Karnataka High Court
Sri Prakash vs Sri Ramanath on 19 March, 2020
Author: Mohammad Nawaz
Bench: Mohammad Nawaz
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF MARCH, 2020
BEFORE
THE HON'BLE MR. JUSTICE MOHAMMAD NAWAZ
CRIMINAL APPEAL NO.971/2014
Between:
Sri Prakash
S/o Muthappa Reddy
Aged about 28 years
Aralepet
Bangalore - 560 053. ... Appellant
(By Sri K.P.Bhuvan, Advocate)
And:
Sri Ramanath M Hegde
S/o Manjunath K Hegde
Aged about 44 years
Proprietor
M/s PACTEC INDIA
No.14 and 15
Goods Shed Road
(Dr.T.C.M.Rayan Road)
Near B.J.P Office
Bangalore - 560 053. ...Respondent
( By D.P Prasanna, Advocate)
This Criminal Appeal is filed under Section 378(4) of Cr.P.C.
praying to set aside the order dated 1.08.2014 passed by the XV
Additional C.M.M., Bangalore, in C.C.No.33586/2011-acuqitting
the respondent/accused for the offence p/u/s 138 of N.I. Act.
This Criminal Appeal coming on for final disposal this day,
the Court delivered the following:
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JUDGMENT
The complainant in C.C.No.33586/2011 on the file of the Court of XV Additional C.M.M., Bangalore city, has preferred this appeal challenging the judgment and order dated 01.08.2014, thereby acquitting the accused/respondent of an offence punishable under Section 138 of Negotiable Instruments Act, 1881.
2. I have heard the learned counsel for the appellant/complainant and the learned counsel for the respondent/accused.
3. It is the case of the complainant that accused was a tenant under him and he was a chronic defaulter in paying the rent. The accused issued two cheques to the complainant towards the portion of arrears of rent, by cheque bearing No.672603 dated 18.08.2011 for a sum of Rs.49,000/- and a cheque bearing No.672604 dated 19.08.2011 for a sum of Rs.46,500/-, both drawn on ICICI Bank Ltd, Chamarajpet Branch, Bangalore. When the said cheques were presented for encashment by the complainant with his banker M/s 3 Syndicate Bank, Balepet Branch, Bangalore -53, they came to be dishonored with an endorsement "Funds Insufficient" on 20.08.2011. Thereafter, the complainant issued a legal notice and despite service of notice, the accused failed to make payment within the stipulated period and therefore, he committed an offence punishable under Section 138 of N.I Act.
4. Before the trial Court, the complainant got examined himself as PW.1 and got marked Exs.P1 to P7. The accused got examined himself as DW-1.
5. The learned Magistrate after considering the oral and documentary evidence on record, acquitted the accused, aggrieved by which the present appeal is preferred.
6. The contention of the learned counsel for the appellant is that the complainant has fulfilled all the requirements envisaged under Section 138(A to C) of N.I Act. The accused has admitted the cheque as well as his signature on it. Therefore, a legal presumption exists in favour of the 4 complainant. The trial Court ought to have drawn the said presumption and held that cheque was issued in discharge of legally recoverable debt. He contends that the amount mentioned in the cheques were towards arrears of rent in respect of the premise where wife of the accused was a tenant. In respect of two premises, the complainant filed a suit for ejectment and for recovery of arrears of rents against the accused and his wife. The amount mentioned in cheques in question is not included in the arrears of rent claimed by the complainant in the said suits and therefore, the trial Court was not justified in holding that the entire arrears of rents have been paid by the accused. He submits that the trial court has come to a wrong conclusion that there is no amount due by the accused and failed to draw presumption under Sections 118 and 139 of N.I Act. He submits that when the complainant discharges his initial burden and fulfills all the requirements under Section 138 of N.I Act, the burden is shifted to the accused to disprove that there are no arrears of rent. But, the trial Court without considering the same has acquitted the accused.
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7. The learned counsel for the appellant has placed reliance on two decisions of the Hon'ble Apex Court in the case of KISHAN RAO v. SHANKARGOUDA reported in (2018) 8 SCC 165 and in the case of T.P MURUGAN v. BOJAN POSA NANDHI reported in AIR 2018 SCC 3601.
