Karnataka High Court
Sri S. Rajendra vs Sri M. Narasimhalu on 12 September, 2024
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NC: 2024:KHC:37621
CRL.A No. 1080 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF SEPTEMBER, 2024
BEFORE
THE HON'BLE MRS JUSTICE M G UMA
CRIMINAL APPEAL NO. 1080 OF 2015 (A)
BETWEEN:
SRI. S. RAJENDRA,
SON OF S. RAMA RAJU,
AGED ABOUT 41 YEARS,
RESIDING AT NO.24,
SRINIVASA COMPLEX,
KODIGEHALLI MAIN ROAD,
5TH MAIN ROAD, BALAJI LAYOUT,
BHADRAPPA LAYOUT,
BANGALORE - 560 094.
...APPELLANT
Digitally signed (BY SRI. VENKATESH H.N., ADVOCATE)
by SWAPNA V
Location: high
court of
karnataka AND:
SRI M. NARASIMHALU,
SON OF LATE M. PENCHALAIAH,
AGED ABOUT 53 YEARS,
RESIDING AT NO.15,
13TH CROSS, 6TH MAIN,
MSR NAGAR, MATHIKERE,
BANGALORE - 560 054.
...RESPONDENT
(BY SRI. S D N PRASAD, ADVOCATE)
THIS CRL.A. IS FILED U/S.378(4) CR.P.C PRAYING
TO SET ASIDE THE JUDGMENT DATED 17.03.2015
PASSED BY THE XVIII A.C.M.M., BANGALORE IN
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NC: 2024:KHC:37621
CRL.A No. 1080 of 2015
C.C.NO.32405/2011 - ACQUITTING THE
RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF
N.I. ACT.
THIS CRL.A., COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MRS JUSTICE M G UMA
ORAL JUDGMENT
The complainant in C.C.No.32405/2011 on the file of the learned XVIII Additional Chief Metropolitan Magistrate, Bengaluru (hereinafter referred to as 'the Trial Court), is impugning the judgement dated 17.03.2015 acquitting the respondent-accused for the offence punishable under section 138 of Negotiable Instruments Act, 1881 (for short the 'N.I. Act').
2. For the sake of convenience, the parties shall be referred to as per their ranking and status before the trial Court.
3. Brief facts of the case are that, the complainant has filed the private complaint in P.C.R.No.19674/2011 against the accused alleging commission of the offence punishable under -3- NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 Section 138 of N.I. Act. It is contended by the complainant that the complainant and accused were friends since about five years and the accused had approached the complainant during first week of March, 2011 seeking financial help to meet his financial needs. Accordingly, the complainant had lent an amount of Rs.15,50,000/-. The accused promised to repay the same within two months. He issued a post dated cheque dated 25.05.2011 for Rs.15,50,000/- towards repayment of the loan amount. After the date mentioned in the cheque, the complainant presented the cheque for encashment, but the same was dishonoured as there was insufficient funds. The complainant orally informed this fact to the accused who requested him to present the cheque once again. Accordingly, the cheque was re-presented on 12.07.2011, but again, the cheque was dishonoured as there was insufficient funds.
4. The complainant issued legal notice notifying the accused about dishonour of cheque and called upon him to pay the cheque amount. The notice was served to the accused through his wife but inspite of that, he neither repaid the cheque amount nor replied to the legal notice. Thereby, the accused has committed the offence punishable under Section -4- NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 138 of N.I.Act. Accordingly, he requested the trial court to take cognizance of the offence and to initiate legal action.
5. Accordingly, the trial court took cognizance of the offence and summoned the accused. The accused appeared before the Trial Court and pleaded not guilty for the accusation made against him. The complainant examined himself as PW1 and got marked Exs.P1 to Ex.P7 in support of his contention. The accused denied all the incriminating materials available on the record in his statement under Section 313 of Code of Criminal Procedure, 1973 and led his evidence as DW1 and got marked Exs.D1 and D2. The Trial Court after taking into consideration all these materials available on record came to the conclusion that the complainant has not proved his financial capacity to lend the amount and also formed an opinion that there was chance of misusing of the cheque in question and accordingly, the accused was acquitted. Being aggrieved by the same, complainant is before this Court.
6. Heard Sri. Venkatesh H.N., learned counsel for the appellant and Sri. SDN Prakash, learned counsel for the -5- NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 respondent. Perused the materials including the Trial Court records.
