESIDENT OF
MAHATMA JYOTIBHA PULE PADAVI MAHAVIDYALAYA
R/O: SHAHABAZAR NAKA, GULBARGA - 585 103.
... RESPONDENT
(BY SRI. AVINASH UPLOANKAR, ADVOCATE
(ABSENT))
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THIS CRIMINAL APPEAL IS FILED UNDER
SECTION 378 (4) OF CR.P.C., PRAYING TO CALL FOR
THE RECORDS OF TRIAL COURT AND SET ASIDE THE
JUDGMENT AND ORDER PASSED IN
CRL.A.NO.18/2013 DATED 16.06.2014 BY THE IVTH
ADDL. DISTRICT AND SESSIONS JUDGE, AT
GULBARGA, VIDE ANNEXURE-A, AND CONVICT THE
ACCUSED UNDER SECTION 138 OF N.I. ACT AND
CONFIRM THE ORDER PASSED IN C.C.NO.3811/2010
DATED 08.03.2013 BY THE IVTH ADDL. CIVIL JUDGE
AND JMFC GULBARGA AND DIRECT THE ACCUSED
TO PAY THE CHEQUE AMOUNT WITH INTEREST IN
THE ENDS OF JUSTICE AND EQUITY.
THIS APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT THIS DAY, DELIVERED
THE FOLLOWING:
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JUDGMENT
This appeal is filed by the complainant challenging the judgment dated 16.06.2014 passed by the IV Addl. District and Sessions Judge, Gulbarga in Crl.A.No.18/2013 whereunder the judgment and sentence passed in C.C.No.3811/2010 dated 08.03.2013 by IV Addl. Civil Jude (Jr. Dn) and JMFC, Gulbarga convicting the respondent - accused for the offence punishable under Section 138 of the Negotiable Instrument Act (for short 'N.I. Act'), came to be set-aside and respondent - accused was acquitted for the said offence.
02. The appellant was the complainant and respondent was the accused before the Trial Court.
03. The parties will be referred as per their ranks before the Trial Court.
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04. Case of the complainant in brief is as under;-
The complainant was working as a superintendent in Mahatma Jyotibha Phule Padavi Mahavidyalaya, an educational institution run by the accused. At that point of time, on the request of accused for hand loan for improvement of institution and business necessities, the complainant advanced loan of Rs.7,00,000/- to him on 10.06.2009 by pooling out funds from her family members and relatives. The accused agreed to repay the loan within six months. After six months, the accused did not repay the loan. After repeated persuasion accused issued a cheque dated 15.03.2010 for Rs.7,00,000/- to complainant, drawn on Canara Bank, Subramanya Nagar, Bangaluru. The complainant presented the cheque for encashment. The cheque returned unpaid with an endorsement 'account closed by drawer'. Immediately thereafter, the complainant 5 issued a legal notice dated 27.03.2010 to accused to his both addresses. The accused issued reply notice. With these averments the complainant had filed complaint for the offence punishable under Section 138 of the N.I. Act.
05. The complainant herself examined as PW.1 and produced documents as per Exs.P.1 to 7. The accused denied the incriminating evidence while recording his statement under Section 313 of Cr.P.C. Accused led defence evidence by examining himself as DW.1 and he examined two witnesses as DWs.2 and 3 and got marked documents as per Exs.D.1 to 10.
06. The Trial Court after hearing arguments of both sides, formulated point for consideration and passed judgment dated 08.03.2013 in C.C.No.3811/ 2010 and convicted the accused for the offence punishable under Section 138 of N.I. Act and sentenced him to pay a fine of Rs.10,00,000/-. In default to pay 6 fine, the accused shall undergo simple imprisonment for a period of six months. Out of this fine amount, a sum of Rs.9,75,000/- was ordered to be paid as compensation to the complainant and remaining amount was ordered to be remitted to the State.
07. Accused challenged the said judgment of conviction and order of sentence in Crl.A.No.18/2013 on the file of IV Addl. District and Sessions Judge, Gulbarga. The said appeal came to be allowed by the judgment dated 16.06.2014 and judgment passed by the Trial Court in C.C.No.3811/2011 dated 08.03.2013 came to be set-aside and respondent - accused was acquitted for the offence punishable under Section 138 of N.I. Act.
08. The appellant - complainant has challenged the said judgment in this appeal.
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09. Heard Sri. Sachin M. Mahajan, the learned counsel for the appellant-complainant. The learned counsel for the respondent - accused was absent.
