Karnataka High Court
The Manager vs Shri Sitaram Pandurang Ubare on 6 September, 2021
Author: Rajendra Badamikar
Bench: Rajendra Badamikar
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 6TH DAY OF SEPTEMBER, 2021
BEFORE
THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR
CRIMINAL APPEAL NO.2687/2013
BETWEEN:
THE MANAGER
SHRI JAGAJYOTI BASAVESHWAR CREDIT
SOUHARD SAHAKARI NIYAMIT SANKESHWAR,
R/BY SHRI SHIVANAND APARAI CHOUGALA
AGE: MAJOR, OCC: MANAGER,
R/O. SANKESHWAR, DIST: BELGAUM
...APPELLANT
(BY SRI.ANOOP G.DESHPANDE, ADV.)
AND:
SHRI SITARAM PANDURANG UBARE
R/O. SANKESHWAR, NOW AT
LONERE GOREGAON ROAD,
TQ: MAGAON, DIST: RAYAGAD
MAHARASHTRA STATE.
...RESPONDENT
(BY SRI.BALAGOUDA A.PATIL, ADV.)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION U/S
378(1) OF CR.P.C. SEEKING TO SET ASIDE THE JUDGMENT
DATED 10.05.2013 PASSED BY THE JMFC, SANKESHWAR IN
C.C.NO.512/2005.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 26.08.2021 COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
2
JUDGMENT
This criminal appeal is filed by the appellant/complainant under Section 378(1) of Cr.P.C. for setting aside the judgment of acquittal dated 10.05.2013 passed by the JMFC, Sankeshwar in C.C.No.512/2005 by allowing this criminal appeal and convicting the respondent/accused for the offence punishable under Section 138 of Negotiable Instruments Act.
2. For the sake of convenience, the parties herein are referred with the original ranks occupied by them before the trial court.
3. Brief facts leading to the case are that, complainant is the manager and authorized person of the complainant-society. On 20.12.2003 the accused has applied for a loan of Rs.6,00,000/- from the complainant- society and the same was sanctioned to an extent of Rs.5,50,000/-. It is alleged that the accused has agreed to repay the loan amount with interest in 10 installments payable once in three months and he has also executed 3 necessary documents in favour of the complainant-society. But he has failed to repay the loan amount. When the complainant-society demanded repayment of the loan, on 21.04.2005, the accused issued a cheque for Rs.7,01,447/- including interest portion towards discharge of his legally enforceable debt. When the said cheque was presented for encashment, the same was bounced for insufficient of funds. As per the request of the accused, the cheque was presented and again it was dishonoured. On 18.06.2005 it was again presented at the request of the accused, but it was dishonoured for insufficient funds. Hence, the legal notice came to be issued. As the accused has not paid the amount, a complaint came to be lodged. After taking cognizance and sworn statement of the complainant by the learned Magistrate, the process came to be issued. The accused has appeared and was enlarged on bail. He denied the accusation.
4. The complainant was examined as P.W.1 and one witness was examined as P.W.2 and 13 documents 4 were marked as Exs.P1 to P13. Thereafter, the statement of the accused under Section 313 of Cr.P.C. was recorded and accused denied the incrementing evidence appearing against him. He did not lead any independent evidence, but he got marked 15 documents as Exs.D1 to D15 during the course of cross-examination of P.Ws.1 and 2. After hearing the arguments and after perusing the oral as well as documentary evidence in detail, the learned Magistrate has acquitted the accused for the offence punishable under Section 138 of N.I.Act. Being aggrieved by this judgment of acquittal, the appellant/complainant has filed this appeal.
5. Heard the arguments advanced by the learned counsel for the appellant/complainant and learned counsel for the respondent/accused. The trial court records are secured and I have perused them in detail.