7. Learned counsel for the appellant contended that the complainant and the accused were friends and the accused has availed loan of Rs.15,50,000/- during first week of March 2011 and towards repayment of the said amount. The accused had issued post dated cheque dated 25.05.2011. When the cheque was presented for encashment, the same was dishonoured as there was insufficient funds in the account of the accused. When this fact was brought to the notice of the accused, he requested for re-presenting the cheque for encashment and accordingly, the accused has re-presented the cheque. But however, even then the cheque was dishonoured as there was insufficient funds in the account of the accused.
8. Learned counsel contended that legal notice as per Ex.P3 notifying the accused regarding dishonour of the cheque was sent calling upon him to pay the cheque amount. The same was served on the accused as per postal acknowledgment marked as per Exs.P.4 and 5. Inspite of that, the accused has neither repaid the cheque amount nor replied to the legal -6- NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 notice and thereby, he has committed the offence punishable under Section 138 of NI Act.
9. Learned counsel contended that the complainant has examined himself as PW1. During cross examination, nothing has been elicited from him. The complainant got marked Exs.P.1 to 7 in support of his contention. The accused has taken the specific defence that he used to entrust civil works to the complainant and used to pay for the work done by the complainant, after completion of the same. Therefore, it was his contention that blank cheque was issued in favour of the complainant as security and the same was misused by the complainant. The accused has never probabalised the defence taken by him either during cross examination of PW1 or when he examined himself as DW1.
10. Learned counsel contended that the accused had issued the notice as per Ex.D.1 to the complainant calling upon him to return the cheque. Ex.D.2 is the certificate of posting to contend that Ex.D.1 - notice was infact sent to the complainant. No postal acknowledgment is produced and under such circumstances, even the trial Court disbelieved the version -7- NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 of the accused regarding sending of Ex.D.1 to the complainant. Learned counsel submitted that when the accused admits issuance of cheque Ex.P.1 with his signature, presumption under Section 139 of NI Act would arise and the burden shifts on the accused to rebut the presumption. The accused has never rebutted the presumption in any manner. Under such circumstances, the accused is liable for conviction.
11. Learned counsel placed reliance on the decision of the Hon'ble Apex Court in P Rasiya Vs. Abdul Nazer and another1 in support of his contention that, once issuance of cheque is admitted, presumption under Section 139 NI Act would arise and the accused has failed to rebut such legal presumption. He also placed reliance on the decision of the Hon'ble Apex Court in Bir Singh Vs. Mukesh Kumar2 in support of his contention that even when the defence is taken that the blank cheque as a security was issued, on presentation of the same results in dishonour of such cheque, it would give rise to presumption under Section 139 of NI Act. He also placed reliance on the decision of the Hon'ble Apex Court in 1 AIR Online 2022 SC 1373 2 (2019) 4 SCC 197 -8- NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 Rohitbhai Jivanlal Patel Vs. State of Gujrat3 regarding the manner in which, the accused has to rebut the legal presumption under Section 139 of NI Act and contended that the accused in the present case has never rebutted the legal presumption. Inspite of that the trial Court proceeded to acquit the accused solely on the ground that the complainant has not proved his financial capacity to lend the amount and also formed an opinion that there was chance of misuse of cheque, which was never the defence taken by the accused.
12. Learned counsel contended that the accused has also not denied the financial capacity of the complainant. Under such circumstances, the judgment acquitting the accused passed by the trial Court is perverse, illegal and the same is liable to be set aside. Accordingly, he prays for allowing the appeal in the interest of justice.
13. Per contra, learned counsel for the respondent opposing the appeal submitted that the complainant has failed to prove issuance of cheque in question towards discharge of legally enforceable debt. The complainant who is examined as 3 (2019) 18 SCC 106 -9- NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 PW-1 has stated that he had lent huge sum of Rs.15,50,000/- in cash near a Tea stall. No witnesses were present at the time of lending the amount. No documents were obtained to evidence the fact of lending. PW-1 was not aware of the date on which the loan was lent and he was not knowing as to for what purpose the accused had availed loan, where the accused used to reside and what he was doing. All these facts and circumstances, falsifies the contention of the complainant regarding lending of the huge amount of Rs.15,50,000/-. The Trial Court on the application made by the accused summoned the bank statement pertaining to the complainant. The statement discloses that hardly there was any balance in the bank account. Under such circumstances, the version of the complainant cannot be believed even for a moment.
