Karnataka High Court
Sri Prabhakar Murthy vs S G Shankaraiah on 18 December, 2015
Author: A.V.Chandrashekara
Bench: A.V.Chandrashekara
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF DECEMBER 2015
BEFORE
THE HON'BLE MR. JUSTICE A.V.CHANDRASHEKARA
CRL. R.P. NO.98/2012
BETWEEN:
SRI PRABHAKAR MURTHY
S/O G SRINIVASULU
AGED ABOUT 64 YEARS,
R/A NO.475, 5TH MAIN,
DOLLARS COLONY, RMV II STAGE,
BANGALORE-560094
... PETITIONER
(By Sri: K SRINIVASA, ADV.)
AND
S G SHANKARAIAH
S/O LATE GARALAPURAIAH
AGED ABOUT 55 YEARS,
R/A NO.66, 4TH MAIN,
MARUTHINAGARA, KAMAKSHIPALYA,
BANGALORE-560079
... RESPONDENT
(By Sri: H JAYAKARA SHETTY, ADV.)
THIS CRL.RP FILED U/S.397 AND 401 CR.P.C BY
THE ADVOCATE FOR THE PETITIONER PRAYING THAT
THIS HON'BLE COURT MAY BE PLEASED TO SET ASIDE
2
THE ORDER DATED:7.1.12 PASSED BY THE P.O., FTC-VII,
BANGALORE CITY IN CRL.A.NO.621/11 AND ORDER
DATED:31.1.11 PASSED BY THE XVI ADDL.C.M.M.,
BANGALORE CITY IN C.C.NO.11677/08.
THIS CRL.RP HAVING BEEN HEARD AND RESERVED
ON 14.12.2015 AND COMING ON FOR PRONOUNCEMENT
OF ORDERS THIS DAY, A.V.CHANDRASHEKARA, J., MADE
THE FOLLOWING:
ORDER
The present revision petition is filed under Section 397 read with Section 401, Cr.P.C. challenging the judgment of conviction and sentence passed by the XVI Additional Chief Metropolitan Magistrate, Bengaluru, in C.C.11677/08 and affirmation of the same in Crl.A.621/11 on the file of Fast Track Court-VII. Petitioner was the sole accused in the said complaint filed by the respondent for the offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act, for brevity).
2. After contest, the petitioner has been convicted and sentenced to pay Rs.2.22 lakhs as fine and out of 3 the same, Rs.2,20 lakhs to be paid as compensation to the respondent-complainant vide judgment dated 31.1.2011. Against the said judgment of conviction and sentence, an appeal was filed in terms of Section 374(3), Cr.P.C. in Crl.A.621/11, and the said appeal came to be dismissed by confirmation of judgment passed by the trial court. Hence this revision petition is filed challenging the concurrent finding.
3. The facts leading to the filing of this revision petition are as follows:
a) Parties are known to each other for quite a long time. The complainant was supplying PCBs to the accused. Accused is stated to have requested the complainant to pay hand-loan of Rs.2.20 lakhs and on 6.11.2007, complainant paid Rs.2.20 lakhs by way of cash. The accused had agreed to repay the same within 2 months. Even after the lapse of 2 months, the accused did not pay the loan amount he had availed.4
Hence the complainant orally requested him to repay the amount. Later a cheque was issued by the accused for Rs.2,20 lakhs on 7.1.2008 in discharge of the debt in favour of the complainant drawn on State Bank of India, Yeshwantpur Branch.
b) When the said cheque was presented for encashment, an endorsement was issued by the banker to the effect that there was no sufficient funds in the account of the accused. As a result of the same, the complainant got issued a legal notice to the accused on 4.2.2008 calling upon him to repay the said amount within 15 days from the date of receipt of notice, lest, he would be constrained to initiate civil and criminal action. In spite of issuance of notice, the accused avoided to pay the amount as a result of which the complaint was filed before the trial court.
c) The case set up by the accused is one of total denial of the allegations alleged against him. According 5 to him, he had received Rs.2,00,000/- in the year 2003 as loan from the complainant and the same was repaid by him after some time and there was no relationship of debtor and creditor. It is further case that a blank cheque containing his signature was somehow taken away by the complainant and the same has been misused.
d) The learned judge, after contest, found that the accused has not probablised the defence and the presumption available under Sections 118 and 139 of the Act has stood unrebutted. Even the first appellate court has concurred with the judgment of the trial court. Hence the present revision petition is filed.
