Karnataka High Court
M/S Vagvilas Software Pvt. Ltd vs Sri.Sushant S/O Subrai Valvoikar on 9 October, 2024
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NC: 2024:KHC-D:14874
CRL.A No. 100044 of 2017
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 9TH DAY OF OCTOBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE S.RACHAIAH
CRIMINAL APPEAL NO. 100044 OF 2017 (A)
BETWEEN:
M/S VAGVILAS SOFTWARE PVT. LTD.,
A REGISTERED PRIVATE LIMITED COMPANY,
REPRESENTED BY ITS
AUTHORISED SIGNATORY,
SRI. CHANDRASHEKAR
S/O BASAPPA KINNAL, AGE: 33 YEARS,
OCC: SERVICE, R/O: HUBLI.
R/O HAVING ITS REGISTERED OFFICE AT
CTS NO. 844, IST FLOOR
DURGAD BAIL HUBBALI.
...APPELLANT
(BY SRI. PRAKASH.K.JAWALKAR, ADVOCATE)
AND:
Digitally signed
by SRI. SUSHANT S/O SUBRAI VALVOIKAR,
SREEDHARAN
BANGALORE AGE: 37 YEARS, OCC: BUSINESS,
SUSHMA
LAKSHMI
PROPRIETOR OF CLEAR VISION COMPUTERS,
Location: HIGH BUDUWARPETH BAZAR, PONDA,
COURT OF
KARNATAKA DISTRICT: SOUTH GOA, PIN - 403 401.
...RESPONDENT
(BY MISS. RANJITA ALAGWADI, AMICUS CURIAE)
THIS CRIMINAL APPEAL IS FILED UNDER SECION 378(4)
OF CR.P.C., PRAYING TO SET ASIDE THE IMPUGNED
ACQUITTAL JUDGEMENT PASSED BY THE JMFC, 1ST COURT,
HUBLI IN C.C.NO. 4213 OF 2015 ON 25TH NOVEMBER 2016 FOR
OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT.
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NC: 2024:KHC-D:14874
CRL.A No. 100044 of 2017
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 09.07.2024 COMING FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, THIS COURT DELIVERED THE
FOLLOWING:
CORAM: THE HON'BLE MR. JUSTICE S.RACHAIAH
CAV JUDGMENT
(PER: THE HON'BLE MR. JUSTICE S.RACHAIAH)
1. This Criminal Appeal is filed by the appellant who is the complainant before the Trial Court being unsuccessful in the Trial Court has approached this Court seeking to set aside the judgment of acquittal dated 25.11.2016 in C.C No.4213/2015 on the file of JMFC, 1st Court, Hubballi.
Brief facts of the case:
2. The case of the complainant is that, the complainant was a dealer in various computers and its peripherals. The accused had approached him and purchased some goods on a credit basis. The complainant was maintaining books of account for having sold the items to the accused from time to time. As per the records, the accused was due for a sum of Rs.4,36,406/- as on 20.08.2009. The accused had issued a cheque to the -3- NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017 complainant and asked him to present the said cheque for encashment. The complainant presented the cheque for encashment on 16.11.2009. However, the said cheque came to be dishonoured on 05.12.2009 and the same was intimated to the complainant on the same day. The complainant gave intimation to the accused about the dishonour of cheque through legal notice and it was issued by way of Registered Post, Acknowledgment Due on 12.12.2009. However, the said notice came to be returned on 16.12.2009 as the sendee had unclaimed. After having received the intimation by the complainant, the complainant filed a complaint before the Jurisdictional Magistrate having jurisdiction and the learned Magistrate after taking cognizance proceeded with the case.
3. To prove the case of the complainant, the complainant examined himself as P.W.1 and also got examined another witness as P.W.2 and got marked 21 documents as Exs.P1 to P21. On the other hand, the accused has not chosen to lead any evidence. The Trial Court after appreciating the oral and -4- NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017 documentary evidence on record opined that the complainant had not proved the legally recoverable debt or liability and therefore, acquitted the accused.
4. Heard Sri.Prakash K.Jawalkar, learned counsel for appellant and Smt.Ranjita Alagwadi, learned Amicus Curiae for the respondent.
5. It is the submission of the learned counsel for the appellant that the findings of the Trial Court in recording the acquittal appears to be erroneous and illegal, therefore, it is liable to be set aside.
6. It is further submitted that the Trial Court arrived at a conclusion that the complainant has not proved the case beyond reasonable doubt and opined that the initial burden is upon the complainant to prove that there is a legally recoverable debt or liability, then only the complainant can avail the presumption under Section 139 of N.I Act itself is contrary to the settled principle of law. The approach adopted by the Trial Court in appreciating the facts and law is not appropriate and proper. Therefore, the impugned judgment needs to be looked into.
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7. It is further submitted that initially the complainant is not required to prove his case beyond reasonable doubt, once the execution of the cheque is admitted by the accused. In fact, initial burden lies on the accused to rebut the presumption raised under Section 139 of N.I Act. However, the Trial Court had lost sight of the settled position of law, consequently, the impugned judgment is passed.
8. It is further submitted that the complainant has even though produced several documents relating to the transaction and also proved the liability of the accused, the Trial Court ignored those documents and adopted the wrong approach and dismissed the complaint, which is contrary to the settled principle of law. Therefore, the judgment of acquittal passed by the Trial Court is liable to be set aside. Making such submissions, the learned counsel for the appellant prays to allow the appeal.
