Karnataka High Court
M/S M K Enterprises vs Vishwanath Rao 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. 382/2021
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. Late K. Panju Poojari
Aged about 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:
Vishwanath Rao Pole
S/o. Late Jagannatha Rao Pole
Aged about 67 years
R/at No. 301/19, 6th Main,
2
14th Cross, Vyalikaval Extension,
Malleshwaram,
Bangalore 560 003.
...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.1190/2018 3 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 while sentencing the accused had directed the 2nd accused to pay penalty of Rs.21,00,000/- 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.21,00,000/- 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.1517/2019 under Section 374(3) of Cr.P.C. which having been dismissed, the present revision petition has been filed.
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3. The parties are referred to by their rank before the trial Court (Court of first instance) for the purpose of convenience.
4. The complainant had filed a complaint against the accused complaining of commission of offence under Section 138 of the Act as it was stated that cheque bearing No.152597 dated 13.12.2017 for an amount of Rs.21,00,000/- which was issued to the complainant came to be dishonoured upon presentation with an endorsement "funds insufficient". As the complainant got issued legal notice on 08.01.2018 and as the accused had neither paid the cheque amount nor replied to the notice, complaint came to be lodged.
5. The brief facts leading to the transaction are that, the complainant and accused No.2 were stated to be family acquaintances and as the 2nd accused was running a chain of hotels and wanted financial help had requested the complainant to invest 5 and extend financial assistance to a tune of Rs.21,00,000/- with a promise that the accused would pay an amount of Rs.50,000/- per month in return.
6. It is stated that as the accused had committed default in honouring the understanding, issued a cheque bearing No.152597 drawn on Dena Bank towards repayment of the amount paid by the complainant. As narrated above, as the cheque was not honoured, complaint came to be filed.
7. Complainant had examined himself as P.W.1 and had got marked Exs.P.1 to P.21 while the accused No.2 had examined himself as D.W.1 and had got marked documents as Exs.D.1 and D.2.
8. The main case as put forth by the accused as could be gathered from the evidence recorded is that, the accused being a politician was also running a chain of hotels and his younger brother - Sri. Madhava Poojari was looking after the affairs of the 6 hotels. It is further submitted that his brother was involved in chit fund transaction with the accused and after having taken the chit money, it appears the cheque of the accused was offered as security to the complainant.
9. The trial Court after detailed appreciation of evidence has recorded findings on the points for consideration and had passed a judgment of conviction.
10. The trial court has recorded a finding that ingredients of Section 138 of the Act were adhered to as regards the presentation of cheque and filing of complaint within the time limit prescribed, while also noticing the nature of endorsement issued by the Bank. The trial Court has noticed that the cheque was presented within three months; that notice - Ex.P.3 was issued on 08.01.2018; that despite the service of legal notice the accused had not responded and 7 accordingly, after the lapse of 15 days further action has been taken.
11. Insofar as source of funds is concerned, the trial Court has taken note of financial standing of the complainant and has also taken note of the relevant documents, such as Income Tax Returns at Ex.P.14, details of the P.F. and gratuity at Ex.P.15 and document reflecting receipt of financial benefits upon retirement as per Ex.P.16. The trial Court noting that the complainant was working as a Senior Manager at ITC and was an Income Tax Assessee has found that the complainant had financial capacity to advance the amount as asserted in the complaint.
12. The trial Court has noted that Signature on the cheque is admitted. It has further held that once the fact that cheque belongs to him and is signed by him having been admitted, presumption would operate. It was held that though the accused had set up the defence as noticed above, no efforts are 8 made to lead evidence of Sri. Madhava Poojari and if it is so that cheque was misused, no steps were taken by the accused regarding the same. Accordingly, the trial Court has concluded that the cheque was issued as regards a legally payable debt and in so concluding, has relied on the presumption under Section 139 of the Act.
Proceedings in Crl.A.No. 1517/2019:
13. As against the order of conviction, Crl.A.1517/2019 came to be filed under Section 374(3) of Cr.P.C. Before the appellate Court, the accused had contended that the trial Court had not correctly appreciated the aspect of capacity of the complainant to lend the money; that the cheque of the accused had been misutilised; that the admission of the complainant that he had paid an amount of Rs.5,00,000/- by way of cheque and the remaining amount by cash which payment was not backed by sufficient evidence; that the cheque book containing 9 cheque No. 152597 was issued in the month of May, 2010 and accordingly, issuance of cheque in the month of December, 2017 raised serious doubts; that it was the suggestion of D.W.1 (accused No.2) himself that an amount of Rs.16,00,000/- was paid to the accused to pay the remittance to ECI and PF as workers contribution.
14. The Appellate Court has considered in detail documentary evidence at "P" Series which included Income Tax Returns and Bank Statements and has held that the said documents are primary documentary evidence which would indicate capacity of the complainant to pay and accordingly, affirmed the findings of the trial Court. The Appellate Court has observed that the complainant being in receipt of retirement benefits had lent amounts to the accused periodically.