10. The learned counsel for the appellant - complainant would contend that the order passed by the Appellate Court is contrary to the law and facts. The Appellate Court has not applied its judicial mind to the facts and material on record and reached wrong conclusion. The Appellate Court has not appreciated the evidence or documents properly. The Trial Court had rightly held that the accused had not disputed his signature on the cheque and the accused in his reply had stated that this complainant had stolen the cheque. The different version have been stated in the Court. Hence, the Court held that the complainant had proved her case beyond reasonable doubt and convicted the accused. The Appellate Court has overseen all the evidence and materials and acquitted the accused. The 8 Appellate Court has mechanically passed the order without applying its judicial mind. The Appellate Court has wrongly interpreted Sections 118 and 139 of N.I. Act. He placed reliance on the decision in the case of Sripad vs. Ramadas M. Shet reported in 2014 (5) Kar. L.J.283, wherein this Court has observed thus;-
"15. Looking to the above said circumstances, I am of the opinion, the initial presumption under Sections 118 and 139 of Negotiable Instruments Act cannot be said to have been rebutted by the accused. Of course, the accused need not rebut the presumption beyond all reasonable doubt as it is incumbent upon the complainant to prove his case beyond reasonable doubt. Nevertheless, the accused has to place sufficient materials to convince the Court that his case is probabilised when it is compared with the case of the complainant. If the accused has failed to establish that his case is proved by means of preponderance of possibility that is to say, probabilities placed 9 by the accused have the capacity to preponder over the case of the complainant then only such materials should be accepted. Mere a distorted version or mere taking up the plea or the defence that he is not liable to pay any amount or he discharged the amount are not sufficient to put back the burden on to the complainant to prove his case beyond reasonable doubt."
With these submissions, he prayed to allow the appeal.
11. Having heard the learned counsel for the appellant - complainant and on perusal of the records, the following point that arise for consideration:-
"Whether the Appellate Court has erred in appreciating the evidence, allowing the appeal and acquitting the respondent -
accused?"10
12. The answer to the above point is in the 'Affirmative' for the following reasons.
13. A mandatory presumption is required to be raised in respect of Negotiable Instrument in terms of Section 118 (b) of the Act. Section 139 of the Act merely raises a presumption that the cheque has been issued for discharge of any debt or other liability. The proceeding under Section 138 of N.I. Act is quasi criminal in nature. In these proceedings, proof beyond reasonable doubt is subject to presumptions envisaged under Sections 118, 139 and 146 of N.I. Act. In the recent decision in the case of P. Mohanraj and others vs. M/s. Shah brothers Ispat and connected cases decided on 01.03.2021 (LL 2021 SC 120) the Hon'ble Supreme Court has observed thus "Section 138 proceedings can be said to be a 'Civil Sheep' in a "Criminal Wolf" clothing.
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14. An offence under Section 138 of N.I. Act is committed not on dishonor of cheque, but on failure of drawer of the cheque to make payment within 15 days from the date of receipt of notice of dishonor. An essential ingredient of Section 138 of N.I. Act is that the cheque in question must have been issued towards a legally enforceable debt. Sections 118 and 139 of the Act envisage certain presumptions. Under Section 118 of the Act, a presumption shall be raised regarding consideration, date, transfer, endorsement and regarding holder in the case of Negotiable Instruments. Even under Section 139, a rebuttable presumption shall be raised that the cheque in question was issued towards discharge of legally enforceable debt.
15. In the case of Rangappa vs. Shri Mohan reported in (2010) 11 SCC - 441, the Hon'ble Apex Court has held as under:
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"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhana Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, 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 doubt that there is an initial presumption which favours the complainant.
27.xxx xxx
28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has 13 to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
16. In the light of the above decision, the case on hand is to be considered. PW.1 - complainant has deposed that she was working as Superintendent in institution run by the accused viz., Mahatma Jyotibha Phule Padavi Mahavidyalaya. On the request of accused for hand loan of Rs.7,00,000/- for improvement of institution and business necessities, she has advanced a sum of Rs.7,00,000/- to accused on 10.06.2009 by pooling out funds from her family members and 14 relatives. The accused agreed to repay the loan within six months. After six months, the accused did not repay the loan. After repeated persuasion accused issued Ex.P.1 - Cheque dated 15.03.2010 for Rs.7,00,000/- to the complainant drawn on Canara Bank, Subramany Nagar, Bengaluru. She has presented the cheque for encashment, but cheque returned unpaid with endorsement 'account closed by drawer' as per Ex.P.2 - Bank Endorsement. Thereafter, the complainant has issued Ex.P.4 - legal notice dated 27.03.2010 to accused to his both addresses. Notices were served on him and postal acknowledgments are at Exs.P.5 and 6. The accused issued reply notice as per Ex.P.7.
