Karnataka High Court
Srichand S/O Laxman Vernekar vs Sekhar R Kundagol on 23 November, 2020
Author: Ravi.V.Hosmani
Bench: Ravi. V.Hosmani
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 23RD DAY OF NOVEMBER 2020
BEFORE
THE HON'BLE MR.JUSTICE RAVI. V.HOSMANI
CRIMINAL APPEAL NO.2921/2012
BETWEEN
SRICHAND S/O LAXMAN VERNEKAR,
AGE: 45 YEARS, OCC: BUSINESS,
R/O YALAKKISHETTAR COLONY,
GANDHINAGAR, DHARWAD.
... APPELLANT
(BY SRI V.G.BHAT, ADVOCATE)
AND
SEKHAR R.KUNDAGOL,
AGE: MAJOR, OCC: EMPLOYEE,
R/O: OPP: TO D-1 QUARTERS,
JSS COLLEGE COMPOUND,
VIDYAGIRI, DHARWAD.
... RESPONDENT
(BY SRI P.V.GUNJAL, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 OF
CR.P.C. SEEKING TO SET ASIDE THE JUDGMENT AND ORDER OF
ACQUITTAL PASSED IN C.C.NO.607/2007, DATED 27.08.2012,
PASSED BY THE PRINCIPAL CIVIL JUDGE AND PRINCIPAL
J.M.F.C., DHARWAD AND TO CONVICT THE ACCUSED IN
ACCORDANCE WITH LAW AND COMPENSATION BE AWARDED IN
ACCORDANCE WITH PROVISION OF N.I. ACT.
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THIS APPEAL BEING RESERVED FOR JUDGMENT ON
03.11.2020, THIS DAY, THE COURT, DELIVERED THE
FOLLOWING:
JUDGMENT
This appeal is preferred by the appellant challenging the judgment dated 27.08.2012 passed by the Principal Civil Judge and Principal JMFC., Dharwad, in C.C.No.607/2007 acquitting the respondent of the offences punishable under Section 138 of the Negotiable Instruments Act (hereafter referred to as 'N.I.Act' ).
2. The brief facts of the case are that a complaint came to be filed under Section 200 of Code of Criminal Procedure, 1973 (hereinafter referred to as "Cr.P.C." for short) by complainant against accused stating that complainant and accused are acquainted with each other and accused was a regular customer of complainant who was a dealer in gold & silver articles. During April 2006, the accused purchased gold ornaments worth Rs.2,50,000/- and paid Rs.70,000/- in cash and for the balance amount of Rs.1,80,000/- issued a post dated cheque No.248572 drawn on Syndicate Bank, Vidyagiri 3 Branch, Dharwad dated 10.05.2006. A bond was also given reiterating the promise. When the cheque was presented for payment on 02.08.2006, it returned unpaid. The complainant represented the cheque once again on 01.09.2006, but the cheque came to be dishonored once again and returned along with Banker's intimation 'insufficient funds'. Thereafter, complainant got issued statutory notice through RPAD. The same was served on the accused on 03.10.2006. Accused did not repay the cheque amount or replied to the notice, thereby, constraining the complainant to present the complaint.
3. After recording sworn statement of the complainant, the trial Court took cognizance and ordered summons to the accused. On appearance, accused pleaded not guilty and sought trial. On behalf of complainant, two witnesses, namely PW-1 and PW-2 were examined and Exs.P.1 to P.9 were marked. On behalf of accused, DW-1 and DW-2 were examined. No documents were marked. After explaining the incriminating material to accused, his 4 statement under Section 313 of Cr.P.C. was recorded. Thereafter on consideration of evidence available, the trial Court framed the following points for consideration.
"Whether the complainant proves beyond reasonable doubt that the accused had issued the cheque bearing No.248752 dated 10.05.2006 for Rs.1,80,000/- drawn on Syndicate Bank, Vidyagiri Branch, Dharwad in favour of him in lieu of legally recoverable debt payable to him, that it came to be returned for 'insufficient funds', intimated to him on 2.09.2006, that whether the accused failed to make the payment of the cheque amount to him in spite of the demand made by him by legal notice dated 30.09.2006 and thereby committed the alleged offence punishable under Section 138 of Negotiable Instruments Act."
After answering the same in the negative, the trial Court proceeded to acquit the accused. Challenging acquittal, complainant is in appeal.
4. Learned counsel Shri. V.G. Bhat appearing for appellant submitted that the impugned judgment passed by the trial Court is wholly unsustainable as the same is opposed 5 to settled principles of law under N.I.Act. It was submitted that when accused admitted his signature on the cheque and also admitted its issuance to the complainant, legal presumption is available to the complainant under Sections 118 and 139 of the N.I. Act and it was for the accused to establish a probable defence based on cogent evidence.
5. Learned counsel submitted that the defence of accused was to the effect that cheque in question was given as security to a loan transaction between complainant and one Srinivasa Tonapi for a sum of Rs.5,000/-. However, accused failed to lead any evidence in support of said contention. Such being the case, the trial Court gravely erred in placing the onus on the complainant to prove the loan transaction beyond all reasonable doubt, which is totally illegal and arbitrary. It was further contended that accused did not respond to the statutory notice. In the case on hand, in addition to cheque, accused has also executed a bond for the amount mentioned in the cheque, in favour of the complainant. But the trial Court has failed to consider the same.