14. Learned counsel further submitted that the blank cheque with the signature of the accused was issued in favour of the complainant as security, as the complainant was doing civil work. The said cheque was misused by the complainant and presented for encashment under such circumstances, the presumption under Section 139 of NI Act would not arise.
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015
15. Learned counsel further submitted that the Trial court has taken into consideration all these materials on records and arrived at a right conclusion that the complainant has not proved his financial capacity to lend the amount nor he proved the actual lending of the amount and under such circumstances, the presumption under Section 139 of NI Act would not arise. There are no reasons to interfere with the impugned judgment of acquittal passed by the Trial Court.
16. Learned counsel also submitted that when the Trial Court has acquitted the accused by assigning valid reasons, even if a second opinion could be formed on the very same set of facts, the same cannot be the ground for setting aside the judgment of acquittal and to convict the accused. Hence, he prays for dismissal of the appeal.
17. In view of the rival contentions urged by learned counsel for both the parties, the point that would arise for my consideration is:
"Whether the impugned judgment of acquittal passed by the Trial Court suffers from perversity or illegality and calls for interference by this Court?"
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 My answer to the above point is in the 'Affirmative' and pass the following:
REASONS
18. It is the specific contention of the complainant that he had lent an amount of Rs.15,50,000/- to the accused and towards discharge of the same, the accused had issued the cheque Ex.P-1 dated 25.05.2011. When the cheque was presented for encashment, the same was dishonored twice as there was insufficient funds in the account of the accused. The legal notice as per Ex.P-3 was issued and served on the accused as per Ex.P-4. Inspite of that, the accused had neither repaid the cheque amount nor issued any reply. Thereby, he has committed the offence punishable under Section 138 of NI Act.
19. It is pertinent to note that the accused never denied issuance of the cheque with his signature. According to the learned counsel for respondent, the accused had issued the blank cheque with his signature to the complainant as security as the complainant was doing some civil work for which, the payment was being made by the accused at a later period of
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 time. The blank cheque issued as security was misused by the complainant and he never borrowed any amount as contended by the complainant.
20. When the accused admits issuance of the cheque with his signature, even if he contends that it was a blank cheque, Section 20 of NI Act authorizes the complainant to fill in the cheque and present the same for encashment. When once the accused admits his signature and issuance of cheque, the presumption under Section 139 of NI Act would arise in favour of the complainant and against the accused.
21. In this regard, it is relevant to place on record the decision of the Hon'ble Apex Court in Bir Singh (supra), wherein, the Hon'ble Apex court referring to its earlier decisions held in paragraphs 34 and 36 as under:
"34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
35.xxxx
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015
36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
22. In P Rasiya (supra), the Hon'ble Apex Court re- iterated the position of law that when once the complainant discharges his initial burden of proving issuance of cheque by the accused with his signature, the presumption under Section 139 of NI Act would arise and the burden shifts on the accused to rebut the same. Of course, the degree of proof required to be proved by the accused is not as high as the burden on the complainant to prove the guilt of the accused, but he is required to probablize his defence. Therefore, when the accused contends that he had issued the blank cheque with his signature to the complainant as he was undertaking the civil works, the accused is required to probablize the said defence either by cross examining PW-1 or by producing any cogent materials or by stepping into the witness box. During cross examination of PW-1, nothing has been elicited from the witness to probablize the defence now taken by the accused. Even though the accused has stepped into the witness box and
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 deposed before the Trial court, he has only re-iterated his defence stating that as security, blank cheque with his signature was issued to the complainant.
23. The Hon'ble Apex Court in P Rasiya (supra) has commented on the High Court for having failed to note the legal presumption under Section 139 of NI Act where the burden shifts on the accused to prove the contrary when he admits issuance of cheque with his signature. The Hon'ble Apex Court made it clear that once the initial burden of proving issuance of the cheque by the accused with his signature is proved by the complainant, the burden shifts on the accused to prove the contrary and to rebut the presumption.
