Karnataka High Court
Raosaheb Satyagouda Patil vs Sri.Vilas S/O : Narayan Devagekar on 17 March, 2015
Author: Rathnakala
Bench: Rathnakala
1
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 17TH DAY OF MARCH, 2015
BEFORE
THE HON'BLE MRS. JUSTICE RATHNAKALA
CRIMINAL APPEAL NO.2813/2009
BETWEEN:
SRI RAOSAHEB SATYAGOUDA PATIL
PROPRIETOR PATIL COMPUTERS & SERVICES
RAMNATH KRUPA COMPLEX
COLLEGE ROAD, BELGAUM - 590 001.
... APPELLANT
(BY SRI R M KULKARNI, ADVS.)
AND :
SRI.VILAS
S/O : NARAYAN DEVAGEKAR
PROPRIETOR: "PINNACLES SYS"
H.NO.4209/3,
KHADAK GALLI,
BELGAUM.
... RESPONDENT
(BY SRI RAM P GHORPADE, ADV.)
THIS CRIMINAL APPEAL IS FILED U/S 378(4) of
CR.P.C BY THE ADVOCATE FOR THE APPELLANT
2
SEEKING TO SET ASIDE THE JUDGMENT DATED
11.05.09 IN C.C.NO.1439/2004 ON THE FILE OF THE JMFC
III COURT, BELGAUM AND THE ACCUSED BE
PUNISHED FOR OFFENCE P/U/S 138 OF THE NI ACT
AND THIS APPEAL BE ALLOWED.
THIS APPEAL COMING ON FOR FINAL HEARING
THIS DAY, THE COURT MADE THE FOLLOWING:
JUDGMENT
This appeal is assailed against the judgment of acquittal returned by the learned Magistrate thereby, acquitting the accused of the charges of offence punishable under Section 138 of the N.I.Act, 1882.
2. Briefly stated, the fact is:
The appellant herein is the dealer in sales of computer and its peripherals. The accused approached him as a sub-dealer and used to purchase computer and peripherals from him. He used to take the items, sometimes on cash and sometimes on credit basis and used to pay the credit after sometime. He took the computers and peripherals worth Rs.1,15,000/- from time to time as per his requirements and failed to pay the credit balance 3 amount; he did not pay the credit amount. Finally, on his repeated request the accused issued a cheque bearing No.653599 dated 26.04.2003. When the said cheque was presented to the Bank, the same was dishonoured with a memo 'insufficient funds'. Immediately, the complainant issued legal notice to the accused on 02.05.2003 calling upon him to clear the amount mentioned in the cheque within 15 days of receipt of the notice. But the accused refused to accept the notice and the notice was returned with an endorsement as 'not claimed' on 21.05.2003. The accused committed the offence under Section 138 of N.I.Act by issuing a cheque knowing fully well that there was no sufficient fund in his account to clear the amount mentioned in the cheque.
3. Thereafter, the complainant presented the private complaint before the Court below. After presentation of the complaint, the learned Judge took cognizance of the offence under Section 138 of N.I.Act. After recording the sworn statement of the complainant, registered the complaint, procured the accused; the accused was on bail; his plea about the complaint 4 allegation was recorded; he pleaded not guilty and claimed to be tried; the complainant was examined as PW.1 and marked Exs.P.1 to P.6 on his behalf. During his cross-examination, Exs.D.1 to D.7 were marked. The statement of the accused under Section 313 of Cr.P.C. was recorded. He denied the incriminating circumstances appearing against him in the evidence of PW.1. Though he submitted that he will be filing his statement in writing, no such defense statement was filed by him. After giving audience to both, the learned Magistrate acquitted the accused in respect of the offence under Section 138 of the N.I.Act.
4. Sri R M Kulkarni, learned Counsel for the complainant submits that admittedly the accused used to purchase computer and peripherals on credit basis. But the learned Magistrate erroneously has drawn adverse inference against him for non- production of documentary evidence like daily transactions, ledger book, audit account book and cash book pertaining to accounts. As such, the invoices and delivery challans were produced as Exs.D.1 to D.7. The main reason for dismissal of the complaint 5 was, as per the extract of the ledger account / Ex.D.7, the outstanding amount was Rs.1,15,499/- but the cheque amount was for Rs.1,15,000/- and this was inferred by the learned Magistrate as a discrepancy in respect of the outstanding amount payable to the complainant. Inspite of the documentary proof of Ex.D.7, on stray admission during the cross-examination of PW.1, that he was not sure of the exact balance amount due by the accused, on this flimsy ground the complainant was non-suited.