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6. On the other hand, learned counsel Shri. P.V. Gunjal appearing for respondent/accused submitted that the accused in this case is working as a peon in an educational institution. As such it was not possible for him to have purchased gold ornaments worth Rs.2,50,000/-. That apart, complainant claims to be a dealer in gold and silver ornaments, but admitted in his cross examination that he does not possess any license for doing such business and that he has not maintained any books of accounts with regard to such business.
7. The complainant further admitted that he closed his gold shop much earlier and was doing real estate business, earning about Rs.10,000/- per month. It was further admitted that complainant had filed few other cheque bounce cases for a total value of Rs.6,00,000/-. As the complainant admitted that he had no license to carry on such business, his financial capacity was seriously disputed. Learned counsel relied upon decision of Hon'ble Supreme Court in the case of BASALINGAPPA VS. MUDIBASAPPA reported in (2019) 5 7 SCC 418, in support of his contention, that when financial capacity of complainant is disputed by accused, burden would be on complainant to establish the same and on failure to do so, acquittal would be justified.
8. Learned counsel Shri. V.G. Bhat in reply submitted that the Hon'ble Supreme Court in Basalingappa's case has also held that there is a presumption regarding valid consideration in favour of holder of a cheque when signature of accused on the cheque is admitted. In this case accused admitted that the cheque was signed by him and given to complainant. As there was no defence evidence, the presumption mentioned above, would come in to play. However the trial Court has held that the burden of proving the entire transaction would be on the complainant and complainant failed to discharge such burden. It was submitted that as accused did not establish his contentions by cogent evidence, accused cannot be held to have rebutted the presumption and therefore acquittal of accused resulted in miscarriage of justice.
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9. I have heard the learned counsel, perused the impugned judgment and the record.
10. In his complaint, complainant stated that he was in business of making and selling articles of gold and silver; accused was his regular customer since ten years and had purchased gold ornaments worth Rs.2,50,000/- during April 2006 by paying Rs.70,000/- in cash and issued cheque for Rs.1,80,000/- for the balance. In cross-examination, complainant says that accused purchased two old type 'baju bandh' ornaments of 23.80 carat purity. But later says that the ornaments were a 'baju bandh' and a 'nagmurgi'. Even there is no consistency regarding whether the ornaments were made by him or he was just dealing in them. In cross examination, at one stretch he says gold ornament 'nagmurgi' sold by him to the accused belonged to his family elders but at another he says it was made by him.
The complainant further admits that he is not doing gold business at present and that the gold shop he had near 'Gandhi Chowk', Dharwad was closed in 1996. Thereafter, he 9 says that he is into real estate business. But this is in direct contradiction to contents of legal notice as well as complaint, in which there is assertion that complainant is dealing in gold and silver ornaments. The complainant also admitted that he has not maintained any records regarding his gold business, not filed Income Tax Returns and does not have any license for the business.
11. On the other hand, it is the defence of the accused that he knew the complainant through one Srinivas Tonapi, who had borrowed a sum of Rs.5,000/- from complainant. As a security for said loan, complainant had taken a blank cheque and signed blank bond paper, which were now being used to extract money from him, even after repayment of loan amount of Rs.5,000/- by Srinivasa Tonapi. In this regard accused has elicited from PW-1 that he had filed complaint for similar amounts against several other persons, aggregating to Rs.6,00,000/-, without proving his financial capacity to lend such huge money. Thus, accused substantiated a doubt 10 regarding financial capacity of the complainant as well as regarding the transaction in gold ornaments.
12. Interestingly, there is no mention about the bond claimed to have been executed by the accused (marked as Ex.P.7) in the statutory notice. There is also no mention about written acknowledgement (marked as Ex.P.8). The trial Court on detailed examination of evidence and taking note of entire facts and circumstances of case come to a conclusion that complainant failed to prove existence of legally recoverable debt and his financial capacity. Though learned counsel for appellant made submissions relying upon Basalingappa's case (Supra) to the effect that when there is admission by accused regarding his signature on the cheque and its issuance to complainant, benefit of presumption accrued to complainant and he is not required to prove the transaction beyond reasonable doubt; in this case, the accused having raised a probable defence, has substantiated the same through admissions in cross-examination of complainant. 11
13. Having due regard to the enunciation of law in Basalingappa's case (supra), it is no doubt indisputable that presumption is available in favour of a holder of a cheque with regard to existence of a legally recoverable debt, however the same is a rebuttable presumption and the standard of proof for rebuttal is preponderance of probabilities. The various contradictions, omissions as well as improvements elicited in cross-examination of complainant cast serious doubts about the transaction between complainant and accused as also his financial capacity.
14. Under the circumstances, I do not find any perversity nor grave irregularity in the judgment passed by the trial Court. The appeal lacks merit and is accordingly dismissed.
SD/-
JUDGE PSG/BVK