Karnataka High Court
D Achutha Kamath vs Rajeshwari P M on 26 July, 2024
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NC: 2024:KHC:29531
CRL.A No. 62 of 2012
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF JULY, 2024
BEFORE
THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR
CRIMINAL APPEAL NO. 62 OF 2012
BETWEEN:
D. ACHUTHA KAMATH
S/O D. YASHWANTH KAMATH
AGED 55 YEARS
PROPRIETOR
M/S M.G.M. TRADERS
APMC YARD, SHIVAMOGA.
...APPELLANT
(BY SRI. P.N. HARISH, ADVOCATE)
AND:
RAJESHWARI P.M
W/O MARULARADHYA
MAJOR
PROP:T.S. SWAMY
ARECANUT COMPANY
Digitally signed R/O 1ST CROSS, RAVINDRANAGAR
by SHAKAMBARI SHIVAMOGA.
Location: HIGH
COURT OF
KARNATAKA ...RESPONDENT
(BY SRI P.B. UMESH ADVOCATE FOR
SRI R.B. DESHPANDE, ADVOCATE)
THIS CRL.A IS FILED U/S.378(4) OF CR.P.C, PRAYING TO
SET ASIDE THE IMPUGNED JUDGMENT OF ACQUITTAL OF
RESPONDENT DATED 15.11.2011 PASSED IN
C.C.NO.1392/2009 BY THE III - ADDL. CIVIL JUDGE AND JMFC,
SHIVAMOGGA - ACQUITTING THE RESPONDENT/ACCUSED FOR
THE OFFENCE P/U/S. 138 OF N.I.ACT.
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NC: 2024:KHC:29531
CRL.A No. 62 of 2012
THIS CRIMINAL APPEAL HAVING BEEN RESERVED FOR
JUDGMENT COMING ON FOR PRONOUNCEMENT OF THIS DAY,
RAMACHANDRA D. HUDDAR J., DELIVERED/PRONOUNCED
THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR
CAV JUDGMENT
(PER: HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR) Appellant/Complainant being aggrieved and dissatisfied of acquittal of Respondent/Accused in Criminal Case No. 1392/2009 dated 15.11.2011 by the III Addl. Civil Judge And J.M.F.C., Shivamogga, has preferred this appeal.
2. The parties to this appeal are referred to as per their rank before the trial Court.
Case of the Complainant before the trial Court:
3. The complainant has been running Arecanut business under the name and style of M/S.M.G.M. Traders at A.P.M.C.Yard, Shivamogga. The accused was also running Arecanut Mandi at A.P.M.C.Yard, Shivamogga. The accused has purchased Arecanut of Rs.4,00,000/- from the -3- NC: 2024:KHC:29531 CRL.A No. 62 of 2012 complainant. To repay the said amount, accused issued a cheque bearing No.128706 dated 30.09.2003 drawn on State Bank of Mysore, A.P.M.C. Yard, Shivamogga. Complainant stated that, along with cheque of Rs.4,00,000/-, another cheque was also endorsed to the complainant for Rs.5,00,000/- in order to return the advanced money paid by the complainant towards supply of Arecanut. That means the accused has issued two cheques in favour of the complainant. But when the cheque was presented for encashment, it was dishonoured with endorsement as the accused has reported that the "Cheque is lost".
4. A legal notice was issued to the accused on 22.10.2003 calling upon the accused to pay a sum of Rs.4,00,000/-. The notice was sent to both residential and Mandi address. But there was no response from the accused. The complainant also contended that, in the stock book, he has noted that the accused had purchased the Arecanut worth of Rs.4,00,000/- from M.G.S Traders. -4-
NC: 2024:KHC:29531 CRL.A No. 62 of 2012 He has maintained the account in the name of accused and it is running account.
5. Therefore, complainant filed a complaint under Section 200 of Cr.PC against accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred as 'the NI Act'). Cognizance of the trial Court:
6. The jurisdictional Magistrate took cognizance of the offence, recorded the sworn statement. Based upon that, summons came to be issued to the accused and she appeared before the trial Court and was enlarged on bail. Accused pleaded not guilty for the offence alleged and claimed to be tried.
7. To prove the case of the complainant, he himself entered into the witness box as PW.1 and the bank manager is examined as PW.2 and got marked Ex.P1 to P10, and closed his evidence.