6. Learned counsel for the appellant/complainant would submit that the trial court has failed to appreciate the oral and documentary evidence in proper perspective 5 and has committed an error in acquitting the accused, which has resulted in miscarriage of justice. He would also contend that the accused has not denied the signature on the cheque, loan application and other documents and when he has not denied the issuance of cheque, the trial court has committed an error in dismissing the complaint on technical ground. He would also contend that cheque is issued in the name of "Jagajyoti Sri Basaveshwar Credit Souhard Sahakari Niyamit" and the same was later merged with "Sri Basaveshwar Souhard Sahakari Niyamit" and it was renamed as "Sri.Basaveshwar Urban Credit Souhard Sahakari Niyamit". He would contend that this process is well within the purview of law and it is evident from the documentary evidence. He would contend that registration number clearly disclose that entity is one and the same. Hence, he would seek for allowing the appeal by setting aside the impugned judgment of acquittal.
7. On the contrary, learned counsel for the respondent/accused would contend that there is no 6 document to show the merger of the society. Admittedly, the cheque is in the name of "Jagajyoti Sri Basaveshwar Credit Souhard Sahakari Niyamit" which was merged with "Sri Basaveshwar Souhard Sahakari Niyamit" and it was renamed as "Sri.Basaveshwar Urban Credit Souhard Sahakari Niyamit". The documents do not establish that P.W.1 was authorized in this regard and there is no document to show that merged society changed into "Sri.Basaveshwar Urban Credit Souhard Sahakari Niyamit". He would also contend that, as on the date of issuing notice there was no authorization, as notice was issued on 27.06.2005, but the resolution is dated 30.06.2005 and complaint was filed on 02.08.2005. He would also contend that loan application is dated 20.12.2003 and sanctioned on 22.12.2003, but promissory note was signed on 24.12.2003. Hence, he would contend that there is no legally enforceable debt. Hence, he would contend that the trial court has considered all these aspects in proper perspective and the judgment of the trial court is in 7 accordance with law and does not suffer from any infirmity. Hence, he would seek for rejection of the appeal.
8. Having heard the arguments and perusing the records, now the following point would arise for my consideration:
Whether the appellant/complainant proves that the judgment of the trial court is erroneous and illegal and the trial court has committed an error in acquitting the accused?
9. It is to be noted here that complaint is filed against the accused in his individual capacity, but the cheque was issued in the name of Ubhare Engineering Works by its proprietor. Further, it is important to note here that accused has not disputed his signature on Ex.P1 cheque. He has also admitted that he is the proprietor of the Ubhare Engineering Works. It is contended that proprietary firm is not included as an accused and there is no liability of the proprietary firm. In the instant case, there is no dispute that accused is the sole proprietor of the firm and he was operating the account of the firm and 8 Ex.P1 cheque was drawn on Hireyankashi Employees Co- Op. Bank Ltd., Sankeshwar. As such, it is evident that accused was incharge of the business of the proprietary firm at the relevant point of time.
10. In this context, learned counsel for the appellant/complainant placed reliance on the decision of the Hon'ble Apex Court in the case of M/s Shankar Finance & Investments Vs State of Andhra Pradesh & Others in Crl.A.No.1449/2003 and the decision of the Allahabad High Court in the case of Dhirendra Singh Vs State of U.P. and Another in 2231/2020 and the judgment of this Court in the case of Shri.M.Chinnakoti Reddy Vs. Smt.B.Bhagyalakshmi passed in Crl.A.No.2556/2009 dated 02.09.2013. The Hon'ble Apex Court has analyzed the difference between the company and proprietary firm as an association of the individuals. It is clearly observed that, a proprietary concern is nothing but an individual trading under a trade name and an individual carries on business in a name or 9 style other than his own name. This Court in Crl.A.No.2556/2009 has elaborately discussed this aspect and held that a proprietorship is one which is managed by an individual and it would consist of sole proprietor. Hence, it is held that there is no indication in Section 141 of N.I.Act that a company would include a proprietorship and that a complaint would not be maintainable if it is brought in the name of the proprietor without the proprietorship concerned also being made a party.
