Karnataka High Court
M/S M K Enterprises vs Kumari Varsha Pole on 17 December, 2021
Author: S. Sunil Dutt Yadav
Bench: S. Sunil Dutt Yadav
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IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 17TH DAY OF DECEMBER, 2021
BEFORE
THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV
CRIMINAL REVISION PETITION NO. 375/2021
BETWEEN:
1. M/s. M. K. Enterprises
Partnership Firm,
Rep. by Partner, K. Gopal Poojari
New Shanthisagar, No.4,
P & T Colony, R. T. Nagara,
Bengaluru 560 032.
2. Sri. K. Gopala Poojari
S/o. Panju Poojari
Aged 60 years
Partner, M/s. M. K. Enterprises
Hotel New Shanthisagar
Residing at Kalyana Village Thalluru
Kundapura Taluk,
Udupi District 576 225.
...Petitioners
(By Sri. Nehru M.N., Advocate)
AND:
Kumari Varsha Pole
D/o. Vishwanath Rao Pole
Aged about 34 years
R/at No. 301/19, 6th Main,
14th Cross, Vyalikaval Extension,
Malleshwaram,
Bangalore 560 003.
2
...Respondent
(By Ms. Ayantika Mondal, Advocate)
This Criminal Revision Petition is filed under Section
397 read with Section 401 of Cr.P.C., praying to call for
the entire records in C.C.No.3369/2018 on the file of
Hon'ble IV Additional & XXX ACMM and set aside the
judgment of conviction dated 12.06.2019 passed by the
Hon'ble IV Additional & XXX ACMM at Bangalore in
C.C.No.3369/2018 convicting the accused/petitioner for
the offence punishable under Section 138 of N.I.Act and to
acquit the accused from the said alleged offence and set
aside the judgment dated 23.11.2020 passed by the
Hon'ble LXVII Addl. City Civil and Sessions Judge in
Crl.A.No.1518/2019.
This petition pertaining to the Bengaluru Bench
reserved on 26.11.2021 coming on for pronouncement of
orders at Dharwad Bench, through video conference, this
day, the Court made the following:
ORDER
The petitioners 1 and 2 were accused Nos. 1 and 2 respectively before the trial Court and have filed the present revision petition under Section 397 read with Section 401 of Cr.P.C calling in question the order of the Additional Chief Metropolitan Magistrate passing a judgment of conviction in C.C.No.3369/2018 convicting the petitioners for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act'). The Court of first instance 3 while sentencing the accused had directed the 2nd accused to pay penalty of Rs.10,00,000/- and on failure to honour the same, the accused was sentenced to 6 months simple imprisonment. It was directed that the said penalty of Rs.10,00,000/- was to be given to the complainant as compensation in terms of Section 357(1) of Cr.P.C. It was further stipulated that the accused was to pay a fine of Rs.5,000/- which was directed to be appropriated by the Government.
2. As against the said judgment of conviction, the petitioners had preferred Criminal Appeal No.1518/2019 under Section 374(3) of Cr.P.C. which having been dismissed, the present revision petition has been filed.
3. Parties are referred to by their rank before the trial Court (Court of first instance) for the purpose of convenience.
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4. The complainant had filed a complaint asserting that cheque issued by the 2nd accused bearing cheque No.152596 drawn on Dena Bank when presented came to dishonoured on the ground of "insufficient funds" and as the accused failed to make payments despite issuance of notice, the complaint came to be filed invoking the provisions of Section 138 of the Negotiable Instruments Act, 1881.
5. Facts that are made out are that the 2nd accused and the father of the complainant were known to each other and as it was submitted by the 2nd accused that a hotel would be opened in the name of father of the complainant and a portion of the profit from the hotel business would be paid to the complainant, a sum of Rs.10,00,000/- was withdrawn on two occasions on 23.09.2010 and given to the 2nd accused.
6. It is stated that as the accused did not honour commitment regarding payment of profits, 5 accused decided to repay the amount by issuing a cheque dated 06.05.2018 for an amount of Rs.10,00,000/- by a cheque bearing No.152596. Cheque being presented came to be dishonoured by virtue of an endorsement dated 05.06.2018. Despite legal notice, accused No.2 had not taken any steps for repayment. Accordingly, complaint came to be filed.
7. The main contention raised by the accused as could be gathered from the material including the evidence of the parties on record are that, the 2nd accused was active in politics and the affairs of M/s.M.K.Enterprises were looked after by Sri.Madhava Poojari who was his brother. It is stated that the cheques which were signed were handed over to his brother who was looking after the affairs of the firm. It is also asserted that as Sri. Madhava Poojari had a chit fund transaction with the father of the complainant and as he had taken the chit, as a security for repayment, cheque was handed over to 6 the complainant. It is stated that the said cheque had been misused and that the complainant did not have the financial capacity to pay the amount of Rs.10,00,000/-.
