Karnataka High Court
K Prakashrao S/O K Chayappa, vs K Nageshwarrao S/O Rangarao, on 8 December, 2020
Author: Ravi V.Hosmani
Bench: Ravi V.Hosmani
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 8 TH DAY OF DECEMBER 2020
BEFORE
THE HON'BLE MR.JUSTICE RAVI V.HOSMANI
CRIMINAL APPEAL No.100221/2014
BETWEEN:
K.PRAKASHRAO S/O K.CHAYAPPA,
AGE ABOUT: 65 Y EARS,
R/O BADARINARA YANA TEMPLE,
OPP: TA ILOR ANASUYAMMA,
WARD NO.18, GANDHI NAGAR,
BELLARY .
... APPELLANT
(BY SRI GIRISH S .HIREMATH , ADVO CATE)
AND
K.NAGESHWARRA O S/O RANGARAO,
HINDU, AGE: 57 Y EARS, OCC: CLERK IN
R.S .S.S .N. MOKA VILLAGE, TQ : BELLARY,
R/O: L.I.G.461, KH B COLONY,
GANDHI NAGAR, BELLARY .
... RESPONDENT
(BY SRI M.AMAREGOUDA, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER S ECTIO N
378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT
OF ACQUITTAL DATED 04.09.2014 PASSED IN
C.C.NO.1009/2007 BY THE PRINCIPAL CIVIL JUDGE AND
J.M.F .C. COURT, BELLARY AND ACCORDINGLY CONVICT
THE RESPONDENT FOR OFFENCE PUNISHABLE UNDER
SECTION 138 OF N.I.ACT.
2
THIS APPEAL BEING RESERVED F OR JUDGMENT O N
04.12.2020, TH IS DAY, THE COURT, DELIVERED THE
FOLLOWING:
JUDGMENT
This appeal is filed against the judgment dated 04.09.2014 passed by the Principal Civil Judge and JMFC, Ballari in C.C.No.1009/2007, acquitting the accused for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'N.I.Act' for short)
2. Brief facts giving rise to this appeal are that a private complaint under Section 200 of the Code of Criminal Procedure, 1973 (herein after referred to as 'Cr.P.C.' for short), came to be filed on 24.07.2007, stating that complainant and accused were relatives. As such on 01.05.2007, accused borrowed sum of Rs.2,00,000/- as hand loan promising to repay within one month, by issuing a post dated cheque of 01.06.2007, bearing No.0545620 for rupees two lakhs, drawn on Ballari 3 District Co-operative Central Bank, K.C. Road Branch, Ballari. When it was presented on 06.06.2007, it returned unpaid on the same day with endorsement "funds insufficient". Thereafter complainant issued statutory notice to accused on 14.06.2007, by RPAD. It was received by accused on 15.06.2007. But accused did not repay amount or replied to notice, constraining complainant to file complaint.
3. After recording sworn statement of complainant and taking cognizance, summons was issued to accused. On appearance, accused denied charges and sought trial. In support of his case, complainant got himself examined as PW1 and got marked Exhibits P1 to P4. Thereafter the incriminating material was explained to accused under Section 313 of Cr.P.C. He denied the same and 4 did not lead any defence evidence. Thereafter trial Court framed following points for its consideration.
1. Whether the complainant proves beyond all reasonable doubt that the accused has issued cheque in favour of the complainant to discharge his debt or liability for Rs.2,00,000/- bearing cheque No.054620 dated 01.06.2007 drawn on Bellary District Co-operative Central Bank Ltd., K.C.Road Branch, Bellary, in favour of complainant?
2. Whether the complainant proves beyond all reasonable doubt that the complainant presented the said cheque for encashment through his banker within the stipulated time and the said cheque was dishonoured due to insufficient funds in the account of accused?
3. Whether the complainant has proved beyond all reasonable doubt that the accused has committed the offence punishable under Section 138 of Negotiable Instruments Act?
4. What order?
4. After answering issue No.1 and 3 in the negative and issue no.2 in affirmative, trial Court proceeded to pass impugned judgment acquitting the accused. Challenging acquittal, complainant is in appeal.
