Karnataka High Court
Sri. H. Hombaiah vs Smt. G. Susheela on 13 February, 2023
Author: P.N.Desai
Bench: P.N.Desai
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CRL.A No. 1514 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF FEBRUARY, 2023
BEFORE
THE HON'BLE MR JUSTICE P.N.DESAI
CRIMINAL APPEAL NO.1514 OF 2019
BETWEEN:
SRI. H. HOMBAIAH,
S/O.LATE VENKATARAMAIAH,
R/AT NO.231, 5TH C MAIN,
RAMCO LAYOUT,
VIJAYANAGAR 2ND STAGE,
HAMPINAGAR,
BENGALURU-560 104.
...APPELLANT
(BY SRI. N.NANJUNDA SWAMY., ADVOCATE)
Digitally signed by
NAGARATHNA M
Location: HIGH
AND:
COURT OF
KARNATAKA
SMT. G. SUSHEELA,
W/O.MARIGOWDA,
R/AT NO.263/#, 6TH C MAIN,
REMCO LAYOUT,
VIJAYANAGAR 2ND STAGE,
HAMPINAGAR,
BENGLAURU-560 104
ALSO AT:
SMT.G.SUSHEELA,
W/O.MARIGOWDA,
SUPERINTENDENT,
BIT ENGINEERING COLLEGE,
VOKKALIGARA SANGHA,
K.R.ROAD, V.V.PUROAM,
BENGLAURU-560 004.
...RESPONDENT
(BY SRI. CHALUVARAJA G.V., ADVOCATE)
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CRL.A No. 1514 of 2019
THIS CRL.A. FILED U/S.378(4) CR.P.C BY THE ADVOCATE FOR
THE APPELLANT/S PRAYING TO SET ASIDE THE JUDGEMNT DATED
15.06.2019 PASSED BY THE XXIII ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, NRUPATHUNGA ROAD, BENGALURU IN
C.C.NO.12747/2017 - ACQUITTING THE RESPONDENT/ACCUSED FOR
THE OFFENCE P/U/S.138 OF N.I.ACT.
THIS APPEAL, COMING ON FOR FURTHER DICTATION, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal arises out of the judgment passed in C.C.No.12747/2017 dated 15.06.2019 by the XXIII Additional Chief Metropolitan Magistrate, Bengaluru City, wherein the respondent/accused was acquitted for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short hereinafter referred to as N.I.Act)
2. The appellant was the complainant and the respondent was the accused before the Trial court and they will be referred as per their respective ranks held before the trial court for the sake of convenience.
3. The brief case of the complaint is that the accused approached the complainant seeking financial assistance for the purpose of marriage of daughter of the accused which was performed on 13.03.2015. The complainant being a family friend of respondent and residing in the same area, agreed to -3- CRL.A No. 1514 of 2019 lend the money. The complainant has given the amount in three instalments. Firstly, the complainant gave a sum of Rs.2,00,000/- for purchase of the gold, again a sum of Rs.2,00,000/- was given and subsequently, a sum of Rs.1,00,000/- was given before the marriage. Totally, the complainant has given a sum of Rs.5,00,000/- as hand loan to the accused and the accused promised to return the same after the marriage of her daughter. When the complainant demanded to return the money, the accused postponed the same by stating one or the other reasons. Subsequently, she issued a cheque bearing No.176814 dated 09.02.2017 drawn on Syndicate Bank, Vishweshwarapuram, Bengaluru. When the complainant presented the same through its banker, the cheque came to be dishonoured with an endorsement dated 13.02.2017 stating "insufficient funds". Therefore, the complainant gave a legal notice on 01.03.2017 through the registered post. The same was served on the accused. Despite the same, the accused has neither replied the notice nor repaid the amount. Hence, he lodged the complaint before the Magistrate.
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4. The complainant got examined himself as PW.1 and got marked eleven documents as Exs.P1 to P11 and accused got examined herself as DW.1 and got examined her son/ M. Mahesh as DW.2 and got marked five documents as Exs.D1 to D5. After hearing the arguments, learned ACMM acquitted the accused. Aggrieved by the same, this appeal is filed by the complainant.