11. Admittedly, in the instant case, loan is not obtained by the proprietary concern, but loan was obtained by the accused in his individual capacity. It is evident from Exs.D1 and D2 that he has applied for loan. Under such circumstances, the said contention holds no water and accused being the proprietor has issued the cheque pertaining to the proprietorship concern operated by him. As such, the said ground is not available to the accused. The other ground regarding residence of the accused etc. holds no water, as he as dealing with sugar factory and 10 was a contractor. Apart from that, the accused has taken inconsistent defences and his defences are also not established, as he is not stepped into the witness box. He has admitted that he has issued cheque. His contention is that he issued blank cheque to one Mangasuli in order to look after his financial transactions as he has suffered fracture injuries between 2002-2007, but this aspect is not established by the accused. Apart from that, under Section 139 of N.I.Act, the burden is on the accused to rebut the presumption available in favour of the complainant. Admittedly, the cheque is in favour of the complainant and as such, the presumption is in favour of the complainant. The burden is on the accused to rebut the said presumption. Exs.D1 and D2 disclose that he has issued cheque in his personal capacity and though Ex.P1 pertains to the firm, it is evident that it is operated by him only.
12. Much arguments have been advanced regarding application for loan was given on 20.12.2003 and loan has been granted on 22.12.2003 and promissory 11 note being signed on 24.12.2003, but all these aspects are irrelevant in view of the fact that the accused has admitted the cheque and Exs.D1 and D2 establish that he has applied for loan. It is not the case of the accused that loan was not disbursed to him. He has taken a defence regarding cheque being handed over to Mangasuli, but that was not established by him.
13. The complaint came to be filed on 02.08.2005 by the Manager, Shivanand A.Chougala. The legal notice was issued by the counsel on 27.06.2005. Hence, it is contended that there was no authorization for prosecuting the accused by the complainant-society. Ex.P7 disclose that complainant was authorized by resolution dated 30.06.2005. Though there was no authorization for issuance of notice, but that was ratified by issuing authorization to complainant P.W.1 to prosecute the matter, which presupposes that issuance of notice has been ratified. The resolution was dated 30.06.2005 and the complaint was filed on 02.08.2005. No doubt the letter 12 regarding authorization was issued is dated 03.09.2005, but it is not the case of the accused that there was no such resolution or in the absence of resolution this false letter has been issued. No such defence has been set up. Further, the society itself has not raised any issue and there is no evidence to show that society is not interested in prosecuting the accused. Under such circumstances, the said ground urged by the accused is unsustainable.
14. The complaint was lodged by the Manager of Jagajyoti Shree Basaveshwar Credit Souhard Sahakari Niyamit, Sankeshwar. The cheque is in the name of Jagajyoti Shree Basaveshwar Credit Souhard Sahakari Niyamit, Sankeshwar itself. P.W.1 is the manager of the said society. Subsequently, it is asserted that the said society is merged with Sri Basaveshwar Souhard Sahakari Niyamit, Sankeshwar. This fact is evident from Ex.P7A. From Ex.P7A and Ex.D8, it is evident that Sri Basaveshwar Credit Souhard Sahakari Niyamit, Sankeshwar was merged 13 with Sri Basaveshwar Shouhard Sahakari Niyamit, Sankeshwar.
15. Much reliance is placed by the defence counsel on Ex.D8 that the notice was issued under Ex.D8 dated 03.12.2011 in the name of Sri Basaveshwar Urban Credit Souhard Sahakari Niyamit, Sankeshwar. This notice is of the year 2011, but it is to be noted here that the complaint was filed in the year 2005 itself. Hence, Ex.D8 which was issued during the pendency of this criminal case has no much relevancy and the trial court has given much importance to Ex.D8 claiming that the same was issued pertaining to the same transaction as admitted by P.W.1. It is argued that there is no evidence placed on record to show that Sri Basaveshwar Urban Credit Souhard Sahakari Niyamit is merged.