5
5. Learned counsel Sri Girish S.Hiremath for complainant submitted that complainant had made clear averments about all ingredients constituting offence under Section 138 of N.I. Act and also produced supporting documents namely cheque as Ex.P1, bank endorsement as Ex.P2, statutory notice as Ex.P3, postal receipt as Ex.P3(a) and postal cover as Ex.P4. Despite the above and even in absence of any contrary evidence being led by accused, trial Court acquitted accused. It was submitted that the reasons assigned by trial Court for acquittal are contrary to evidence on record. Even conclusions drawn are perverse. The trial Court firstly held that complainant has failed to prove passing of consideration amount to accused for issuing cheque. The trial court observed that no man of ordinary prudence would lend huge amount of rupees two lakhs without obtaining any document for security of said amount. Trial Court further doubted financial 6 capacity of complainant and his source of income to lend such loan. It further held that there is no explanation by complainant why such huge amount was not paid either through D.D. or by cheque and relying upon decision of High Court of Tamil Nadu, in case of M/s Shivashakti Mills V/s Chandrashekhar reported in DCR 2011 (1) 627 and the High Court of Rajashtan in Keshar Prasab Saraf V/s Sahabram reported in DCR 2012(1) 635 held that burden of proving foundational facts and passing of consideration for cheque, was on complainant proceeded to hold that complainant had failed to discharge this burden and acquitted accused. Learned counsel submitted that when accused did not dispute his signature on cheque and its issuance to complainant, his bare total denial is taken as rebuttal and by wrongly placing burden of proving entire transaction beyond all reasonable doubt upon complainant, trial court acquitted accused, which is 7 not only contrary to decisions of Hon'ble Supreme Court in Rangappa V/s Sri Mohan reported in (2010) 11 SCC 441, and Kishan Rao V/s Shankargouda reported in (2018) 8 SCC 165.
6. On the other hand, learned counsel for accused supported impugned judgment passed by trial Court and relying upon decision of this Court in Criminal Appeal No.1349/2010 disposed of on 10.04.2013 in case of Shashikala T. V/s Usha S. Prabhakar, submitted that burden to prove passing of consideration for a cheque was on complainant and on his failure, held that acquittal of accused was justified.
7. I have heard learned counsel, perused the impugned judgment and record.
8. In his evidence, PW1 has reiterated entire complaint averments. He has marked cheque as Ex.P1, bank endorsement as Ex.P2, statutory notice 8 as Ex.P3, postal receipt as Ex.P3 (a) and postal cover as Ex.P4. During his cross-examination, it is elicited from complainant that he was working in PCMI Cement Factory and that he had fifteen acres of agricultural land in Andhra Pradesh. It was also elicited that complainant did not have any source of income (at time of recording evidence i.e. 17.07.2014). It was also elicited that the sum rupees two lakhs was paid on 1.5.2007 at his residence in Ballari, in presence of Kalappa Mestru. It is further elicited that complainant is not an income tax assessee. It is also elicited that accused did not produce documents to show he owns land in Andhra, and that money he lent to accused was obtained by selling his bakery and also from settlement amount from PCMI cement factory.
9. Though it is elicited that complainant does not have any source of income, complainant has 9 stated it was 'at present', i.e. at time of recording of his evidence on 17.07.2014, at which date, said admission would be inconsequential to this case. Likewise though it is elicited that complainant got some settlement amount from PCMI cement factory and some amount by selling his bakery, there is no further cross-examination of witness on this aspect, whether said monies were sufficient to lend rupees two lakhs to accused etc. Under the circumstances, observations of Hon'ble Supreme Court in Kumar Exports V/s Sharma Carpets reported in 2009(2) SCC 513 quoted in Kishan Rao (supra) do come to my mind.
"The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence 10 of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist."
emphasis supplied
10. In this case, accused contended that cheque in question was a post dated cheque issued for security purposes. Which means accused admitted his signature on cheque and its issuance to complainant. Consequently presumption under 11 Section 118 and 139 of N.I. Act would be available to complainant as per Kishan Rao (supra) and Rangappa V/s Sri Mohan, reported in 2010 (11) SCC 441. As accused failed to substantiate his contention by cogent evidence, it has to be held that he failed to rebut presumption in favour of complainant.