5. Learned counsel for the appellant/complainant argued that the Trial Court has erred in acquitting the accused when the complainant has adduced both oral and documentary evidence. Learned counsel argued that the respondent has admitted that the cheque belongs to her account and also admitted her signature. The complainant issued legal notice which was served on the complainant, but no reply was given. The learned counsel argued that the accused and complainant are neighbourers. As the marriage of the daughter of the accused was scheduled in the month of March, 2015, in view of acquaintance and being the neighbourers, he advanced a total sum of Rs.5,00,000/- for marriage expenses. The learned counsel argued that the observation of the Trial Court that the complainant has no financial capacity is illegal. The defence of -5- CRL.A No. 1514 of 2019 the accused that the wife of the appellant was running the chit business and her son - Mahesh was a member for two chits of Rs.2,00,000/- each and he was paying the amount and when the son of the accused took the chits, then the wife of the complainant demanded two cheques, in the circumstances, as the son of the accused had no account, he obtained two cheques from his mother and the same have been misused by the complainant. This defence has no basis at all. But the Trial Court has wrongly appreciated the evidence and acquitted the accused. The Trial Court failed to notice that there is no document regarding any chits with the son of accused. The defence of the accused that as his son was not having any account in the bank, the son of the accused has taken two cheques from his mother and given to the complainant and the same was misused cannot be accepted at all. If at all the complainant has misused the same, the accused could have given intimation to the bank to stop payment. The Trial Court disbelieved the amount received from the sale of properties by the daughter-in-law of the complainant. On the other hand, they were all residing together in a joint family. Therefore, the said amount was kept in the house. The observation of the -6- CRL.A No. 1514 of 2019 Trial Court that the respondent is working and her son is also working and she has no need to borrow money from the complainant is contrary to the evidence on record. The Trial Court has not considered the evidence of PW.1, DW1 and DW2 and the documents produced by the appellant and wrongly acquitted the accused. The trial court ought to have drawn presumption under Sections 118 and 139 of N.I Act. Hence, the finding of the Trial Court without raising the presumption is illegal, capricious and liable to be set aside. In support of his arguments, learned counsel relied on the decision of Hon'ble Supreme Court in the case of Rangappa Vs. Mohan reported in AIR 2010 SC 1898 wherein the Apex Court discussed with regard to the presumption arising under Section 139 of N.I. Act. Learned counsel also relied on the decision of Hon'ble Supreme Court in the case of Rohitbhai Jivanlal Patel Vs. State of Gujarat and Anr. reported in AIR 2019 SC 1876. With these arguments, learned counsel prayed to allow the appeal and convict the accused.
6. Against this, learned counsel for the respondent/accused argued that the cheque is of the year 2010. The said cheque was not in force in the year 2017, as no -7- CRL.A No. 1514 of 2019 name of the account holder is printed in the cheque. The same is called as non-CTS cheque. It is further contended that the wife of the complainant was running the chit business and the son of the accused was subscriber of two chits. As he did not have any account, he has taken two cheques from his mother/accused and given to the wife of the complainant as a security and the same are misused by the complainant. In fact the wife of the complainant filed a criminal case against other persons and she is in the habit of misusing cheques and filing such cases. There are no particulars, as to when the amount was advanced by the complainant to the accused. In the year 2014 itself, the relationship between the complainant and accused was not good, as they went to the police station. The question of accused borrowing the amount from the complainant for the marriage in the year 2015 does not arise. On the other hand, the accused is also working and drawing hand sum salary. One of the son of the accused is doing real estate business. Therefore, there is no financial assistance sought by the accused from the complainant to perform the marriage. In this regard, both the accused and her son have given evidence before the Court. According to the complainant, -8- CRL.A No. 1514 of 2019 the marriage of daughter of accused was performed in the month of March, 2015, hence, why he kept quiet without there being any document till 2017 is not forthcoming. When the amount was given in instalments is also not stated. Learned counsel also argued that the sale deed produced by the complainant shows that they were in need of money. For that purpose, the property was sold and it was much prior to the alleged date of transaction and there is nothing to show that the said amount was withdrawn from the bank and given to accused. No such records or bank statements of daughter-in- law of complainant were produced or daughter-in-law of complainant is examined. Therefore, an adverse inference will have to be drawn against the complainant for not examining the daughter-in-law to show that she has given the said amount to the complainant. The very recitals in the sale deed shows that in order to meet the financial commitment, the complainant sold the property. When the complainant himself is in financial need, question of he giving the amount to the accused does not arise. The said daughter-in-law- Rajeshwari who is an important witness, is not examined. The complainant retired long back and he has no financial capacity to lend such -9- CRL.A No. 1514 of 2019 huge amount without any interest or document. The learned counsel argued that in respect of some chit transaction, as the son of the accused was subscriber of two chits, two cheques were given to the wife of the complainant by name Pushpa. The said cheques were mis-used and this case is wrongly filed. Therefore, the Trial Court has rightly appreciated the evidence on record and has given cogent reasons and held that the accused has rebutted the presumption and rightly acquitted the accused. In support of his arguments, learned counsel for respondent relied on the decision of Hon'ble Supreme Court in the case of K.Subramani Vs. K.Damodara Naidu - (2015) 1 SCC 99. With these main arguments, learned counsel prayed to dismiss the appeal.