24. The Hon'ble Apex Court in the recent decision in Rohitbhai Jivanlal Patel (supra), reiterated the legal position that once the complainant is successful in discharging his initial burden to prove issuance of cheque by the accused with his signature, the presumption under Section 139 of NI Act would arise and the burden shifts on the accused to rebut the legal presumption. The Hon'ble Apex Court reiterated the degree of
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 proof to rebut the presumption on the part of the accused and held in paragraph 18 as under:
"In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused....."
(Emphasis supplied)
25. The Hon'ble Apex Court has placed reliance on its earlier decision in Kumar Exports and Sharma Carpets4 and extracted paragraphs No.20 and 21, which read as under:
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the 4 AIR 2009 SC 1518
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. 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 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. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act.
21. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
(emphasis supplied)
26. The Hon'ble Apex Court has also placed reliance on its earlier decision in Rangappa Vs. Sri. Mohan'5 and extracted paragraphs No.26 and 28 which reads as under:
"26. In light of these extracts, we are in agreement with the respondent claimant that the 5 (2010) 11 SCC 441
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 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 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.
28. 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."
(emphasis supplied)
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015
27. Regarding degree of proof, to rebut the presumption, the Hon'ble Apex Court held in paragraph 16 as under:
16. All of these circumstances led the High Court to conclude that the accused had not raised a probable defence to rebut the statutory presumption. It was held that:
"6. Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the court in favour of the complainant. The presumption referred to in Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
What is required to be established by the accused in order to rebut the presumption is different from each case under the given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the court.
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 The defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. Unless this barrier is crossed by the accused, the other defence raised by him whether the cheque was issued towards the hand loan or towards the amount spent by the complainant need not be considered...."
(emphasis supplied) Hence, the High Court concluded that the alleged discrepancies on part of the complainant which had been noted by the trial court were not material since the accused had failed to raise a probable defence to rebut the presumption placed on him by Section 139 of the Act. Accordingly, the High Court recorded a finding of conviction.
28. Thus, it is settled proposition of law that the complainant is required to discharge his initial burden of issuance of cheque by the accused with his signature to raise the legal presumption under Section 139 of NI Act. When the legal presumption arises, the burden shifts on the accused to rebut the same by probabalising his defence.
29. 34. It is pertinent to note that the accused has marked Ex.D-1 and 2 to contend that way back on 03.12.2009
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 he had issued the letter as per Ex.D1 to the complainant calling upon him to return the blank cheque that was issued in his favour. Ex.D-2 is the certificate of posting to contend that the notice was sent to the complainant. Even the Trial Court has not accepted this contention taken by the accused rather it disbelieved the version of the accused regarding sending of the letter as per Ex.D-1. Nothing is placed on record to probabalise his contention that the notice as per Ex.P.1 was in fact sent and served on the complainant. Admittedly, the accused had not taken any action against the complainant even after issuance of Ex.D-1. It is pertinent to note that the accused had not issued stop payment instructions to the bank to safeguard his interest. This conduct of the accused falsifies his contention regarding issuance of the letter as per Ex.D-1 and D2.
30. During cross examination by the learned counsel for the complainant, the witness again admits that Ex.P-1 belongs to his bank account and it bears his signature. The witness states that he is not having any document to support his contention that they had entrusted some civil works to the complainant and in that regard, he had issued blank cheque. The witness categorically stated during cross examination that,
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 he never issued any legal notice to the complainant with regard to the defence taken by him. Admittedly, the accused had not issued any reply even after receipt of the legal notice. Under such circumstances, it cannot be said that the accused is successful in probabalizing his defence, thereby rebutting the presumption under Section 139 of NI Act.
31. It is pertinent to note that the accused had not disputed the financial capacity of the complainant to lend the amount at any point of time. When the accused had not rebutted the presumption by probabalizing his defence, it will not lie in the mouth of the accused to dispute the financial capacity of the complainant at this stage. But once the accused fails to rebut the presumption, he is liable for conviction. Therefore, I am of the opinion that the respondent - accused is liable for conviction for the offence punishable under Section 138 of NI Act.
