Karnataka High Court
Prabhakar Shripati Hegde vs B.V.Naik on 22 March, 2018
Author: John Michael Cunha
Bench: John Michael Cunha
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
ON THE 22ND DAY OF MARCH, 2018
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
CRIMINAL APPEAL NO.2569 OF 2010
BETWEEN
PRABHAKAR SHRIPATI HEGDE
AGE: ABOUT 41 YEARS, OCC PRABHAKAR ELECTRONICS
R/O HOSPET ROAD, SIRSI, DIST. U.K.
... APPELLANT
(BY SRI.A.R.HEGADE, ADV.)
AND
B.V.NAIK
AGE: 45 YEARS, OCC MANIKANTA
AGENCIES AND FURNITURES
R/O SHRADDANANDAGALLI
SIRSI, DIST. U.K.
... RESPONDENT
(BY SRI.C.V.ANGADI, ADV.)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378
OF CR.P.C. PRAYING TO SET ASIDE THE ORDER DATED
24.11.2009 PASSED BY THE COURT OF THE I ADDL. JMFC,
SIRSI IN C.C.NO. 923/2002 AND CONVICT THE RESPONDENT /
ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138
OF NEGOTIABLE INSTRUEMENTS ACT.
THIS CRIMINAL APPEAL COMING ON FOR HEARING THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
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JUDGMENT
This appeal is directed against the judgment dated 24.11.2009 passed by the I Additional JMFC, Sirsi in C.C. No.923/2002, whereby the respondent/accused is acquitted of the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter called as "N.I.Act").
2. The appellant/complainant initiated proceedings against the respondent/accused under Section 200 of Cr.P.C. by presenting a complaint before the JMFC, Sirsi. In the complaint, he averred that he is carrying on business in the name and style "Prabhakar Electronics" at Sirsi. Accused purchased Whirlpool Refrigerators, Videocon Crown TV Sets, Vijayalaxmi Grinder, Johnson Mixture etc., from the complainant amounting to Rs.2,45,000/-. In repayment of the said amount, he issued a cheque bearing No.097970 dated 16.12.2001 drawn on KDCC Bank Limited, Sirsi for Rs.2,45,000/-. The said cheque when :3: presented for collection came to be dishonoured for "funds insufficient".
3. The complainant caused a notice dated 18.12.2001. The registered envelope was returned with an endorsement "not claimed". Contending that the notice is deemed to have been served and the accused failed to comply with the demand, the complainant sought action against the accused under Section 138 of N.I.Act.
4. The complainant examined himself before the Court and reiterated the averments made in the complaint and produced in evidence, the original cheque Ex.P-1, the memos issued by the Bank - Ex.P-2 and Ex.P-3, copy of the legal notice - Ex.P-4, unclaimed postal envelope - Ex.P-5 and the copy of the compliant - Ex.P-7.
5. In rebuttal, the accused examined himself as D.W.1 and took up a plea that he had no transaction whatsoever with the complainant and he did not purchase the alleged household articles from the complainant at any :4: point of time and did not issue the cheque in question to the complainant in discharge of the alleged debt or liability.
6. The Trial Court considered the above evidence and was of the opinion that the complainant failed to produce the credit bill or any other document in proof of the sale of electronic items to the accused and therefore, by drawing adverse inference against the complainant, came to the conclusion that the complainant failed to establish subsisting debt in respect of which the cheque was issued by the accused and consequently acquitted the accused of the alleged charge under Section 138 of N.I. Act.
7. Feeling aggrieved by the impugned judgment, the appellant/complainant has preferred this appeal.
8. I have heard the learned counsel for the appellant Shri A.R.Hegde, and learned counsel for the respondent Shri C.V.Angadi.
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9. Learned counsel for the appellant at the outset would submit that the accused has admitted the issuance of the cheque. In the course of his evidence, he has stated that the said cheque was given by him to the complainant as security on behalf of his father. Under Section 138 of N.I. Act, in order to render the accused liable for the offence, the complainant is required to establish that the dishonoured cheque was issued by the accused in discharge of a "debt" or "other liability". The expression "other liability" includes the liability of a third party. In the instant case, in the course of the cross examination, it was suggested to P.W.1 that the cheque in question was issued by the accused as security for the debt due by his father. Therefore, it cannot be said that there was no valid consideration for the issuance of the cheque. Thus, the facts proved by the complainant squarely attract the ingredients of the offence under Section 138 of N.I. Act. The learned Magistrate, therefore, has fallen in error in acquitting the accused. In support of this argument, the :6: learned counsel has referred to the decision of the Hon'ble Supreme Court of India in the case of Rangappa vs. Mohan, AIR 2010 SC 1898 and with reference to para 10 thereof would submit that in view of the presumption available under Section 139 of N.I. Act and Section 118 of the Indian Evidence Act, the burden of proof is on the accused and in the said circumstances, even if the pleadings were minimal and the complainant failed to make specific averments with regard to the "debt" or "other liability", the complainant cannot be non-suited and the prosecution laid against the accused cannot be dismissed on that score.