15. The Appellate Court has also addressed the contention of the accused that the amount advanced 10 by the complainant was not a loan and has observed that even if the amount is construed to be an investment with return of profit, cheque was issued towards such debt or liability whereby the accused had sought to repay the amount borrowed and such issuance of cheque would satisfy the ingredients of Section 138 of the Act and that offence was committed as it was not honoured.
16. As regards the contention that cheque leaf belonged to the date of May, 2010 and the same was issued in the year 2017, the court had opined that, as the complainant and the accused had transacted between the years 2008 to 2010 the issuance of post- dated cheque could not be ruled out and such issuance of cheque did not affect the validity of the instrument.
17. The appellate Court has also considered the contention of the accused that cheque issued by him was in fact presented by way of security by his 11 brother - Sri. Madhava Poojari to the complainant relating to the chit fund transaction. The appellate Court has observed that the brother of the accused was not examined and that no rebuttal evidence was led in to demonstrate that the cheque was issued as security to the chit fund transaction.
18. The Appellate Court has further observed that the purported defence raised by the accused did suggest that the complainant had the capacity to pay. The appellate Court has discarded the contentions raised by the accused as being vague and cannot be acceptable rebuttal evidence. The appellate court has also reiterated that the presumption under Section 118 and 139 of the Act have not been rebutted. Present Revision Proceedings:
19. 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:12
A. Capacity to pay - Para 11.
B. Misutilization of Cheque - Para 12.
C. Transaction is loan transaction and the
amount if invested for business the investor is entitled for only profit - Para 13.
D. Payment of Rs.5,00,000/- by way of cheque and payment of remaining amount by way of cash and such payment by way of cash cannot be accepted. - Para 15.
E. Payment made between 2008 to 2010 while cheque is issued in the year 2017 and accordingly, cheque was issued as regards time barred debt - Para
16. F. Non consideration of the fact that during the course of proceedings relating to the present complaint, the daughter of the complainant had issued another cheque which is an action that no prudent person would have resorted to and accordingly, transaction is doubtful - Para 19.
20. The point that arise for consideration in the present revision proceedings is:
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Whether sufficient grounds are made out for interference with the concurrent findings of the trial Court as well as the appellate Court in exercise of the revisional power under Section 397 of Cr.P.C.?
21. 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".
22. 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 14 non- consideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in 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."15
23. The same principle has been reiterated in multiple decisions.
24. The petitioners have raised once again the same grounds as had been raised before the trial Court as well as the Appellate court and on such grounds have sought to assail the validity of the judgment.
25. It must be noted that both the Courts have categorically held in the affirmative as regards to the financial capacity of the complainant to have advanced amount to the accused while taking note of the employment of the complainant as the Senior Manager in ITC and after appreciating the documents evidencing receipt of retirement benefits by the complainant.
26. The Courts have also envisaged of a situation where a post-dated cheque may have been 16 issued and such issuance of post-dated cheque would not affect the validity of the cheque issued.
27. The contention of mis-utilisation of cheque by the brother of accused No.2 has not been accepted as no efforts were made by the accused to summon the brother - Sri. Madhava Poojari before the Court. Further, the Courts have noticed that no evidence was led in regarding the chit fund transaction. Accordingly, the courts have held that the accused has not been successful in rebutting the presumptions.
28. Clearly the aspect of cheque bearing the signature of accused No.2 is admitted. Once such admission is made, presumption under Section 139 and 118 of the Act would be raised and there is no legally acceptable evidence that has been adduced to rebut such presumption.
29. Further, the defence that even if the version of the complainant was to be accepted as on 17 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.
30. The mere factum of payment stated to have been made between 2008 and 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 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 18 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.
31. Further, when once the signature on the cheque has been admitted, the presumption under Section 139 and 118 of the Act comes into play and such presumption has not been rebutted by any legally tenable defence.
32. Accordingly, there are absolutely no grounds made out for interference in exercise of the revisional jurisdiction. In fact, cheque may have been 19 post-dated cheque and that would not in any way affect the validity of the negotiable instrument.
33. Concurrent findings on facts cannot be relooked into by the Court exercising revisional power. Further, even if a different conclusion could be arrived at in the present proceedings, the same would not be a ground to interfere with the concurrent findings of both the Courts.
34. There is no perversity in any of the findings by the Courts below and accordingly, no grounds are made out for exercise of revisional power in the present facts.
35. Though much is made out by the petitioners that after the cross-examination of the complainant in the present case, another cheque has been presented by the daughter of the complainant which would indicate prima facie and improbable factual situation, however, that by itself would have 20 no impact on consideration of issuance of cheque in the present case and the presumption under Section 139 rightly relied upon by the Courts below has not been dislodged by putting forth appropriate evidence.
36. Accordingly, the petition is dismissed. The Order of the Court of first instance in C.C.No. 1190/2018 dated 12.06.2019 stands affirmed. So also the order of dismissal of appeal in Crl.A. No.1517/2019 dated 23.11.2020 stands confirmed.
Sd/-
JUDGE VP