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012
8. After recording the statement of the accused under Section 313 of Cr.PC, accused was examined herself as DW.1 and closed her evidence.
Case of the Accused before the trial Court:
9. The accused was a proprietor of T.S.Swamy Arecanut Company in Shimoga City. The accused admits to have received the legal notice served by the complainant but she contended that, her 100 cheque leaves book was lost in the Mandi and she has not given any cheque to M.G.S. Traders but, the cheque was drawn from her account and Ex.P1(a) is her signature and this cheque was not issued by her. She was not acquainted with the complainant and she never met the complainant. She also contended that, at no point of time, she purchased Arecanut worth Rs.4,00,000/- from the complainant. Though the complainant has contended that the accused has issued two cheques, but he fails to explain for what purpose the accused has issued two -6- NC: 2024:KHC:29531 CRL.A No. 62 of 2012 cheques on 30.09.2003. Therefore, she is not liable to pay the amount of Rs.4,00,000/-.
Findings of trial Court:
10. The learned trial Court, on hearing the arguments and on assessment of the evidence placed on record by the complainant and accused, held that, according to Section 139 of the NI Act, if a cheque is made out to the complaint, it will be assumed that the cheque was made out to the holder in order to discharge liabilities. The concept mentioned earlier was applied in this instance. But the accused has raised probable defence and rebutted the presumption drawn in favour of the complainant that she has not purchased Arecanut worth Rs.4,00,000/- from the complainant. In fact, the complainant was unable to present evidence that the accused had bought Arecanuts from his mandi for an amount of Rs. 4,00,000/-. Accused has demonstrated that she has lost the cheque book. Furthermore, the complainant has not demonstrated that, he has sent out a -7- NC: 2024:KHC:29531 CRL.A No. 62 of 2012 demand notice on the Ex.P1 cheque. After taking into account all of these factors, the trial Court concluded that, the complainant had not provided sufficient evidence to establish that, the accused had committed the offence covered by Section 138 of the NI Act and acquitted her from the charges brought against her.
11. This is how now the appellant/complainant is before this Court challenging the impugned judgment. Proceedings before this Court:
i) Submissions on behalf of the Appellant:
12. The learned counsel for the appellant submits that, the respondent having issued a cheque towards purchase of areca from the complainant worth Rs.4,00,000/- with an assurance that, on presentation of the said cheque, it will be encashed. As the respondent was the regular customer, believing the words of the respondent, he presented the said cheque for encashment -8- NC: 2024:KHC:29531 CRL.A No. 62 of 2012 through his Banker. But, it was returned with an endorsement by his banker stating that, `Cheque is lost'.
13. Therefore, he issued the statutory notice within the stipulated time. Though the said notice was received by the accused-respondent but, has not complied with the contents of the notice. In view of purchase of arecanut, the accused has issued the said cheque. He submits that, even the husband of the accused used to have similar transactions with him.
14. According to him, just to deprive the rights of the complainant of his legitimate claim with regard to purchase of arecanut from him, the accused has taken a false defence of losing of her cheque book. It his further submission that, though the contention is of losing of cheque book but she has not filed any police complaint or has taken any steps regarding the same. Therefore, it was a cooked up story by the accused so as to defeat the rights of the complainant. In support of his submission, he relied upon evidence placed on record both oral and -9- NC: 2024:KHC:29531 CRL.A No. 62 of 2012 documentary and prays to allow the appeal and set aside the impugned judgment.
15. In support of his submission, he also relied upon the provisions of Sections 118 and 139 of NI Act which speaks of presumption in his favour with regard to the issuance of the cheque by the accused.
ii) Submissions on behalf of the Respondent:
16. Refuting the submissions of the counsel for the appellants, the learned counsel for the respondent supported the reasons assigned by the trial Court. He contends that, though the presumption is very much available with regard to the cheques where the signature is admitted as per the aforesaid provisions of NI Act, but, the said presumptions are rebuttable presumptions. The accused has led the evidence rebutting the said presumption. When the said presumption is rebutted, the question of still availability of the presumption in favour of the complainant does not arise at all.
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012
17. According to him, the defence of the accused was that, there was no privity of contract of purchase of Arecanut from the complainant by the accused at any point of time. The accused is not having any acquaintance of the complainant and the said complainant is a stranger to her. Therefore, the question of she purchasing the Arecanut from the complainant's Arecanut shop does not arise at all. As the accused lost the cheque book from her office and some of the cheque leaves were signed by her so as to help her husband to do the business, because of losing of the cheque book and tracing of a cheque leaf by the complainant, just to have an unlawful advantage, the said cheque was presented by the complainant.