10. Per contra, refuting the above arguments, Shri C.V.Angadi, learned counsel appearing for the accused has referred to the following judgments:
(i) (2006) 6 SCC 39 (M.S.Narayana Menon vs. State of Kerala),
(ii) (2010) 11 SCC 203 (Central Bank of India vs. Asian Global Ltd.,) :7:
(iii) (2013) 1 SCC 327 (Reverend Mother Mary Kutty vs. Remi C. Kottaran)
(iv) LAW (MADRAS) 2004 (7) 128 (Murugan Finance vs. P.V.Perumal)
11. By placing reliance on the above judgments, learned counsel would contend that the specific case of the complainant is that the accused borrowed electronic articles from the complainant and in repayment thereof, issued the cheque in question. The above pleading indicates that the complainant did not have any transaction whatsoever with the father of the accused. The complainant has failed to adduce any evidence in proof of his transaction with the accused and therefore, he cannot now turn around and put forth a plea that the cheque in question was issued in respect of "other liability". The complainant cannot make out a new case. The averments made in the complaint are required to be strictly construed. The complainant has to stand or fall on the basis of the case set up by him. The complainant having :8: based his case on the specific allegation that the cheque in question was issued in discharge of the debt due by the accused, failure on the part of the complainant to prove the transaction between him and the accused would necessarily entail dismissal of the complaint. Therefore, the impugned judgment cannot be faulted with. Further, the learned counsel would submit that the accused is a Teacher by profession. The allegation made in the complaint are that he purchased the articles for the purpose of business. Merely because his father and brothers are carrying on the said business, the liability incurred by the firm run by his father and brothers cannot be fastened on the accused. Further, he contended that the above plea is urged by the appellant for the first time before this Court. The complainant did not set up the plea that the cheque in question was issued by the accused in discharge of "other liability". Therefore, the complainant is not entitled to urge the said plea at this stage. Hence, he seeks for dismissal of the appeal.
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12. I have bestowed my anxious thought to the contentions urged by the parties and have carefully examined the records.
13. The accused does not dispute the fact that the cheque Ex.P-1 was issued by him. In the course of cross- examination, he has unequivocally stated as under:
"F ¥ÀæPÀgt À zÀ ¦üAiÀiÁ𢠣À£Àß «gÀÄzÀÝ JgÀqÀÄ ZÉPï ¨ÉÆãÀì ¥ÀæPÀgt À UÀ¼À£ÀÄß zÁR°¹zÁÝgÉ CAzÀgÉ ¸Àj. F ¥ÀæPÀgt À PÉÌ ¸ÀA§AzsÀ ¥ÀlAÖ vÉ £Á£ÀÄ ¦üAiÀiÁð¢UÉ AiÀiÁªÀzÉà ºÀt ¤ÃrgÀĪÀÅ¢¯Áè. E£ÉÆßAzÀÄ ¥ÀæPÀgt À PÉÌ ¸ÀA§AzsÀ¥l À AÖ vÉ ¸À® é à ºÀtªÀ£ÀÄß ¤ÃrzÉÝÃ£É J£ÀÄߪÀÅzÀÄ ¸ÀjAiÀįÁè. DzÀgÉ gÁfUÁV 10,000-00 gÀƪÀ£ÀÄß £Á£ÀÄ ¦üAiÀiÁð¢UÉ ¤ÃrgÀÄvÉÛãÉ. £Á£ÀÄ ªÀÄtÂPAÀ oÀ Jd¤ì ªÀåªÀºÁgÀzÀ gÁfUÁV 10,000-00 gÀÆ ªÀ£ÀÄß ¦üAiÀiÁð¢UÉ ¤ÃrzÉÝãÉ. ªÀÄtÂPAÀ oÀ Jd¤ìAiÀÄ£ÀÄß £À£Àß vÀªÀÄä £Àr¸ÀÄvÁÛ£.É CzÀÄ £À£Àß vÀªÀÄä wÃjPÉÆAqÀ £ÀAvÀgÀ £À£Àß vÀAzÉAiÀÄ ºÉ¸jÀ £À°è £ÀqAÉ iÀÄÄwÛz.É £ÁªÀÅ D Jd¤ì ªÀÄÄSÁAvÀgÀ në, UÁæöåAqÀgÀ, ¥À¤ðZÀgÀ ªÀåªÀºÁgÀªÀ£ÀÄß ªÀiÁqÀÄvÉÛêÉ. ... ... ...