4. Learned counsel for the respondent-complainant has vehemently argued that the revisional jurisdiction vested in this court under Section 397 read with Section 401, Cr.P.C. is very limited and the revisional court cannot re-assess the evidence. His argument is that the 6 court cannot interfere with the concurrent findings with regard to non-rebuttal of presumption under Sections 118 and 139 of the Act. It is argued that the accused- revision petitioner could not ably probablise the defence that the complainant had stealthily taken away the blank cheque containing his signature and has made use of the same to extract money. Hence he has requested the this court to dismiss the revision petition.
5. Per contra, learned counsel representing the revision petition has vehemently argued that even though the revision petitioner is not able to probablise the defence of allegation that the complainant stealthily took away the blank cheque and misused it, he is able to probablise that there was no relationship of creditor and debtor as on 2008 or prior to it. He has argued that the revision petitioner is able to probablise the defence in regard to the only one loan transaction he had with the complainant in the year 2003 and that the 7 said loan was repaid. The material admission elicited from the mouth of PW1 is stated to have been totally ignored while evaluating his evidence and this has caused grave injustice to the accused and therefore, the revision petition is perfectly maintainable. He has further argued that the decision rendered in the case of HITEN P.DALAL .v. BRATINDRANATH BANERJEE reported in AIR 2001 SC 3897(1) is clearly distinguishable on facts and the same is not applicable to the facts of this case.
6. After going through the records and hearing the learned counsel for the parties, the following points arise for the consideration of this court:
Whether the trial court as well as the first appellate court have ignored the material admissions elicited from the mouth of PW-1 with reference to Ex.D3 leading to grave miscarriage of justice, and thus the said apparent error needs 8 to be revised under Section 397 read with Section 401, Cr.P.C.?
REASONS
7. Sections 118(a) and Section 139 of the Act allow the court to draw a presumption in regard to passing of consideration under a negotiable instrument and issuing the cheque towards discharge of partial or whole debt. The said provisions are extracted below:
118. Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made:-
(a) of consideration- that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
139. Presumption in favour of holder.- It shall be presumed, unless the contrary is 9 proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
Learned counsel for the respondent has argued that these two presumptions of law have been discussed at length by a Bench consisting of three Judges of the Hon'ble apex court in the case of HITEN DALAL (supra) and that the presumption of law has been raised by the court while evaluating the evidence. A party must rebut the said presumption by leading proper evidence and mere plausible explanation is not sufficient. It is further held that proof of explanation is necessary. In the said decision, it is specifically held that in the case of mandatory presumption, the burden cast on the accused would not be as light as it is where the presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered 10 by the accused is reasonable or probable. It is further made clear that it must be shown that the explanation is a true one and such explanation must be supported by proof. Unless such explanation is substantiated by proof, the presumption created by the provisions of Sections 118(a) and 139 of the Act cannot be said to be rebutted.
8. The complainant himself is examined as PW1. The fact that the accused was purchasing PCBs from the complainant every now and then is not in dispute. The complainant has specifically admitted in his evidence that most of the time, the accused used to return the money in respect of materials purchased by him and at times he used to postpone, but repay the same without fail. What is deposed by him in his examination-in- chief is that the accused was his friend and he requested him to provide a personal loan for Rs.2.2 lakhs to meet the expenses of his business and he met 11 him in November 2007. It is his case that he gave Rs.2.2 lakhs to the accused on 6.11.2007 and at that time accused had assured that he would return the same within 2 month. In spite of several requests and reminders, the accused failed to repay the amount and after persuasion, accused assured that he would maintain sufficient balance so that the cheque could be honoured on the said date. But the said cheque was returned for insufficiency of funds in the account of the drawer, i.e. accused.
9. Ex.P2 is the cheque dated 7.1.2008 drawn in favour of the complainant by the accused for Rs.2.2 lakhs. Accused has not denied the signature found on Ex.P2 and therefore it is a negotiable instrument. It is true that the presumption of law will have to be drawn in regard to issuing of the cheque vide Ex.P2. If presumption is drawn, the accused is stated to have received Rs.2.2 lakhs from the complainant and the 12 cheque was issued in discharge of the whole debt. Whether he has been able to really rebut the presumption, is the question.
10. The accused himself has been examined as DW1. He has taken a stand that he had put his signature on a blank cheque and that was stealthily taken away by the complainant and is being made use of to indicate existence of relationship of creditor and debtor. It is his case that he had received Rs.2.00 lakhs as loan from the complainant in the year 2003 and it was repaid by way of cheque in 2003 itself. The admission elicited from the mouth of PW1 is totally ignored oby the trial court. It is also argued that the accused was not due to the complainant relating to the commercial transactions he had with him pertaining to supply of PCBs.