7. I have perused the judgment of acquittal passed by the Trial Court. The Trial Court held that the complainant has failed to adduce cogent evidence to show Ex-P1 cheque is issued in discharge of the legally recoverable debt/or other liability. The accused has questioned the financial capacity of the complainant and no documents were produced to show the financial capacity. Therefore, the defence evidence probablises the case of the accused. The amount of Rs.5.00 lakhs is not
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CRL.A No. 1514 of 2019shown as legally recoverable debt or liability. Therefore, the Trial Court dismissed the complaint and acquitted the accused.
8. I have perused the Trial Court records.
9. The complainant before the Trial Court has stated that he and the accused are family friends and residing in the same area and for performance of marriage of daughter of the accused on 13.03.2015, the said amount of Rs.5.00 lakhs was borrowed, that too, in three installments and accused agreed to repay within six months. On demand, she issued the cheque. The complainant has produced said cheque which is at Ex-P1. Said cheque shows Rs.5.00 lakhs cheque was given in favour of the complainant. Ex-P1(a) is her signature. Ex-P2 is the bank endorsement issued by State Bank of India, R.P.C. Layout, Bengaluru, which shows that the said cheque was returned dishonoured with an endorsement 'funds insufficient'. Ex-P3 is the copy of legal notice issued by the complainant calling upon the accused to pay the amount borrowed by her. It is also stated that a sum of Rs.2.00 lakhs was given for purchasing gold and another sum of Rs.2.00 lakhs for booking the marriage hall and another sum of Rs.1.00 lakhs before few
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CRL.A No. 1514 of 2019days of marriage of daughter of accused. Exs-P4 to P7 are the postal receipts and Exs-P8 and P9 are the postal acknowledgments. The documents produced by the complainant prima-facie satisfy the ingredients of section 138 of N.I. Act. In support of those documents, the complainant has filed his examination-in-chief affidavit. In the cross examination, he has stated that Rs.5.00 lakhs was raised by selling a house belonging to his daughter-in-law at Raja Rajeshwari Nagar and he has paid the said amount to the accused. He has also stated that he knew one Mahesha who is the son of the accused. He has also stated that there were no other persons present when he gave the said amount of Rs.5.00 lakhs in his house. It is also suggested that the accused had agreed to repay the amount within six months. He has also stated he has not produced any documents to show that after six months he has demanded money from the accused. So this evidence indicates that issuance of cheque is admitted. He has also stated that he is residing in his own house. It is suggested that his second wife is doing chit business, he has denied it. It is also suggested that the son of the accused had taken two chits for Rs.2.00 lakhs from his
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CRL.A No. 1514 of 2019second wife-Latha. He has denied it. So for security purpose of the said chit business, the cheques was issued. He has denied it. He has also stated that the contents of the cheque is filled by the accused and given to him. It is suggested that CTS cheques were not in force in the year 2010 and the said cheque was given in the year 2017 as a security for the chit run by his wife Latha in the year 2010, now he has misused it, which he has denied it.