18. It is his submission that, on coming to know of this fact, she submitted a petition to her banker informing about the losing of the cheque book belonging to her. Accordingly, the bank acted upon the said petition and when the said cheque was presented by the complainant, rightly the banker has issued an endorsement. To that
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 effect accused has lead evidence. To disprove the defence of the accused, no effective cross-examination is directed by the complainant. Hence, according to him, the learned trial Court has considered all the factual and legal aspects and rightly dismissed the complaint and acquitted the accused. He supported the reasons assigned by the trial Court.
19. In the light of the submissions of both the side and on perusal of the materials placed on record, the point that would arise for consideration is:
"Whether the trial Court has committed legal and factual error in acquitting the accused by observing that, the accused has rebutted the presumption available under the NI Act?"
20. As per the allegations made in the complaint, accused purchased the areca worth Rs.4,00,000/- from the complainant and issued a cheque bearing No.128706 drawn on State Bank of Mysore, APMC Yard Branch, Shivamogga dated 30.09.2003. The said cheque was presented for encashment through the banker of the
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 complainant i.e. Shivamogga Arecanut Mandi Merchants Co-operative Bank Ltd., APMC Yard, Shivamogga. But, the said cheque was dishonoured as per the memo dated 6.10.2003 by reporting that, `cheque is lost` as per the instructions of the accused. Thereafter, he issued a statutory notice on 22.10.2003 and called upon the accused to pay the cheque amount both under certificate of posting and RPAD which were duly served on the accused. But, accused did not pay the cheque amount. Therefore, within the stipulated time, the complainant filed the private complaint on 25.11.2003. Thus, with regard to the mandatory provisions of filing a complaint alleging the offence under Section 138 of the NI Act are complied by the complainant.
21. When an offence under Section 138 of NI Act is attributed against the accused, the heavy burden lies on the complainant to prove the ingredients of the offence as mandated under the provisions of NI Act. No doubt, the presumption is very much available under Section 118 and
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 139 of the NI Act, but, it is a rebuttable presumption. Sections 118 and 139 of the NI Act read as under:
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;
(b) as to date:--that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance:--that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer:--that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements:--that the endorsements appearing upon a negotiable instrument were made in the order in which they appear then on;
(f) as to stamp:-- that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course:--that the holder of a negotiable instrument is a holder in due course: provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
139. 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 in section138 for the discharge, in whole or in part, of any debt or other liability.
22. The complainant by filing his affidavit by way of examination-in-chief has reiterated the contents of the complaint in his evidence. He relied upon Ex.P1 to P7. Ex.P1 is the so called cheque alleged to have been issued by the accused containing her signature. So far as signature on Ex.P1 is concerned, accused admits. When the said cheque was presented for encashment, the banker of the complainant issued an endorsement stating that `Cheque book reported to be lost'. The said memo is produced at Ex.P2. Thereafter, the complainant has issued legal notice and the copies of the same are produced which are exhibited as per Ex.P4 and P7.
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012
23. This PW.1 is cross-examined by the accused wherein it is stated by him that, with regard to sales of arecanut from his shop, he has maintained day book, ledger and bank pass book. He has maintained register to that effect. He further states that, with regard to the sale of arecanut to the accused, he has made an entry in his stock register and other records. According to him, he has produced the same.
24. On perusal of the documents produced and got marked by the complainant, no such registers like, day book, stock book and bank passbook are produced to show that, complainant has sold Arecanut to the accused. It is his evidence that he has paid Rs.4,00,000/- in cash which was in his hand. He has not withdrawn any amount from the banker. According to him, except Ex.P1, no cheque was given to the accused.
25. He admits that there were previous transactions but, to prove the same, except self say of PW.1, no
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 evidence is placed on record by the complainant. He admits that, he is also having a running account and he accepts the cheque by way of a security. But, he denies that he has accepted the said cheque because of the security.
26. PW.2 Varadaraj Kamath the then Manager of State Bank of Mysore, is examined by the complainant to prove that, he has issued Ex.P2 stating that the drawer of the cheque has lost the same. He has been cross- examined by the defence. It is elicited in the cross- examination that, Ex.P8 is given by the accused being the photocopy of the affidavit stating that the accused has lost a cheque book containing 100 leaves. According to him, when the cheque was presented for encashment, accused was not possessing four lakhs in her account and to that effect he has produced Ex.P9.