17. The accused has taken multifold defenses. PW.1 was cross-examined on her financial capacity, alleged loss of cheque by accused, lodging of police complaint and difference in ink used for writing Ex.P.1. However, it is noted that accused has not disputed his 15 signature on the cheque. PW.1 was cross-examined on different aspects of defense. One of the prominent defences urged is loss of cheque. In this connection accused heavily relied on the police complaints that he claims to have lodged to Subramanya Nagar Police Station, Bengaluru and Chowk Police Station, Gulbarga. The copies of complaints are at Ex.D.1 and Ex.D.6. Ex.D.1 is dated 19.09.2009 and Ex.D.6 is dated 26.09.2009. In Ex.D.1 the accused has asserted that he had seen that he had kept his cheque book in his bag before leaving Gulbarga to Bengaluru. After reaching Bengaluru on 14.09.2009, he found that cheque book was missing. Therefore, the complaint was lodged. Whereas, in Ex.D.6 it is alleged that on 11.09.2009, locker key and cheque book pertaining to Account No.26115525, standing in the name of Jai Bheema Gade, Kannada Daily, Bengaluru Edition, which he had kept on his office table was misplaced. Accused has also placed reliance on news paper publication in 16 Sanjeevani, evening daily published from Gulbarga and Bengaluru dated 12.09.2009, it is stated that he had lost the cheque books containing leaves bearing No.685251 to 685300. The news paper publication is produced at Ex.D.7 and Ex.D.8. The accused has issued Ex.P.7 reply dated 31.03.2010 to the legal notice issued by the complainant. A specific allegation was made against the complainant that cheque bearing No.685253 (Ex.P.1) was stolen by her. There is no suggestion in that regard in the cross-examination of PW.1. The accused has also not stated anything in his evidence in that regard. On 11.09.2009 memos issued by the accused to his employees inter-alia requesting them to return the cheque book in case same is traced. A copy of memo produced at Ex.D.2. In the said memo, it is stated that accused has lost cheque books and locker key in his office. If accused had really known that the complainant stolen the cheque book what made the accused to keep quiet without informing to the police as 17 he had already lodged the complaint with regard to loss of cheque book, but, he has not done so. No documents were produced by the accused to show that even thereafter he has lodged the complaint against the complainant alleging theft.
18. DW.1 in the cross-examination categorically stated that he took the cheque book with him to Bengaluru. Apart from cheque book one he had lost, he did not lose anything. He further stated that he had lost one cheque book out of 4 to 5 cheque books, which he had in his possession when he was at Bengaluru. The accused gave memo to the staff of his college. But they have given reply to the memo. The accused did not get suspicion on complainant for not having replied the memo. Accused gave another notice to the complainant on account of her absence to duty and failure to give reply to the memo, but the copy of the same was not produced.
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19. The accused has examined two witnesses as DWs.2 and 3 who are admittedly his employees working in the institution run by him. They testified in Court only to the limited extent of alleged loss of cheque book and locker key, issuance of memo and reply thereto. They have deposed that during 2009 accused gave memo to the employees working in his educational institution including the complainant, calling for explanation in connection with loss of his cheque book and locker key. They have submitted reply to the memo. The reply submitted by DW.2 and DW.3 are at Ex.D.4 and Ex.D.5. In the cross-examination they have stated that they being the employees working in the institution run by accused, one can not expect them to depose against accused. Their evidence is inconsistent to the defense that the cheque book was lost in transit at Bengaluru. Their evidence is against the defence of the accused that he lost the cheque book in Bengaluru. 19
20. The accused at one breath asserts that his cheque book and locker keys were misplaced in his office at Gulbarga and on the other he contended that the bag containing cheque book was lost at Bengaluru during September 2009. DW.2 and DW.3 were examined by accused to show that memo was issued to them with regard to loss of cheque book and locker keys in his office at Gulbarga. Ex.P.7/Ex.D.10 reply was issued by the accused to the complainant stating that the complainant stolen the cheque, admittedly no complaint was lodged against her in that regard.