¤¦1 ZÉPÀÄÌ ªÀÄvÀÄÛ CzÀgÀ°ègÀĪÀ ¸À» £À£ÀßzÀÄ J£ÀÄߪÀÅzÀÄ ¸Àj. £Á£ÀÄ £À£Àß vÀAzÉAiÀÄ ¥ÀgÀªÁV eÁ«Ää£À ¸À®ÄªÁV ¤¦1 ZÉPÀÌ£ÀÄß ¦üAiÀiÁð¢UÉ PÉÆnÖz.ÉÝ "
14. The above evidence goes to show that the cheque Ex.P-1 bears the signature of the accused. The contents thereof are admitted by the accused. Nowhere : 10 : the accused has taken up a plea that the writings borne on the said cheque are not in his handwriting or that he has issued any blank cheque to the complainant or to his father. Though in his reply under Section 313 of Cr.P.C., he has taken up a plea that the said cheque was given by him to the proprietor of the Manikantha Agency and the Proprietor of Manikantha Agency has handed over the said cheque to the complainant, yet the fact remains that the cheque in question was drawn by the accused. A bare reading of the cheque reveals that it was drawn in the name of the complainant namely Prabhakar Electronics. The date as well as the name of the drawee and the amount including the signature appears to have been written at a stretch. It is not the case of the accused that any of the above writings were filled up either by the complainant or by the Proprietor of the Manikantha Agency. Thus it stands established that the said cheque was issued by the accused.
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15. There is no clear evidence as to whether he issued the cheque to the complainant or to the Manikantha Agency. In this regard, I find from the evidence that the accused has taken inconsistent and contradictory stand. As already stated above, in his evidence he has unequivocally stated that the cheque was handed over by him to the complainant as security on behalf of his father. But during his examination under Section 313 of Cr.P.C., he has stated that he handed over the said cheque to the Proprietor of the Manikantha Agency. This inconsistency if analyzed in the backdrop of the fact that the name of the drawer is written by the accused himself, it leads to the only inference that the said cheque was drawn by the accused in the name of the complainant. According to the accused, he issued the aforesaid cheque on behalf of his father as security.
16. The question whether the accused could be held liable for the consequences of the dishonour of cheque issued by him towards discharge of the debt due : 12 : by his father need not detain us in view of the authoritative pronouncement of the Hon'ble Supreme Court in the case of I.C.D.S. Limited Vs. Beena Shabeer and Another reported in (2002) 6 SCC 426.
17. In the said case, the husband of respondent No.1 namely accused No.1 entered into a hire-purchase agreement with the appellant company (ICDS Limited) for the purpose of purchase of Maruti Car on hire-purchase basis. Respondent No.1, his wife stood as guarantor in respect of the hire-purchase facilities being made available to her husband. In respect of the aforesaid transaction respondent No.1 issued a cheque. The said cheque was dishonored. The appellant issued a statutory notice calling upon the respondent No.1 to pay the amount. Respondent No.1 failed to comply with the demand, hence, action was initiated under Section 138 of N.I. Act. The respondent moved a petition under Section 482 of Cr.P.C. for quashing the complaint on the ground that there was no subsisting debt in respect of which the respondent No.1 was liable to : 13 : issue the said cheque. The High Court having accepted the plea quashed the proceedings on the reasoning that the issuance of the cheque cannot be co-related for the purpose of discharging any debt or liability and as such, the complaint under Section 138 of N.I. Act cannot be maintainable. However, on appeal, the Hon'ble Supreme Court in para 10 of the aforesaid judgment has held as under:
"10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the section stands with the words "Where any cheque". The abovenoted three words are of extreme significance, in particular, by reason of the user of the word "any"- the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been : 14 : careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment."
Further in para 11, it is held that:
"11. ......The language of the Statue depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embagor in the matter of application of the provisions of Section 138 of the Act: 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the Statute. Any contra interpretation would defeat the intent of the legislature......"