8. Per Contra, learned counsel for the respondent would contend that the complainant filed two suits namely O.S Nos.1841/2011 and 1842/2011 on the file of City Civil Court, Bengaluru, for ejectment and seeking arrears of rent from the accused and his wife, who were tenants under him. Towards the entire arrears in respect of the said two premises, the accused paid a total amount of Rs.7,10,000/- which is admitted by the complainant. He submits that the cheque in question was issued towards security and the same has been misused by the complainant for making unlawful gain. He submits that the trail Court has considered the entire facts and circumstances of the case and acquitted the accused. Accordingly, he seeks to dismiss the appeal. 6
9. It is the specific case of the complainant that the accused was a tenant under him and he was a chronic defaulter in paying the rent. Therefore, he terminated the tenancy of the accused and filed ejectment suit and also sought for arrears of rent. It is stated that towards arrears of rent the accused issued two cheques bearing No.672603 dated 18.08.2011 for a sum of Rs.49,000/- and another cheque bearing No.672604 dated 19.08.2011 for a sum of Rs.46,500/-. The said cheques were presented to the bank but dishonored for "Insufficiency of Funds". The complainant got issued demand notice on 26.08.2011 and since acknowledgment was not received, a complaint was filed before the postal authority on 29.09.2011 and in turn postal authorities issued a reply to the notice stating that on 10.10.2011, notice was duly served on the accused. Therefore despite service of notice, there was no compliance, hence, accused committed an offence punishable under Section 138 of N.I. Act.
10. The complainant in his evidence has reiterated the complaint averments. In the cross-examination conducted by 7 the defence, he has admitted that he has filed two suits, which was decreed and later he filed execution petition. He has admitted that the accused paid a sum of Rs.7,10,000/-. He has admitted that in respect of O.S No.1841/2011, the arrears of rent claimed was Rs.68,875/- and in O.S No.1842/2011 the arrears of rent claimed was Rs.1,92,375/-. He has stated that the accused has paid the entire arrears claimed in the original suit. Though PW.1 in his cross- examination has denied that the accused paid the entire arrears of rent, however, he has admitted that the accused has paid rents claimed by him in two suits filed by him.
11. The accused who is examined as DW-1 has stated that he is not entitled to pay any arrears of rent as the entire arrears of Rs.7,10,000/- was paid in the Court in the original suits filed by the complainant. DW.1 in his chief examination has stated that the disputed cheques were given towards security. The same is not denied by the complainant in the cross-examination of DW-1.
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12. According to the complainant, the cheques dated 18.08.2011 is for a sum of Rs.49,000/- and dated 19.08.2011 for a sum of Rs.46,500/-, which were issued by the accused towards arrears of rent. Exs.D1 to D2 are the certified copies of execution petitions, which are produced in C.C No.33585/2011. The complainant has claimed arrears of rent including other cost to an extent of Rs.2,96,667/- in Ex.D1. The said arrears of rent claimed was from 05.03.2011 upto 05.06.2013. Total arrears of rent claimed as per Ex.D2 from 05.03.2011 to 05.06.2013 is Rs.3,96,521/-. The cheques are dated 18.08.2011 and 19.08.2011. The complainant has admitted that he has received the entire rents and the same is calculated from 05.03.2011 to 05.06.2013, which therefore includes the period mentioned in the cheque. When the complainant admits having received the entire arrears from the accused, then it cannot be said that the amount mentioned in the cheque in question is a legally enforceable debt. Under such circumstances, the case of the complainant that the accused is due to pay the arrears of rent mentioned in the cheques cannot be accepted.
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13. In the decisions cited by the learned counsel for the appellant the principle enunciated are that if the accused admits the signature, then a presumption would arise under Section 139 of N.I Act. If the said presumption is not rebutted by the accused by leading any evidence, then it has to be presumed that the complainant has proved existence of legally enforceable debt and the accused had issued the cheque towards discharge of such debts.
14. In the instant case, it is no doubt true that the accused has admitted the signature on the cheque. However, according to him, blank cheques were issued as security. The same has not been disputed in the cross-examination by the complainant. It is well settled that to rebut the presumption, standard of proof is that of preponderance of probabilities. In the present case, the accused is able to rise the probable defense, which creates doubt about the existence of legally enforceable debt or liability.
15. The trial Court having considered the material on record and after giving reasons, has acquitted the accused. I 10 find no grounds to interfere with the said judgment and order of acquittal passed by the trial Court. Therefore, the appeal fails. Accordingly, appeal is dismissed.
Sd/-
JUDGE HB/-