5. He further submits that, it was not at all the case of the complainant that the accused had issued the cheque towards the full and final settlement of the transaction between them. On her own assumption, the learned Magistrate has dismissed the complaint. Hence, the finding of the Court below is perverse. Though the accused did not enter the witness box, the learned Magistrate has arbitrarily held that the accused succeeded in disproving the case of the complainant and failed to invoke the statutory presumptions under Section 139 of the N.I.Act. When the accused did not dispute that he had issued the cheque / 6 Ex.P.1, the presumption under Section 139 of the N.I.Act shall follow. The presumption available under Section 118 (a) and (g) of the N.I.Act shall ensue in favour of the holder of the cheque / complainant unless it was rebutted or until the contrary is proved that he is the holder of the cheque in due course. Under the circumstances, the order passed by the Court below in acquitting the accused in respect of the offence under Section 138 of the N.I.Act is not justified and liable to be set aside and to be held guilty under Section 138 of the N.I.Act.
6. In reply, Sri Ram P Ghorpade, learned Counsel for the respondent supports the judgment of the Court below and submits that the respondent / accused was not the sub-agent of the complainant. He has not at all due of any amount to the complainant. The core of the offence under Section 138 of N.I.Act is that the cheque must have been issued towards legally enforceable debt / liability. In the case on hand, the complainant did not produce his accounts and the ledger extract, income tax returns etc. to demonstrate that the accused owed him 7 Rs.1,15,000/-. During the cross-examination itself, the accused was able to demonstrate the discrepancy and uncertainty of complainant's case. The complainant was not at all certain as to how much of amount was due to him by the accused. Rightly, the Court below has dismissed the complaint and acquitted the accused of the charges under Section 138 of the N.I.Act.
7. In the light of the above rival submissions, the sole point that arises for consideration is, 'Whether the cheque in question was issued towards outstanding liability?'
8. It is the case where the accused has not disputed or disowning of the cheque / Ex.P.1 issued for an amount of Rs.1,15,000/-. The notice issued to him prior to filing the complaint is deemed to be served since 'not claimed'. During the cross-examination of PW.1, no effort is made to demonstrate that he is not residing in the address mentioned in postal cover. Be that as it may, his effort during the cross-examination was to deny 8 the allegation that he is not the sub-agent of the complainant and there is no such agreement between him and the complainant. However, the tone of cross-examination and the documents produced from his custody confronted to PW.1 while in witness box, admitted by him and marked as Exs.P.1 to P.7 demonstrate that there was a ongoing business relationship between the two. If there were any problem with the computers / goods taken from the complainant he would return the same. After selling the computer which was taken by him from the complainant, he used to credit the amount due to his account. It was extracted during the cross-examination of PW.1 that after filing of the complaint the accused gave him Rs.20,000/- and also returned some items. At one stage, the complainant has stated that the accused is due to him for a sum of Rs.95,000/- as on today, in respect of the last transaction between the parties, but not towards any additional amount.
9. During cross-examination of PW.1, it was suggested that, the cheques issued by the accused whenever could not be 9 encashed subsequently, he had paid the cash amount in respect of such cheques and no case was lodged in respect of those cheques. It was his another suggestion that as on 18.01.2003, the accused was due for only Rs.1,01,400.06, for which the complainant could not answer without ascertaining from the accounts. It was the further suggestion that as on 28.04.2003 also he was due Rs.1,01,400.06 only. The witness identified the Invoices and the Delivery Challans pertaining to the articles delivered to the accused, which were marked as Exs.D.1 to D.6. However, he clarified that the transactions in Delivery Challans will not be entered in his sales account. He admitted that there was difference of Rs.5,500/- between the Invoice bearing No.00447 / Ex.D.4 and the Delivery Challan No.545 dated 15.11.2000 / Ex.D.3. Likewise, there is a difference of amount between the Invoice / Ex.D.6 and delivery challan / Ex.D.5 for an amount of Rs.250/-. When he was confronted with Ex.D.7 / the extract of the statement of account maintained by the complainant in respect of his transaction with the accused, he admitted the same 10 but still it was the suggestion that the accounts in Ex.D.7 is manipulated and the accused is not due for the cheque amount. It is noteworthy that final suggestion was, the cheque was forcibly taken from the accused by promising to deliver the goods which was denied.