11. Ex.D2 is the endorsement given by the accused as proprietor of M/s Veekay Electronics on 10.9.2007 in favour of the complainant. It reads as follows: 13
M/s Annapurna Enterprises Bangalore.
As per our books of Accounts the outstanding Balance of Rs.10,220/- towards an purchase of PCB's. This is our full and final settlement. There is no further outstanding balance subject to the realization of cheque.
Sd/-
Veekay Electronics Propreitor Cheque No.253821 10.9.2007 Standard Chartered Bank On a plain reading of Ex.D2, it is clear that the accused was not liable to pay anything to the complainant except Rs.10,220/- which was the outstanding balance towards commercial transactions pertaining to the purchase of PCBs by him from the complainant.14
12. The case of the complainant is that in November 2007, accused had approached him for financial assistance of Rs.2.2 lakhs and he gave him the said amount in cash on 6.11.2007, and that accused had assured him of repaying it within 2 months. In spite of requests and reminders, he did not repay the same and ultimately accused gave him a cheque drawn in his favour for Rs.2.2 lakhs. It is drawn on State Bank of India, Yeshwanthpur Branch, dated 7.1.2008.
13. Section 118(b) of the Negotiable Instruments Act speaks as to the presumption relating to the date found on the cheque. The said provision is as follows:
118. Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made:-
(a) ...
(b) As to date- that every negotiable instrument bearing a date was made or drawn on such date;-15
On a plain reading of the date found in Ex.P2, it must be presumed that Ex.P2 was drawn or made on 7.1.2008. The complainant has not whispered anything about the date on which he issued the cheque. Of course there is no legal bar as to issuance of a post dated cheque. It is not the case of the complainant that the cheque is stated to have been drawn or made on 7.1.2008. The complaint is silent as to the date on which the cheque was issued in his favour.
14. What is averred by him in the complaint is as follows:
'Despite several requests and reminders, accused failed to make payment to the complainant. After continuous follow-up, accused offered the cheque and assured the complainant that he would maintain sufficient balance when the cheque would be duly honoured on its due date.' If one were to accept the contents of paragraph 4 of the complaint, the cheque is deemed to have been given prior to 7.1.2008, i.e. it was a post-dated cheque.16
15. PW1 has specifically admitted in his cross- examination conducted on 6.9.2009 about the cheque being obtained by him from the accused in the year 2003 towards a separate transaction. This useful admission has been virtually ignored by both the courts. This is a very strong and useful admission elicited from the mouth of PW1 and it probablises that the accused had taken some loan from the complainant in 2003 and the cheque was issued in regard to the same. This admission cannot be considered as a stray sentence since this was the answer given to a specific question put by the counsel for the accused. This is further probablised by another admission elicited from the mouth of PW1 and the English translation of it is as follows:
'I will have to verify the documents to say as to when the accused paid the amount to the company for the last time. I will have to verify and say about the suggestion that the amount was paid for the last time by the accused to the complainant on 10.9.2007. All the cheques issued by the accused in favour of the complainant company both prior to and 17 after the disputed cheque have been encashed. '
16. The number of the cheque marked as Ex.P2 is 143785. The passbook of the accused maintained in State Bank of India, Yeshwanthpur Branch commencing from 16.10.2010 to 4.6.2005 is marked as Ex.D3. The cheque bearing number 143786 for Rs.23,097/- was cleared on o12.6.2003. Cheque bearing no.143787 was cleared on 7.6.2003 for Rs.20,000/-. Likewise, cheque bearing no.143788 was cleared on 17.6.2003 for Rs.35,000/-. Cheque bearing no.143789 for Rs.750/- was cleared on 18.6.2003. As already mentioned, the number of the cheque marked as Ex.P2 is 143785.
17. The defence of the accused is that the cheque was issued in 2003 in favour of the complainant and it appears to be probable in the light of other connected cheques being encashed by the complainant in June 2003 on various dates. Normally a new cheque book will not be obtained unless all the cheques in the earlier 18 cheque book are exhausted. If one were to say that the accused had really issued the cheque in favour of the complainant, he should have retained this particular cheque in the said cheque book and had kept it for more than 4 ½ years. This appears to be highly improbable since a businessman will be issuing cheques often in respect of business transactions.