10. He has also admitted that he had lodged a complaint against Mahesha-son of the accused regarding purchase of a car. In this regard, Mahesh was called to the police station and the accused was also called. It is suggested that on that day, Rs.50,000/-was given to his son by the son of the accused. It is suggested that the remaining amount of Rs.65,000/- was admitted to be taken afterwards by the complainant and the cheque which was given to the son of the complainant was taken back. He has denied it is the amount which is payable to him. It is also suggested that the accused has returned the amount, but he has misused the same. He has denied it. Again it is suggested that the cheque issued in regard to chit business with his wife, he has misused, he has denied it. So this is the
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CRL.A No. 1514 of 2019cross examination. Again PW-1 was examined on 07.05.2018, wherein he has produced the certified copy of the sale deed, the original of which is at Ex-P10 and ration card-Ex-P11. He has stated himself and his daughter-in-law are residing together. It is also elicited that the said transaction took place in the year 2012. He has admitted about filing of cheque bounce cases. But he denied that his wife Pushpa is doing chit business.
11. It is evident from the cross examination, that the accused has taken contradictory stand in the cross examination. Once it is suggested that the accused has agreed to repay the amount of Rs.5.00 lakhs within six months. Again it is suggested that his wife was doing chit business with the son of the accused. Again it is suggested that there was some transaction between his son and accused son. They were called to the police station and accused had given some amount and that amount was in respect of amount due by the accused. So this type of suggestions are contradictory and inconsistent with the defence of the accused. When the accused is not due of any amount to the complainant, where is the question of accused paying money to the complainant. It is some other transaction
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CRL.A No. 1514 of 2019of car purchased by the son of the complainant with the son of the accused. Second limb of cross examination shows that the complainant's wife by name Pushpa was doing chit business. Who is that Pushpa is not forthcoming. Once it is suggested his second wife is doing chit business and accused's son has taken chit for Rs.2.00 lakhs two times and it is suggested that Rs.65,000/- was due to be given and Rs.50,000/- was given in the police station by the son of the accused to the complainant. So the defence of the complainant goes on changing in the cross examination from stage to stage.
12. So on perusing the oral evidence of the complainant and his documentary evidence, the complainant has discharged his initial burden of proving the ingredient of section 138 of N.I. Act. Apart from that, there is presumption under sections 118 and 139 of N.I. Act in favour of holder of the cheque that cheque was drawn for discharge of legally recoverable debt or liability. That presumption is a statutory presumption, but however, it is a rebuttal presumption.
13. The accused can rebut that presumption by two ways; either by cross-examining the complainant and his
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CRL.A No. 1514 of 2019witnesses, if any, and show before the Court that the evidence of the complainant is not plausible one or he can also lead his defence evidence to show that the case placed by the complainant is not tenable in the eye of law. The accused need not prove his defence beyond all reasonable doubt as in other criminal case. He can show by preponderance of probabilities that his defence is probable so that the court can disbelieve the case of the complainant. The offences under section 138 of N.I. Act are regulatory offences and they are not of purely criminal in nature. Strict proof beyond all reasonable doubt is not applicable to these cases.