18. In the instant case, the accused has admitted that Manikanta Agency was run by his brother and after his death the same business is continued by his father. Further, in his cross-examination, D.W.1 has categorically : 15 : stated that, "£ÁªÀÅ D Jd¤ì ªÀÄÄSÁAvÀgÀ në, UÁæöåAqÀg,À ¥À¤ðZÀgÀ ªÀåªÀºÁgÀªÀ£ÄÀ ß ªÀiÁqÀÄvÉÛêÉ." The above evidence clearly goes to show that the accused and his family members are carrying on the business of sale of TV, grinders and furniture through Manikanta agencies. This evidence leads to the inevitable inference that the cheque in question was issued by the accused to satisfy the debt or liability due by the Manikanta Agencies in respect of the purchase of TVs grinders and furniture from the complainant. This transaction therefore, brings the case within the expression 'other liability'. In this context, it is also relevant to refer to the suggestion made by the learned counsel for the accused to PW1 in the course of his cross- examination suggesting that the above cheque is issued by the accused in respect of the transaction carried on by Venkataraman Naik - the father of the accused. This evidence in my view is sufficient to hold that the cheque in question was issued by the accused in discharge of other : 16 : liability. Therefore, it cannot be said that the cheque was issued by the accused without any lawful consideration.
19. In order to constitute the offence under Section 138 of NI Act, cheque in question should have been issued by the accused for discharge of 'any debt' or 'other liability' and the said cheque must have been dishonoured. The expression 'any debt' or 'other liability' mean existing debt or ascertained liability. These words cannot be given a restrictive meaning to cover only the debt or liability due or payable by the accused alone. The use of the words 'any' connote extension. For 'any' is a word of wide meaning and prima facie the use of it excludes limitation (justice G. P. Singh 'Principles of Statutory Interpretation, 13th edition page 179). The expression 'any debt' or 'other liability' therefore signifies that it is intended to include every debt or liability for the discharge of which the cheque is issued by the drawer. : 17 :
20. Section 138 of the N.I. Act does not debar a person from taking up the liability of another person. It is for this reason, the explanation to Section 138 of N.I. Act defines the expression 'debt' or 'other liability' as a legally enforceable debt or 'other liability'. Further, the presumption under Section 139 of N.I. Act provides that unless the contrary is proved, the holder of a cheque received the cheque for the discharge in whole or in part of 'any debt' or 'other liability'. Therefore, 'any debt' and 'other liability' would also cover the liability of another person as well.
21. The Section does not require the complainant to specifically aver in the complaint that the cheque in question was issued by the accused in discharge of 'any debt' or 'other liability'. Accused having admitted the issuance of the cheque, and the same having been drawn in the name of the complainant, the burden of proving that there was no existing debt or liability shifts on the drawer/accused. By drawing the instrument in the name : 18 : of the complainant, the accused has impliedly entered into an agreement or promise to discharge the debt of his father which is a valid consideration for the accused to issue the subject cheque. Therefore, viewed from any angle, I do not have any hesitation to hold that, in the instant case, the complainant has proved that the cheque in question was issued by the accused in discharge of legally enforceable debt. The said cheque is proved to have been dishonoured for insufficiency of funds. The complainant has complied with all the requirements prescribed under Section 138 of N.I. Act thereby rendering the accused liable for conviction under the said provision of law.
22. The findings recorded by the Court below, in my view, are contrary to Section 138 of N.I. Act. The accused having admitted the issuance of cheque and the complainant having proved the existence of a legally recoverable debt and also having established the circumstances in which the accused issued the said : 19 : cheque, in my view, the presumption engrafted under Section 139 of the N.I. Act comes into play. The accused has failed to rebut the said presumption with cogent and acceptable evidence. Therefore, on both these counts, the findings recorded by the Court below cannot be sustained. For the reasons discussed above, the impugned judgment is liable to be set aside.
Accordingly, the appeal is allowed. The impugned judgment dated 24.11.2009 passed by the I Additional JMFC, Sirsi in C.C.No.923/2002 is set aside. The accused is convicted for the offence punishable under Section 138 of N.I. Act.
Having regard to the transaction in respect of which the said cheque was issued in the year 2001 and long lapse of time, the accused is sentenced to pay a fine of Rs.3,75,000/-.
Out of the above fine amount, a sum of Rs.3,70,000/- (Rupees Three Lakh Seventy Thousand : 20 : only) shall be made over to the complainant by way of compensation and the remaining Rs.5,000/- shall be remitted to the Government by way of fine.
Appeal stands allowed as indicated above.
Sd/-
JUDGE MBS/Rsh