10. The variation of amount mentioned in the Delivery Challans and the Invoices, non-production of the account extract and the Income-Tax returns, Balance Sheet and Ledger weighed more for the Court below to disbelieve the case of the complainant. Though the accused could not build up a definite defense for himself during the cross-examination of PW.1, having not disputed the authorship of the cheque / Ex.P.1, the statutory presumption under Section 139 of the N.I.Act is an inevitable eventuality. The provision reads thus:
"Section 139 of N.I.Act, 1881 - Presumption in favour of holder:
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to 11 in section 138 for the discharge, in whole or in part, of any debt or other liability."
11. In a judgment rendered by the Goa Bench of Bombay High Court in the case of Devidas S. Mardolkar Vs. Harichandra Mandrekar reported in AIR 2009 (NOC) 396 (BOM.), it was held that 'if the Courts were to insist that cheque must be accompanied by some documentary proof to indicate an existence of the liability, the Courts would be only reading a requirement which is not prescribed by law but also negating the presumption required to be drawn under section 139 of the N.I.Act'.
The Apex Court in the case of Goa Plast (P) Ltd. Vs. Chico Ursula D'Souza reported in 2004 Crl. L. J. 664, at para No.25 is held as follows:
"25. The object and the ingredients under the provisions, in particular, Sections 138 & 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions, particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, 12 it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the Bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious set back. The Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a Civil Court is a long drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee."
12. The accused who submitted that he will be filing his written statement has not filed any such statement to demonstrate as to what is his stand in respect of the cheque in question. The discrepancy between the Invoices and the Delivery Challans are of no consequence, since they do not reflect the cash transaction. Having not disputed the business relationship with the accused and having admitted issuance of the cheque / Ex.P.1, the burden heavily rested on the accused to show that he is not due of the 13 amount mentioned in the cheque. The tenor of cross- examination suggests that he was in disagreement about the amount of Rs.1,15,000/- mentioned in the cheque. If that were to be so, it was for him to adduce evidence to clarify his stand about the cheque amount. The statutory presumption under Section 118 of N.I.Act, more particularly, Subsections (a) and (g) ensue in favour of the holder of the instrument / complainant until the contrary is proved which reads thus:
"Section 118 - Presumptions as to negotiable instruments: - Until the contrary is proved, the following presumptions shall be made:-
(a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(g) that holder is a holder in due course - that the holder of a negotiable instrument is a holder in due course."
13. The business relationship having been proved, the cheque having been issued by the accused, which is not been 14 disputed and the statutory presumptions not rebutted, the learned Magistrate fell into error in non-suiting on complaint on a flimsy ground, that the amount due as per Ex.D.7 is Rs.1,15,499.06/- and the cheque amount is Rs.1,15,000/-. It is not for the complainant to explain the discrepancy but for the accused who issued the cheque and who has produced Ex.D.7, but did not make any attempt to falsify this document. Hence, all the ingredients of N.I.Act having been established, even if after filing of the complaint the accused had repaid some part of the amount due and returned articles / goods out of records, without compounding the offence in accordance with Section 147 of N.I.Act, it is inevitable to hold that he is guilty of the offence under Section 138 of N.I.Act and the judgment of the Court below is liable to be set aside.
14. Having found the accused guilty for the offence under Section 138 of N.I.Act, the next concern is about the punishment to be imposed. It is more than 12 years since the accused became due for the cheque amount. Having regard to the nature of the 15 transaction between the parties, in my considered opinion rather than to impose punishment of imprisonment, fine of double the cheque amount would be the appropriate punishment.
15. Accordingly, the appeal is allowed. The judgment of acquittal returned by the JMFC (III Court), Belgaum in Crl.Case No.1439/2004 is set aside. The respondent / accused is convicted for the offence under Section 138 of N.I.Act by imposing fine of Rs.2,30,000/-, payable within 15 days from the receipt of the copy of this judgment. On deposit of the above fine amount, Rs.2,30,000/- shall be paid to the complainant as compensation. If the accused fails to deposit the fine amount within 15 days from the date of receipt of the copy of this judgment, he shall undergo imprisonment for 6 months.
Sd/-
JUDGE nvj