16. The trial court has held that there is no certainty as on whom the liability of the accused to be declared. But it is to be noted here that whether it is Jagajyoti Basaveshwar Credit Souhard Sahakari Niyamit or 14 Sri Basaveshwar Urban Credit Souhard Sahakari Niyamit is botheration of the complainant. If it is merged into Sri Basaveshwar Urban Credit Souhard Sahakari Niyamit then Sri Basaveshwar Urban Credit Souhard Sahakari Niyamit will take the benefit of the order, but that is nothing to do with the accused, as the evidence on record does establish that accused is liable to pay complainant-society and there is a legally enforceable debt in favour of the complainant- society. Any other society which takes over the complainant-society will have the benefit of the order. However, that was nothing to do with the accused. The accused is liable to pay the complainant-society and evidence does establish that he has issued cheque in favour of the complainant-society towards discharge of debt. Under Section 139 of the N.I.Act, there is a presumption in favour of the complainant and the burden is on the accused to rebut the said presumption, but the accused has not rebutted the said presumption and he has not stepped into the witness box. He admits signature on the cheque Ex.P1. Even the loan transaction under Exs.D1 15 and D2 are not disputed by him. The other documents do establish that there is a transaction between the accused and the complainant-society. Due to merger of the complainant-society accused cannot get benefit of the same or exonerate him from his liability of paying legally enforceable debt. The trial court has given much importance regarding variance in the balance referred in Ex.D8, but it is to be noted here that the complaint was filed in the year 2005 itself and as on that date the amount was Rs.7,01,446/-, but subsequent payment and other things becomes relevant and no higher amount is claimed under Ex.D8, but lesser amount has been claimed. Under these circumstances, the accused cannot take benefit of Ex.D8 and it is not the case that he has cleared the entire loan amount.
17. The ground urged by him that he is not the resident of Sankeshwar etc. holds no water, as the documents produced itself disclose that he was having contract work of sugar factory in Sankeshwar. He would 16 not have worked there without there being an employment. Under these circumstances, the accused failed to rebut the presumption and now he wanted to take advantage of merger of the complainant-society, which he is not entitle and that does not absolve his liability. Hence, the trial court has committed an error in acquitting the accused only on the basis of Ex.D8 and variance in the amount referred in Ex.D8 and failed to take note of the fact that Ex.D8 was issued in 2011 and though complaint was filed in 2005 itself. Hence, the judgment of the trial court is erroneous and illegal and it has lead to miscarriage of justice. As such, it calls for interference. Hence, prima facie evidence on record clearly establish that the accused has committed an offence under Section 138 of N.I.Act. As such, the appeal is required to be allowed.
18. Admittedly, the cheque amount is Rs.7,01,447/- and the matter is pending since 2005. The accused all along taking inconsistent defences. Though in Ex.D8, it is mentioned as Rs.5,74,897/-, that cannot be 17 looked into at this juncture and looking to the conduct of the accused/respondent, in my considered opinion, he is required to be imposed sentence of fine to the tune of Rs.7,50,000/-. Out of it, a sum of Rs.7,00,000/- shall be paid to the complainant-society by way of compensation. Hence, the point under consideration is answered in the affirmative and I proceed to pass the following:
ORDER The appeal is allowed. The judgment of acquittal dated 10.05.2013 passed by the JMFC, Sankeshwar in C.C.No.512/2005 is set aside. The respondent/accused is held guilty for the offence punishable under Section 138 of N.I.Act and he is convicted and sentenced to pay fine of Rs.7,50,000/- and in default of payment of fine to undergo simple imprisonment for a period of six months.
Out of the fine amount, Rs.7,00,000/- shall be paid to the complainant-society by way of compensation and remaining balance of Rs.50,000/- shall be credited to the State account.
Sd/-
JUDGE MBS/-