21. It is the evidence of DW.1 that he took the cheque book to Bengaluru with him and he had carried 4-5 cheque books to Bengaluru and one of the cheque book was lost. Though complaint is lodged at Bengaluru and Gulbarga as per Ex.D.1 and Ex.D.6, no case has been registered and FIR was lodged. The very inconsistency of defence with regard to alleged theft or 20 loss of cheque goes to show that there is no iota of truth in it. The said defence appears to have been taken only for the purpose of this case. There is no explanation by the accused as to how Ex.P.1 - cheque came to the hands of complainant that too with his admitted signature. It is not the case of the accused that he has lost signed cheque. The accused nowhere explained as to what made him to keep the signed cheque along with other cheques. It is also not the case of accused that he had kept cheque book with all the cheques signed. Accused not produced any document to show that he has intimated his banker about loss of entire cheque book. Therefore, conduct of the accused creates doubt with regard to version of loss of cheque book. Therefore, alleged loss of cheque book is not worth to be believed. There is no evidence on record to say that the complainant had access to cheque books and other bank documents of accused. No suggestions were made in the cross-examination of PW.1 that, complainant had 21 access bank documents such cheque books belonging to the accused. In the cross-examination of PW.1 it is elicited that during relevant point of time the complainant and her close relatives did not had sufficient bank balance. It is also elicited that neither her husband nor her brothers issued cheque to her. But that does not mean that she has not at all received money from her relatives at all. The complainant's contention was that she could pool out money from her close relatives. Admittedly, one of her brothers is a Teacher, another brother is running finance and one brother is practicing law at Bengaluru since 08 years and her father worked as Work Inspector with PWD and her mother had deposits with Industrial Co-operative Bank. It was also elicited in the cross-examination that her husband was working in Police Department as Wireless Operator and complainant is the only daughter to her parents. Therefore, contention of the complainant that she has pooled out money from her brothers, 22 husband and mother can be believed. Therefore, the case of the complainant that she could pool out funds from her relatives is probable and acceptable.
22. The accused has not at all denied his signature on Ex.P.1. The accused has contended that other writings on Ex.P.1 do not belong to him. PW.1 admitted hand writing on Ex.P.1 is not of accused. It is not objectionable or illegal in law to receive an inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully binds the maker of instruments to the extent it purports to declare.
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23. In the recent decision in the case of M/s. Kalemani Tax vs. Balan (Crl.A.No.123/2021) (LL 2021 P.75) decided on 10.02.2021, the Hon'ble Apex Court has observed that "Even a blank cheque leaf voluntarily signed by the accused would attract the presumption under Section 139 of N.I. Act."
24. In the light of absence of dispute regarding signature on Ex.P.1, it is for the accused to explain that he has neither authorized the complainant to fill up the material particulars nor there was an understanding that amount mentioned in cheque agreed to be paid. His defense of alleged loss/theft of cheque has not been successfully proved by accused. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 of N.I. Act for the discharge, in whole or in part, of any debt or other liability. The effect of these presumptions is to place the evidential burden on the 24 accused of proving that the cheque was not issued towards the discharge of any liability.
25. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. The fact is said to be proved when, after considering the matters before it the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
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26. The Trial Court on appreciating the evidence on record has rightly held that the complainant has established that the cheque in question was issued for discharge of debt and accused has failed in all the attempts to make a probable defense which would falsify the case of prosecution. Therefore, the Trial Court has rightly convicted the respondent - accused for the offence punishable under Section 138 of N.I. Act. The Appellate Court without appreciating the evidence in proper perspective and on assumption has held that the complainant has not proved that Ex.P.1 - Cheque issued towards payment of legally enforceable debt. The said finding of the Appellate Court is erroneous. Therefore, the judgment passed by the Appellate Court in Crl.A.No.18/2013 dated 16.06.2014 required to be set-aside and judgment passed in C.C.No.3811/2010 dated 08.03.2013 convicting the respondent - accused requires to be upheld. In the result, the following:- 26
ORDER The appeal is allowed.
The judgment dated 16.06.2014 passed in Crl.A.No.18/2013 by the IV Addl. District and Sessions Judge, Gulbarga is set-aside. Consequently, the judgment passed by the IV Addl. Civil Judge (Jr. Dn) and JMFC, Gulbarga in C.C.No.3811/2010 dated 08.03.2013 convicting the respondent - accused for the offence punishable under Section 138 of N.I. Act and sentence passed therein is affirmed.
The respondent either pay the fine, or serve the sentence in compliance with the judgment dated 08.03.2013 passed by the IV Addl. Civil Judge (Jr. Dn) and JMFC, Gulbarga in C.C.No.3811/2010.
Sd/-
JUDGE KJJ