11. Apart from above, complainant has examined witness-PW1 and marked Exhibits P1 to P4. I have perused contents and find that they duly corroborate complainant's case and substantiate all ingredients to constitute offence under Section 138 of N.I. Act.
12. The reasons assigned by the trial Court firstly that complainant has failed to prove passing of consideration amount to accused for issuing cheque. The trial court observed that no man of ordinary prudence would lend huge amount of rupees two 12 lakhs, without obtaining any document for security of said amount. The said reason is ex-facie perverse. When there is no dispute about signature on cheque and its issuance, the complainant is entitled for presumption about the same being issued towards discharge of existing debt, and therefore, the complainant is not required by law to prove the said fact. Further, it is the complainant's case that the money was lent against receipt of cheque in question, which was a post dated cheque.
13. The Trial Court next doubted financial capacity of complainant and his source of income to lend such loan. Even this has to fail, as there is presumption available to the complainant under Section 118 and Section 139 of N.I.Act, and unless such presumption is rebutted by accused with cogent evidence, complainant need not prove entire 13 transaction, as if in a civil suit. Therefore, even this reason has to be held to be grossly illegal.
14. The Trial Court has further held that there is no explanation by complainant why such huge amount was not paid either through D.D. or by cheque. Relying upon decisions in M/s Shivashakti Mills (supra) and Keshar Prasab Sar af (supra) held that burden of proving foundational facts and passing of consideration for cheque, was on complainant, and as he failed to discharge this burden, it acquitted accused. As rightly submitted by the counsel for Appellant, bare total denial by accused cannot be taken as rebuttal of presumption, in view of Kumar Exports (supra). The complainant is only required to prove the following facts in order to bring home prosecution for offence under Section 138, namely:
a) That cheque was issued;14
b) The same was presented;
c) It was dishonoured, on presentation;
d) A notice, in terms of provisions of NI Act was served on the person, to be made liable;
e) Despite service of notice, neither any
payment was made nor any other
obligations, if any, were complied within 15 days from date of receipt of notice.
[refer NK Wahi Vs. Shekhar Singh and Ors. reported in (2007) 9 SCC 481] And which facts are held to be established by the complainant.
15. Though accused has relied upon decision in Shashikal a T. (supra), it is seen that the Court had held that accused rebutted presumption available to complainant by cogent evidence and taking note of failure of complainant to establish transaction and financial capacity of complainant beyond reasonable doubt, upheld acquittal of accused. The facts and 15 issues considered therein are different from this appeal. Hence, said decision does not lend assistance to accused in this case.
16. In the result, appeal is allowed, impugned judgment passed by trial Court is set aside, accused is convicted of offence punishable under Section 138 of Negotiable Instruments Act, 1881.
Sd/-
JUDGE CL K 16 ORDER ON SENTENCE Learned counsel for appellant submitted that accused borrowed loan from complainant and failed to repay it since more than thirteen years. The cheque issued by accused on 01.06.2007 was dishonored for insufficiency of funds, which accused was well aware of. The complainant is made to approach courts in order to realize his money. On above grounds, he sought for imposition of severe sentence and maximum penalty permissible in law.
On the other hand, learned counsel for accused submitted that accused was an agriculturist in financial distress and sought for minimal sentence/penalty.
Following directions issued by Hon'ble Supreme Court in Damodar S.Prabhu V/s Sayed Babalal H., reported in (2010) 5 SCC 663, I feel it just and 17 proper to impose a sentence of fine instead of imprisonment as the offence is in the nature of a civil wrong and the purpose of Section 138 is compensatory and not punitive. The accused is hereby sentenced to pay a fine of Rs.4,00,000/- (Rupees four lakhs only) i.e. twice the amount of the cheque and in default of payment of fine, to undergo simple imprisonment for a period of six months.
Acting under Section 357 of the Code of Criminal Procedure, it is ordered that a sum of Rs.3,90,000/- (Rupees three lakhs ninety thousands only) shall be paid to the complainant as compensation and remaining amount is ordered to be defrayed to the State towards expenses incurred in prosecution.
Sd/-
JUDGE CL K