27. From the evidence of PW.2, it is very much clear that, even much prior to the presentation of the cheque, the accused has informed her banker that she has
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 lost the cheque book with instruction not to honour any of the cheques. So the defence of the accused is corroborated by the evidence of PW.2 examined by the complainant.
28. Accused also entered the witness box and have specifically stated that, her husband had two transaction with the complainant as told by her husband. She does not know who has given the cheque to the complainant. According to her, her cheque book containing 100 leaves was lost by her in her office and she informed the banker regarding the same. Further, she states that she has not issued cheque Ex.P1 to the complainant.
29. The complainant has cross-examined the accused wherein it is elicited that, it is accused who is the owner of her business. Complainant is also doing his arecanut business at APMC Yard Shivamogga. She does not know that the complainant is running his business under the name and style of MGM Traders. She is specific
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 with regard to losing of cheque book. She informed the banker but, has not filed any police complaint. She admits that Ex.P(1)(a) is her signature. Though lengthy cross- examination is directed to her, but, throughout her cross- examination, she is consistent about losing of the cheque and informing the Bank.
30. When it is the specific case of the complainant that, in view of purchase of Arecanut worth Rs.4,00,000/- by the accused, he has issued the said cheque. When the cheque amount is Rs.4,00,000/- and Arecanut worth Rs.4,00,000/- sold by him by his MGM Traders, as spoken to by him, there must have been some entries in the books of account maintained in his business. But, he has not produced even a scrap of paper to that effect to buttress his plea of maintaining the said account with regard to the entries of transactions. The said entries in the books of account or the receipt for having sold the arecanut worth Rs.4,00,000/-, at least an office copy could have been the best evidence to prove the transaction of
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 sale of Arecanut by the complainant to the accused. In the absence of such suitable and apt evidence, it can never be stated that, the complainant is able to prove the transaction between himself and accused with regard to sale of Arecanut by him.
31. As per the observations of the learned trial Court, the complainant has utterly failed to prove the legal transaction in between himself and accused as no documents are produced. It is observed by the trial Court by relying upon the judgment of Hon'ble Apex Court in Rangappa vs. Sri Mohan (AIR 2010 SC 1898) that the presumption which is available has to be proved as it is mandatory. It is not a general presumption. Even it is held that, the presumption mandated by Section 139 of the Act does not indeed include the existence of the legally enforceable debt or liability. It is observed in catena of judgments that, presumption which is stated under Section 139 of NI Act which are rebuttable presumption and keeping this in view, it is a settled position that, when
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 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.
32. If this analogy is applied to the present facts of case, as no documentary evidence is produced to prove about the sale of Arecanut by the complainant to the accused, it is hard to believe the say of the complainant that, he really has sold Arecanut to the accused. Merely because accused admits her signature on the said cheque, that would not help the complainant to draw the presumption. Therefore, the very transaction as set up by the complainant is not proved in accordance with law. There was no privity of contract of sale of Arecanut by the complainant with the accused and in the absence of such an acceptable evidence, it can very well be stated that, the
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 accused has rebutted the presumption available under Section 139 of NI Act.
33. Learned trial Court, after assessing the oral and documentary evidence and by applying the principles laid down by the Hon'ble Apex Court in its judgment as stated supra and by assigning cogent and acceptable reasons, has found that, the complainant has failed to prove his case with legal evidence. I do not find factual or legal error committed by the trial Court in acquitting the accused. So, therefore, there is no merit in this appeal and it is liable to be dismissed by confirming the judgment of acquittal by the trial Court which is impugned in this appeal. Accordingly, the point raised supra is answered against the complainant-appellant.
Resultantly, I pass the following:
ORDER
(i) Appeal is dismissed. The impugned judgment of acquittal passed by III Addl.Civil Judge, Shivamogga dated
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NC: 2024:KHC:29531 CRL.A No. 62 of 2012 15.11.2011 in CC No.1392/2009, is hereby confirmed.
(ii) Bail bonds if any, executed by the accused stand cancelled.
(iii) Send back the trial Court records along with copy of this judgment forthwith.
Sd/-
(RAMACHANDRA D. HUDDAR) JUDGE SK List No.: 1 Sl No.: 1