14. In the light of these principles, I have considered the evidence of the accused.
15. The accused has not replied to the demand notice served on her. Statutory notice was issued by the complainant and he has kept quiet. On the other hand, the accused has given her evidence as DW-1. In her evidence, she states that the complainant is residing by the side of their house. She states that the wife of the complainant by name Pushpa was doing chit business. Her son Mahesha had taken two chits for Rs.2.00 lakhs each and he had to pay Rs.20,000/- p.m. So this
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CRL.A No. 1514 of 2019suggestion of paying Rs.20,000/- p.m. is not at all put to the complainant. Again, she says Pushpa had asked her son the cheque for repayment of Rs.2.00 lakhs. In this regard, as her son was not having bank account, she has given two signed blank cheques to her son and said cheques were given to Pushpa and when they asked for return of those cheques, at that juncture, the present case was registered against her. It is not stated whether Pushpa is his first wife or second wife or it is same Latha who is Pushpa. In her examination-in-chief, she never states that accused had no such financial capacity nor she has denied the evidence on oath given by the complainant that himself and his daughter-in-law are residing together. The daughter-in-law has received the amount by selling a house. Accused has never denied the receipt of legal notice. She never denied the issuance of cheque and signature on it. On the other hand, she says it is given for Rs.4.00 lakhs chit borrowed by her son. Her cross examination shows that she is a B.A. Graduate and she is working as a Superintendent at Bengaluru Institute of Technology, K.R. Road, V.V. Puram, Bengaluru. So it is not that she is an illiterate lady or a layman who does not know about the cheques or effect of signing the cheques. It is
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CRL.A No. 1514 of 2019also evident that she joined for work in the year 1999 and she is staying at Vijaynagar, Bengaluru since 24 years. She being a Superintendent in an office definitely, she would know the effect of issuance of cheque. She has also admitted that the complainant was residing by the side of their house. She has also admitted that her last daughter's marriage was held on 12.03.2015 and 13.03.2015. So the defence of the case of the complainant that there was marriage in the house of the accused in March 2015 and the amount was borrowed in instalments to purchase the gold and to make payment to the marriage hall rent and other expenses appears correct. She states that she was getting a salary of Rs.38,000/- in the year 2015. She has also admitted that her daughter's marriage was performed at R.P. Ashraya Kalyan Mantap, Dasarahalli. This shows that the amount was spent for the marriage. She has also admitted that her son was doing real estate business. She has also stated that in the year 2014, her son was called to the police station in respect of some other complaint. She gives a new version stating that in the year 2010, her son had given a cheque to the complainant's wife and as it was dishonoured, he was called to the police station. This is a new version. On the
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CRL.A No. 1514 of 2019other hand, it is suggested to the complainant that it was in respect of purchase of a car transaction, the amount of Rs.50,000/- was given. So her cross examination shows she does not know anything in respect of her son. She does not know what was the cheque number given by her son, if any. She gives a new version stating that her son had borrowed the money and he has taken two cheques for giving it to the complainant and to another person and she informed the police in the police station to return the said cheque. Then she gave intimation to the bank not to make any payment. But she admits that the cheque was dishonoured because of insufficient funds in the account of holder of the cheque. So her contention that she has given intimation to the bank to stop payment is only an afterthought and she admits that to give the amount to the complainant's wife, her son had taken the cheques from her and also to give some other amount. So she knew very well that the cheque is given to the complainant for the amount due to the complainant. So her cross examination clearly shows that somehow she has taken some defence only for the sake of defence. She admits receipt of legal notice and she has given it to her son to look into it. So her cross
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CRL.A No. 1514 of 2019examination does not make her defence probable as there being no basis for such defence at all.
16. The accused got examined her son Mahesh M. as DW-2. He gives a new version stating that when he demanded the wife of the complainant who was running chit business to give two chits together for Rs.2.00 lakhs, she asked him to take it after one year. So after one year for two chits, he has taken Rs.1,80,000/- and as security, two cheques were given and as he was not having the bank account, he took two signed blank cheques from his mother and gave it to the complainant's wife Pushpalatha. Therefore, his evidence does not show whether it is for Rs.4.00 lakh chit or for only two chits. Ofcourse, learned counsel for the respondent states that Pushpalatha and Latha are one and the same and her name is Pushpalatha. He states said chit was closed by receiving Rs.1,80,000/- . Again the wife of the complainant asked him to join the chit and as he refused, she has not returned the cheques and misusing the same, legal notice is issued through the complainant. This is again a totally new defence set up by PW-2. There is no suggestion that the earlier chit was closed and a new chit by her son was refused. Cheques were not
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CRL.A No. 1514 of 2019returned. In the cross examination, he has admitted he has taken training in ITI. He is having a real estate business. So it is very difficult to believe that he does not have any bank account. His father expired about 21 years back. He has got three sisters and his mother is getting Rs.25,000/- to Rs.30,000/- salary and his father's pension of Rs.5,000/-. He has admitted that they have performed the marriage of three sisters and gave them to a well to do family. He has admitted he has not lodged any complaint though the cheques were not returned or were misused. He has admitted about police calling him to the police station in the year 2013 and 2014. So the evidence of PW-2 shows that he had some other transaction with the complainant or his son and he was called to the police station in the year 2013 and 2014. He has also admitted that the complainant is residing by the side of their house and the marriage of his last sister was performed in the Kalyan Mantapa in March 2015. Admittedly, his mother is having salary of Rs.25,000 to Rs.30,000/-. So marriage of three daughters were performed. She was also getting meager family pension of Rs.5,000/- of her husband. So it is evident that the complainant has helped the accused who was a
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CRL.A No. 1514 of 2019neighbourer at the time of marriage of her last daughter. In view of inconsistent defence taken by the accused from stage to stage, the accused being a Superintendent in an Engineering College, will not keep quiet by issuing blank signed cheques, if they are misused.