8. The trial Court has framed the following points of consideration:
(i) Whether the complainant proves that pursuant to the request of the accused for financial assistance of Rs.10,00,000/- with a promise that a hotel would be opened in the name of the complainant's father, the complainant had withdrawn amount in two installments of Rs.5 Lakhs each and paid to the accused. Further, when complainant proves beyond reasonable doubt that as no profits were given upon demand for repayment, the accused has given a cheque dated 06.06.2018 vide Cheque No.152596 drawn on Dena Bank ? 7
(ii) Whether the complainant proves that as the accused has failed to pay the amount despite issuance of notice, offence under Section 138 of the Negotiable Instruments Act has been committed?
9. The complainant examined herself as P.W.1 and marked documents at Exs.P.1 to P.11. The accused No.2 has led evidence as D.W.1 and marked one document at Ex.D.1.
10. The trial Court has recorded a finding that the complainant has withdrawn an amount of Rs.5,00,000/- from the Bank on two occasions and handed over such amount to the 2nd accused. It is submitted that the assertion of withdrawal is supported by Ex.P.10 - statement of HDFC Bank. Taking note of the said fact, the trial Court comes to a conclusion that the financial capacity of the complainant to pay stands established. 8
11. The trial Court further observes that though the 2nd accused has talked about a chit fund transaction, no documents or evidence are produced to substantiate the contention that the cheque was issued only as security regarding the chit fund transaction. The Court also observes that no effort was made to summon or lead evidence through the said Sri. Madhava Poojari and notices that no reply was given to the legal notice issued despite the legal notice having been served on the accused.
12. The trial court has also noted that the accused has accepted that the signature on Ex.P.1 is of the accused. Accordingly, the trial Court taking note of the admission of the accused as regards to the signature on the cheque, has relied on the presumption under Section 139 of the Act while recording a finding against the accused.
13. As regards to the point for consideration relating to adherence to time limit and procedure 9 prescribed under Section 138 of the Act, the trial Court has taken note that the cheque dated 06.05.2018 which was presented and endorsement dated 05.06.2018 which was issued by the bank. It is also observed that cheque has been presented within three months and legal notice having been issued on 19.06.2018 and served, as there was no reply by the accused for a period of 2 weeks, complaint came to be filed under Section 138 of the Act. Having found in the affirmative as regards to points for consideration the trial Court has proceeded to pass the judgment of conviction as has been stated above.
Proceedings in Crl.A.No. 1518/2019:
14. As against such judgment of conviction, the accused have filed Criminal Appeal No. 1518/2019.
The primary contention by the accused in the appeal was that while the father of the complainant had filed a case against the accused and after the cross- examination on 28.04.2018 in C.C.No.1190/2018, a 10 cheque dated 152596 drawn on Dena Bank was issued in favour of the complainant who is the daughter of the complainant in C.C.No.1190/2018 was unbelievable. It was also contended that the complainant had withdrawn a sum of Rs.10,00,000/- on two occasions of Rs.5,00,000/- each and the story of the complainant that she made payment by way of cash cannot be accepted as nothing prevented her from making payment by way of RTGS.
15. The appellate Court has observed that as regards the aspect relating to source of income, the bank statement would reveal that amount was withdrawn by the complainant and it was to be concluded that such withdrawal was made in order to make payment. The appellate Court further observes that the facts would reveal that there existed a liability and though there was some doubt regarding issuance of cheque in the year 2018, the cheque may have been issued as a post-dated cheque and that would 11 not affect the validity of the instrument. It is further observed by the appellate Court that despite the accused having asserted that the cheque was misused, no evidence has been led in as regards such misuse or as regards the chit fund transaction. The appellate Court has also observed that no reply notice was issued relating to the legal notice, which could be construed to be an adverse inference in terms of Section 114 of the Evidence Act.
16. Accordingly, taking note of the presumption under Section 139 of the Act, the appellate Court has affirmed the judgment of conviction passed by the trial Court.
Present Revision Proceedings:
17. The point that arise for consideration in the present revision proceedings is:
Whether sufficient grounds are made out for interference with the concurrent findings of the trial Court 12 as well as the appellate Court in exercise of the revisional power under Section 397 of Cr.P.C.?
18. At the outset, it must be pointed out that the scope of interference in exercise of revisional power is limited and the Court is required to satisfy itself while exercising such power regarding the "Correctness, legality or propriety of any finding, sentence or order" and as to the "regularity of any proceedings of such inferior Court".