32. I have gone through the impugned judgment passed by the Trial Court. Even though it disbelieved the version of the accused regarding Ex.D-1 and 2 and also noted that the accused had admitted issuance of the cheque Ex.P-1
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 with his signature, proceeded to question the financial capacity of the complainant for lending the huge amount of Rs.15,50,000/-. The Trial Court failed to take into consideration the settled position of law regarding legal presumption under Sections 118 and 139 of NI Act and the shifting of the burden on the accused to rebut the same. It also fails to take into consideration the fact that the accused had miserably failed to rebut the presumption by probablizing his defence. Mere stating in the chief examination about his defence will not probablize his defence. Moreover, the Trial Court has placed reliance on the bank statement pertaining to the complainant to form an opinion that the complainant was not having financial capacity to lend the amount which was not called for when accused admittedly issue of the cheque-Ex.P.1 with his signature and had failed to probabalise his defence. Moreover, it is pertinent to note that, the same was never the defence taken by the accused that the complainant was not having financial capacity. It was never elicited from PW-1 that he had withdrawn the amount from his bank account for lending it to the accused. Moreover, the bank statement relied on by the Trial Court was never exhibited before the Trial Court. Hence, I am of the
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 opinion that the Trial Court has committed grave illegality and the reasons assigned are perverse and against the settled position of law. Under such circumstances, the impugned judgment calls for interference by this Court. Accordingly, I answer the above point in affirmative.
REGARDING SENTENCE Heard learned counsel for the appellant and respondent on imposition of sentence.
Learned counsel for the respondent submitted that the cheque is of the year 2011 and the Trial court acquitted the accused by forming an opinion that the complainant is not successful in proving the guilt of the accused beyond reasonable doubt. Under such circumstances, maximum leniency may be shown in favour of the accused while sentencing.
Per contra, learned counsel for the complainant submitted that the cheque is of the year 2011. For 13 long years, the complainant was made to suffer as the accused even after admitting issuance of cheque has refused to pay the cheque amount. Hence, prays for imposing maximum sentence.
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 On perusal of the materials on record, it is found that the accused has admitted issuance of the cheque with his signature at the first instance. Even though he has not chosen to issue any reply to the legal notice, which is served on him, he never disputed financial capacity of the complainant. But however, he was successful before the Trial court.
The Hon'ble Apex Court in Bir Singh (supra) placing reliance on its earlier decision in R.Vijayan v/s Baby6 highlighted the position of law that the object of chapter XVII of NI Act is both punitive as well as compensatory and restitutive in nature. It also stated that it provides a single forum and single proceeding for enforcement of criminal liability by reason of dishonor of cheque and for enforcement of civil liability for realization of the cheque amount, thereby, obviating the need for the creditor to move two different forum for relief.
The Hon'ble Apex Court in R.Vijayan (supra) expressed its anguish that some Magistrates are adopting traditional view, that the criminal proceedings were for imposing punishment and did not exercise discretion to direct payment of 6 (2012) 1 SCC 260
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 compensation, causing considerable difficulty to the complainant, as invariably the limitation for filing the civil cases would expire by the time the criminal case was decided. The Hon'ble Apex Court further mandated that the Court should uniformly exercise the power to levy fine upto twice the cheque amount and keeping in view the cheque amount and the simple interest thereon at 9 % per annum as the reasonable quantum of loss, direct payment of such amount as compensation.
Admittedly, the complainant has not filed any suit for recovery of the loan amount. Therefore, I am of the opinion that the accused may be sentenced of pay fine, which is double the amount of the cheque. Since, the Trial Court had acquitted the accused for the reasons stated by it, I do not propose to impose any substantive sentence to undergo the imprisonment.
Accordingly, I proceed to pass the following:
ORDER
(i) The Criminal Appeal is allowed.
(ii) The judgment dated 17.03.2015 passed in C.C.No.32405/2011, on the file of the learned 18th
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NC: 2024:KHC:37621 CRL.A No. 1080 of 2015 Additional Chief Metropolitan magistrate, Bangalore is hereby set aside.
(iii) Consequently, the accused is convicted for the offence punishable under Section 138 of NI Act and is sentenced to pay fine of Rs.31,00,000/- (Rupees Thirty One Lakhs only) within 4 months from toady, failing which, he shall undergo simple imprisonment for a period of 1 year.
Out of the fine amount, an amount of Rs.30,50,000/- (Rupees Thirty Lakhs Fifty Thousand only), is ordered to be paid as compensation to the complainant.
Registry is directed to send back the Trial Court records along with the copy of the judgment for its information and also for needful action i.e., to secure the presence of the accused and to issue conviction warrant.
Sd/-
(M G UMA) JUDGE SS/BH/SPV List No.: 2 Sl No.: 27