17. On the other hand, the cross examination and the defence evidence of the accused shows that she was due of amount to the complainant and in discharge of that amount, the cheque was issued. On the other hand, there is no basis for the defence taken by the accused. Neither his evidence about financial capacity is denied nor any such defence was taken by issuing legal notice by the complainant. On the other hand, the complainant has proved the initial burden casted upon him. The accused has failed to rebut the presumption arising in favour of her.
18. The Hon'ble Supreme Court in the case of Rohitbhai Jivanlal Patel v. State of Gujarat and Another, reported in AIR 2019 SC 1876, at paras 6, 7, 21 and 24 in detail discussed regarding the presumption to be drawn relying on the earlier decision in the case of Rangappa v. Sri Mohan
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CRL.A No. 1514 of 2019reported in (2010) 11 SCC 441, and the same reads as under:-
6. After examining the record, the Trial Court found that the accused had admitted his signature on the cheques and, with reference to the decision of this Court in the case of Rangappa v. Sri Mohan : (2010) 11 SCC 441, drew the presumption envisaged by Section 139 of NI Act.
6.1. However, after having drawn the presumption, the Trial Court found several factors in favour of the accused and observed, inter alia, that: (a) there was no documentary evidence to show the source of income for advancing the loan to the accused; (b) the complainant failed to record the transaction in the form of receipts, promissory notes or even kaccha notes; (c) vague and uncertain statement was made by the complainant as compared to the statement of his witness-Shri Jagdishbhai; (d) the complainant had no knowledge about the dates and other particulars of such cheques; (e) the witness of complainant was in know of the facts more than the complainant; (f) the complaint allegedly extended the loan to the tune of Rs.22,50,000/-
but the 7 cheques in these cases were of Rs.3,00,000/- each and there was no explanation from the complainant as regards the remaining Rs.1,50,000/-; and (g) the suggestion about washing away of the earlier cheques in rains was also doubtful when the complainant's office was on the 8th floor of Windor Plaza.
6.2 With reference to the aforesaid factors and circumstances, the Trial Court concluded that the accused was successful in bringing rebuttal
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CRL.A No. 1514 of 2019evidence to the requisite level of preponderance of probabilities; and observed that the complainant had failed to prove, beyond all reasonable doubt, that the cheques were issued in part payment of the loan amount of Rs.22,50,000/-. Hence, all the 7 complaint cases were dismissed by similar but separate judgment and orders dated 09.06.2017 while observing as under3:-
3. Again, the extraction is from the judgment of the Trial Court in Criminal Case No.46499 of 2008.
"19......All these circumstances creates doubt of the complainant (sic) as alleged and accused has brought on record rebuttable evidence upto to requisite level ie. Preponderance of probabilities and as such considering section 5, 6, 32 and 118 and 139 of N.I. Act complainant failed to prove complaint beyond reasonable doubt that the cheque has been issued for the recoverable debt/liability.