18. Ex.D3 discloses that a sum of Rs.2.00 lakhs was credited to the account of the accused on the basis of cheque dated 11.6.2003 and this entry is found the passbook produced as Ex.D3. Another cheque bearing no.0069183 dated 12.8.2003 for Rs.2,00,000/- is found to that effect. These two entries dated 11.6.2003 and 12.8.2003 clearly show that the complainant had paid Rs.2.00 lakhs to the account and the same was repaid by the accused by drawing cheque in favour of the complainant and the same was encashed on 12.8.2003 by clearance.
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19. Thus it appears the personal loan had been given by the complainant to the accused through cheque and it was encashed and repaid through cheque only. All the business transactions the accused had with the complainant were by way of cheques only. Similarly the personal loan availed by the accused and the same being repaid is also forthcoming. Therefore the theory of the complainant having paid Rs.2.2 lakhs by way of cash to the accused on 6.11.2007 appears to be highly improbable and in this view of the matter , accused has been able to probablise that he did not have any personal loan transaction with the complainant other than the one of June 2003.
20. PW1 has categorically admitted that the accused was very prompt in repaying the money relating to business transactions and all repayments used to be made by way of cheque. The first personal loan transaction and repayment of the same are evidenced 20 through cheques. The very endorsement given by the complainant to the accused in September 2007 vide Ex.D2 discloses that the amount owed by the accused to the complainant towards purchase of PCBs was only Rs.10,220/-. The case of the complainant is that accused requested him to lend Rs.2.2 lakhs to execute his business orders. All the business transactions that the accused had was with the complainant only. If there was any difficulty relating to business, the accused would have slowed down payment of the balance to the complainant, instead of availing the loan. Ex.D2 also probablises the defence taken by the accused.
21. The trial court as well as the first appellate court have come to the conclusion that the earlier personal loan transaction of Rs.2.00 lakhs was repaid and this transaction evidenced vide Ex.P2 was different. But the accused has been able to probablise that he had no 21 personal loan transaction other than the one of the year 2003. This is further supported by the pen with which the date on Ex.P2 is written. If really Ex.P2 was made or drawn on 7.1.2008, the date would not have been written in a different pen. In fact, PW-1 himself has admitted that the writing found in the cheque differs with the ink of the pen with which the date is written. These are surrounding circumstances and they have been virtually ignored by the trial court.
22. The inability of the accused in probablising that the cheque-Ex.P2 was stealthily taken away by the complainant is blown out of proportion to hold that he has failed to substantiate the defence taken up by him. On the other hand, the accused has been able to probablise that there was no debtor-creditor relationship as on 7.1.2008 or immediately prior to it, or after the said date. Thus the trial court and the first appellate court have adopted a wrong approach to the 22 real state of affairs and have not tested the evidence on the touchstone of preponderance of probabilities. In fact the explanation given by the accused is not just a plausible explanation; but supported by proof stepped into the witness box.
23. As per the facts found in the case of HITEN DALAL (supra), the appellant did not enter the witness box to support his case to probablise that the four cheques had been given in respect of any arrangement or any transaction which did not materialize. It was a case where the accused was unable to substantiate the documents produced in the custody of CBI. None of the witnesses had deposed as to why the appellant therein had executed and delivered the cheques to the bank or why the appellant had given four cheques to discharge the debt to the bank, nor any defence witness claimed that there was any transaction. In fact, DW1 in his cross-examination has admitted that it was not the 23 practice of the purchasing party to hand over cheques in advance. The appellant alone had explained as to why he had handed over 4 cheques to the bank. Therefore the facts of DALAL's case are distinguishable from the facts of this case and hence, the said decision is not applicable to this case. Suffice to state that the material documents and material evidence placed on record by the accused have been virtually ignored by the trial court as well as the first appellate court.
24. The rebuttable presumption available under Sections 118(a) and 139 of the Act have been effectively rebutted by the accused. In this view of the matter, the above formulated point will have to be answered in the affirmative. Consequently the revision petition will have to be allowed and the judgment of conviction and imposition of fine will have to be set aside.
25. In the result, the following order is passed: 24
ORDER The revision petition is allowed. The judgment of conviction dated 31.1.2011 passed in C.c.11677/08 by the XVI Additional CMM Court, Bengaluru, and affirmed in Crl.A.621/11 are set aside. Consequently the accused is acquitted of all the offences leveled against him, by dismissing the complaint filed under Section 138 of the Negotiable Instruments Act.
Sd/-
JUDGE vgh*