19. The observation of the Apex Court in the case of Sanjaysinh Ramrao Chavan Vs. Dattatray Gulabrao Phalke and others reported in (2015) 3 SCC 123 at paragraph No.14 is as follows:
".....Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is non- consideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in 13 setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal jurisprudence.
Revisional power of the court under Sections 397 to 401 of Cr.PC is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the courts may not interfere with decision in exercise of their revisional jurisdiction."
20. The same principle has been reiterated in multiple decisions.
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21. The revision petition has been filed assailing the judgment of the trial Court as well as that of the appellate Court on the following grounds:
A. That the complaint in the present instance was filed on 20.07.2018 whereas the father of the complainant had already filed a case against the accused on 28.02.2018 and that the cheque was issued by the accused in favour of the complainant after the complaint filed by the father of the complainant which version is inherently unbelievable.
B. That there was no whisper of the other transaction relating to C.C.No.1190/2018 which has raised number of doubts as regards to the transaction
- Para 12 and 13.
C. That the complainant had withdrawn amount by way of cash on 2 occasions and nothing had prevented her from making payment by way of RTGS to the accused - Para 16.15
D. That the transaction is stated to have taken place in the year 2010 whereas cheque was issued on 06.05.2018 and is clearly in relation to a time barred debt - Para 19
22. Clearly each of the contentions have been considered in detail by the trial Court as well as the Court of appeal and in exercise of revisional jurisdiction, no grounds are made out for re- appreciating the evidence.
23. In fact as regards to the requirements under Section 138 of the Act relating to issuance of cheque, presentation of the same within 3 months, relevant endorsement as contemplated under Section 138 of the Act, issuance of legal notice, granting 15 days time by way of legal notice to honour the claim and filing of the complaint within the requisite time period have all been answered in the affirmative as being made in accordance with the legal requirements 16 and the time limit provided under Section 138 of the Act.
24. As regards the capacity to pay, the factum of availability of Rs.10,00,000/- in the account and its withdrawal on 2 occasions as is evidenced from the bank statement would clearly reflect the financial capacity as rightly held concurrently by both the courts.
25. The courts have also held that the defence of misutilisation of cheque has not been backed by any positive action by way of complaint by the accused and accordingly, defence being a weak defence has not resulted in lifting of the presumption under Section 139 of the Act. This presumption having come into place as the issuance of cheque and the admission of signature by the accused No.2 is unequivocal. The defence that cheque was issued relating to the chit fund transaction has also been rightly disbelieved by the courts as no positive 17 evidence has been put forth in that regard by the accused. Both the Courts have rightly noticed that Sri. Madhava Poojari ought to have been examined if any credence was to be given to the defence raised by accused No.2 relating to misutilisation of the cheque.
26. Further, the defence that even if the version of the complainant was to be accepted as on date of presentation of the cheque, the debt was time barred does not defeat the rights of the complainant in the present factual matrix. The complainant has specifically asserted that the amount that was given to the accused was with the assurance that profits from the business would be given.
27. The mere factum of payment stated to have been made in 2010 would not make it a time barred debt as on the date of issuance of cheque in 2018. As to when the debt occurred is a factual inquiry. The nature of the transaction was that in lieu of the investment made by the complainant, a hotel 18 would be opened in the name of father of the complainant and profits from the business would be paid. Accordingly, when once a cheque is issued in light of the presumption of consideration by virtue of Section 139, it could be construed that a cheque has been issued towards a debt. As to whether the debt was time barred as on the date of presentation of cheque is to be proved by the accused. Even otherwise once a cheque is issued it could be construed to be a promise made in writing under Section 25(3) of the Indian Contract Act and if read in conjunction with illustration(e), the cheque could be construed to be valid and its dishonour actionable under Section 138 of NI Act. Accordingly, the contention that the cheque is issued as against a time barred debt and hence, unenforceable debt is liable to be rejected.
28. Further, when once the signature on the cheque has been admitted, the presumption under 19 Section 139 and 118 of the Act comes into play and such presumption has not been rebutted by any legally tenable defence.
29. Accordingly, there are absolutely no grounds made out for interference in exercise of the revisional jurisdiction. The mere fact that the cheque in the present case was presented at a point in time subsequent to the proceedings in C.C.No.1190/2018 would not in anyway affect the legal liability that flows from the issuance of cheque. In fact, cheque may have been post-dated cheque and that would not in any way affect the validity of the negotiable instrument.
30. Both the courts have concurrently held regarding existence of liability while accepting the version of the complainant relating to payment of money and such concurrent findings cannot be interfered with in exercise of revisional jurisdiction. Accordingly, petition is dismissed. The judgments of 20 conviction in CC No.3369/2018 stands affirmed as also the judgment in Crl. Appeal No.1518/2019.
Sd/-
JUDGE VP