*** *** *** ***
22. Therefore as discussion made herein above the complainant failed to prove that the disputed cheque has been issued by the accused for the part payment of transaction of Rs. 22,50,000/- therefore accused is entitled to get acquittal who has brought on record the circumstances which rebut the presumption under section 118, 119, of N.I. Act... (sic)"
7. Against the aforementioned judgment and orders of acquittal, the complainant preferred appeals before the High Court of Gujarat, which have been considered and decided together by the impugned common judgment and order dated 08.01.2018. The High Court observed that the presumption under Sections 118 and 139 of the NI Act was required to be drawn that
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CRL.A No. 1514 of 2019the cheques were issued for consideration and until contrary was proved, such presumption would hold good; that the complainant had proved legally enforceable debt in the oral as also documentary evidence, including the written acknowledgment by the accused on stamp paper; and that except bare denial, nothing was brought on record by the accused to dislodge the proof adduced by the complainant.
21. The result of discussion in the foregoing paragraphs is that the major considerations on which the Trial Court chose to proceed clearly show its fundamental error of approach where, even after drawing the presumption, it had proceeded as if the complainant was to prove his case beyond reasonable doubt. Such being the fundamental flaw on the part of the Trial Court, the High Court cannot be said to have acted illegally or having exceeded its jurisdiction in reversing the judgment of acquittal. As noticed hereinabove, in the present matter, the High Court has conscientiously and carefully taken into consideration the views of the Trial Court and after examining the evidence on record as a whole, found that the findings of the Trial Court are vitiated by perversity. Hence, interference by the High Court was inevitable; rather had to be made for just and proper decision of the matter.
24. Therefore, this appeal is partly allowed in the following terms: The common judgment and order dated 08.01.2018 in R/Criminal Appeal No. 1187/2017 connected with R/Criminal Appeal Nos. 1191/2017 to 1196/2017 by the High Court of Gujarat at Ahmedabad is maintained as regards conviction of the accused-appellant for the offence under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of 7 cheques in the sum of Rs. 3
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CRL.A No. 1514 of 2019lakhs each, as drawn by him in favour of the complainant-respondent No. 2; however, the sentence is modified in the manner that in each of these 7 cases, the accused-appellant shall pay fine to the extent of double the amount of each cheque (i.e., a sum of Rs. 6 lakhs in each case) within 2 months from today with the stipulation that in case of default in payment of fine, the accused-appellant shall undergo simple imprisonment for a period of one year. On recovery of the amount of fine, the complainant-respondent No. 2 shall be compensated to the tune of Rs. 5.5 lakhs in each case. In the event of imprisonment for default in payment of fine, the sentences in all the 7 cases shall run concurrently.
19. The Hon'ble Supreme Court has also referred to the decision of M/s. Kumar Exports vs. M/S Sharma Carpets reported in AIR 2009 SC 1518 and has dealt with the rebuttal of the presumption of the accused and how the Court has to make a presumption under section 114 of the Evidence Act in respect of presumption arising under sections 118 and 139 of N.I. Act.
20. Further, the learned counsel for the appellant also relied on the decision of the Hon'ble Supreme Court in the case of Rangappa v. Mohan reported in AIR 2010 SC 1898, wherein the Hon'ble Supreme Court has referred to its earlier decision. Said decision is already referred by the Hon'ble
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CRL.A No. 1514 of 2019Supreme Court in the above referred Rohitbhai's case and at paragraph Nos.14 and 15, it is held as under:
"14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to
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discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
15. Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the `stop payment' instructions to his bank. Furthermore, the instructions to `stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability. The fact that the accused had made regular payments to the complainant in
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relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction-related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction- expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant."