9. Per contra, the learned Amicus Curiae for respondent vehemently justified the judgment of acquittal passed by the Trial Court and further he submitted that, the -6- NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017 accused need not prove the case at the first instance. Further, he submitted that it is a settled principle of law that the accused may rebut the presumption by proving the contrary even relying on the documents produced by the complainant.
10. It is further submitted that the Trial Court has rightly considered the material on record and opined that the complainant has not proved the case beyond reasonable doubt regarding the debt or liability. Therefore, dismissed the complaint. The said dismissal is appropriate and proper, interference with the said findings may not be necessary. Making such submissions, the learned Amicus Curiea for respondent prays to dismiss the appeal.
11. After having heard the learned counsel for the respective parties and also perused the findings of the Trial Court, it is relevant to refer the judgment of the Hon'ble Supreme Court in the case of BIR SINGH v. -7-
NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017 MUKESH KUMAR1, wherein paragraph Nos.18, 20 and 24 reads thus:
"18. In passing the impugned judgment and order dated 21-11-2017 [Mukesh Kumar v. Bir Singh, 2017 SCC OnLine P&H 5352], the High Court misconstrued Section 139 of the Negotiable Instruments Act, which mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Needless to mention that the presumption contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque.
20. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the 1 (2019) 4 SCC 197 -8- NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017 prosecution 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 and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact as held in Hiten P. Dalal [Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 : 2001 SCC (Cri) 960] .
24. In K.N. Beena v. Muniyappan [K.N. Beena v. Muniyappan, (2001) 8 SCC 458 : 2002 SCC (Cri) 14] , this Court held that in view of the provisions of Section 139 of the Negotiable Instruments Act read with Section 118 thereof, the Court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was rebuttable and could be rebutted by the accused by proving the contrary. But mere denial or rebuttal by the accused was not enough. The accused had to prove by cogent evidence that there was no debt or liability. This Court clearly held that the High Court had erroneously set aside the conviction, by proceeding on the basis that denials/averments in the reply of the accused were sufficient to shift the burden of proof on the complainant to prove that the cheque had been issued for discharge of a debt or a liability. This was an entirely -9- NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017 erroneous approach. The accused had to prove in the trial by leading cogent evidence that there was no debt or liability."
12. On careful reading of the above said dictum, the Hon'ble Supreme Court reiterated that Section 139 of N.I Act mandates that, unless, the contrary is proved, it is to be presumed 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. Mere denial or rebuttable by the accused was not enough.
13. In the present case, the complainant has produced 21 documents to substantiate that accused had made transactions with him. The evidence of P.W.1 would indicate that in the cross-examination, he admitted that he was giving his evidence as a attorney holder. However, he was consistent that the accused was liable to pay the due as stated in the cheque. On the contrary, the accused has not denied the issuance of the cheque and its execution. However, he raised his defence that cheque was given as a security at the
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NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017 time of making transaction and the same has been misused by the company.
14. The accused further contended that he has not executed Ex.P5 which is relied on by P.W.1 and P.W.2. However, he has not proved that it was not signed by him. Mere denial is not sufficient to disprove the documents.
15. As per Ex.P5, there are seven invoices relating to different dates and also different amounts. Further, Ex.P7 which is considered as books of accounts relating to the transaction of the accused. As per the said document, closing balance as on 01.08.2009 was Rs.4,36,406/-.
16. On careful reading of the findings of the Trial Court, I am of the considered opinion that the approach adopted by the Trial Court in dismissing the complaint is not proper and also against the settled principle of law. Therefore, the findings of the Trial Court is liable to be set aside.
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NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017
17. In the light of the observation made above, I am of the considered opinion that the appellant has made out a case to grant relief as prayed for. Hence, I proceed to pass the following:
ORDER
i) The Criminal Appeal is allowed.
ii) The judgment and order of acquittal dated 25.11.2016 passed in C.C No.4213/2015 by the JMFC, 1st Court, Hubballi is set aside.
iii) The respondent / accused is convicted for the offence under Section 138 of N.I. Act and he is sentenced to pay a fine of Rs.7,00,000/- (Rupees Seven Lakhs only), in default of payment of fine, he shall undergo simple imprisonment for one year six months.
iv) On fine being made by the accused before the Trial Court, the Trial Court is directed to release a sum of Rs.6,95,000/- (Rupees Six Lakhs Ninety Five Thousand only) in favour
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NC: 2024:KHC-D:14874 CRL.A No. 100044 of 2017 of the complainant as compensation in terms of Section 357-A of the Code of Criminal Procedure, on proper identification and the remaining balance amount of Rs.5,000/- (Rupees Five Thousand only) shall be adjusted to the State Exchequer.
v) In case, if the respondent fails to make payment of fine as ordered by this Court, the Trial Court is directed to take appropriate steps in accordance with law to recover the same after expiry of the time stipulated to file Special Leave Petition before the Hon'ble Supreme Court.
vi) The assistance rendered by the learned Amicus Curiae is appreciated. The same is placed on record. The Legal Services Authority is directed to pay remuneration of Rs.5,000/- (Rupees Five Thousand only) to the learned Amicus Curiae for his effective assistance forthwith.
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vii) The Registry is directed to send the copy of this judgment along with the records to the Trial Court to proceed further in accordance with law.
Sd/-
(S.RACHAIAH) JUDGE UN List No.: 19 Sl No.: 4