21. Learned counsel for the respondent has also relied on the decision of the Hon'ble Supreme Court in the case of K. Subramani v. K. Damodara Naidu reported in (2015) 1 SCC 99, wherein the Hon'ble Supreme Court has further referred to the decision of Rangappa v. Sri. Mohan reported in (2010) 11 SCC 441 and considered the evidence on record and held that the complainant could not prove the source of income from which the alleged loan was paid to the appellant, presumption stood rebutted and relied on paras 9, 10 and 11 as under:-
9. "In the present case the complainant and the accused were working as Lecturers in a Government college at the relevant time and the alleged loan of
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Rs.14 lakhs is claimed to have been paid by cash and it is disputed. Both of them were governed by the Government Servants' Conduct Rules which prescribes the mode of lending and borrowing. There is nothing on record to show that the prescribed mode was followed. The source claimed by the complainant is savings from his salary and an amount of Rs.5 lakhs derived by him from sale of site No.45 belonging to him. Neither in the complaint nor in the chief-examination of the complainant, there is any averment with regard to the sale price of site No.45. The concerned sale deed was also not produced. Though the complainant was an income- tax assessee he had admitted in his evidence that he had not shown the sale of site No.45 in his income- tax return. On the contrary the complainant has admitted in his evidence that in the year 1997 he had obtained a loan of Rs.1,49,205/- from L.I.C. It is pertinent to note that the alleged loan of Rs.14 lakhs is claimed to have been disbursed in the year 1997 to the accused. Further the complainant did not produce bank statement to substantiate his claim. The trial court took into account the testimony of the wife of the complaint in another criminal case arising under Section 138 of the N.I. Act in which she has stated that the present appellant/accused had not taken any loan from her husband. On a consideration of entire oral and documentary evidence the trial court came to the conclusion that the complainant had no source of income to lend a sum of Rs.14 lakhs to the accused and he failed to prove that there is legally recoverable debt payable by the accused to him.
10. In our view the said conclusion of the trial court has been arrived at on proper appreciation of material evidence on record. The impugned judgment of remand made by the High Court in this case is unsustainable and liable to be set aside.
11. In the result this appeal is allowed and the impugned judgment insofar as the appellant is
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CRL.A No. 1514 of 2019concerned is set aside and the judgment of acquittal passed by the trial court is restored."
22. Ofcourse, that decision is a settled position. But here in the case on hand, no such stand was taken by issuing any such reply to the legal notice. In the cross examination of the evidence of the complainant, it is stated that he was residing alongwith daughter-in-law and his daughter-in-law's property was sold and that sale deed was also produced, he has also stated that his daughter-in-law had given the amount and he has kept it with him. This evidence is not at all denied. On the other hand, in K. Subramani case referred supra, sale deed was not produced and in that case, the complainant admitted that he had borrowed the loan of Rs.14.00 lakhs from LIC in the year 1997 and there is also evidence of wife of the complainant in other criminal case.
23. In this regard, the Hon'ble Supreme Court in a decision in the case of Bir Singh Vs. Mukesh Kumar reported in 2019(4) SCC 197 has considered the object of Section 138 of the N.I. Act. Because in the world of business, the cheque, as a negotiable instrument, was losing its credibility because of lack of responsibility on the part of the drawer.
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24. So on entire consideration of the facts of that case and the decisions so rendered, here the facts of the case are totally different. On the other hand, the defence taken by the accused itself is inconsistent and contrary and differs from stage to stage. The cross examination and version of the defence is again inconsistent. Therefore, the trial court has misdirected itself and without referring to the settled principles regarding appreciation of evidence cases under the N.I Act has held that the accused has probabalised his defence and the burden stood rebutted. This is a perverse finding of the trial court which is not based on the evidence.
25. It is settled principles of law that this Court being an appellate court while considering the judgment of acquittal will not interfere unless the judgment is illegal, erroneous and has resulted in miscarriage of justice. In the light of these principles, if the impugned judgment is perused, it is evident that the judgment is perverse and is not based on evidence on record. Therefore, the said judgment needs to be set-aside.
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CRL.A No. 1514 of 2019Accordingly, I pass the following:
ORDER
1. The appeal is allowed.
2. The judgment of acquittal dated 15.06.2019 passed by learned XIII Addl. Chief Metropolitan Magistrate, Bengaluru in C.C.No.12747/2017 is hereby set-
aside.
3. The Respondent/accused is convicted for the offence punishable under section 138 of N.I. Act.
4. The respondent is sentenced to pay a fine of Rs.5,10,000/-. Out of the said fine amount, Rs.5.00 lakhs shall be paid to the appellant/complainant as compensation. Remaining Rs.10,000/- shall vest with the State.
5. In default of payment of fine, the accused shall undergo simple imprisonment for a period of one year.
6. Bail bond, if any, executed by the accused, the same shall stand cancelled.
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7. Office is directed to send back the records to the trial court.
8. No order as to costs.
Sd/-
JUDGE HJ/MN List No.: 1 Sl No.: 33