Karnataka High Court
Amaresh S/O Adappa Kadabur vs Shivakumar S/O Jevendra on 30 November, 2022
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IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 30TH DAY OF NOVEMBER, 2022
BEFORE
THE HON'BLE MR.JUSTICE ANIL B. KATTI
CRIMINAL APPEAL NO.200112/2019
Between:
Amaresh S/o Adappa Kadabur,
Aged about 43 years,
Occ: Agriculture,
R/o PWD Camp, Near Hegde Farm,
Sidhanur City,
Dist: Raichur.
... Appellant
(By Sri Ananth S. Jahagirdar, Advocate)
And:
Shivakumar S/o Jevendra,
Aged about 43 years, Occ: Business,
R/o Mehaboob Colony,
Sindhanur City, Tq. Sindhaur,
Dist: Raichur-584101.
... Respondent
(By Sri Mahantesh Patil, Advocate)
This Criminal Appeal is filed under Section 378(4)
R/w Sec.372 Proviso of Cr.P.C, praying to set aside the
impugned order and judgment of acquittal sentence dated
07.08.2019 passed by the II Addl. Civil Judge and JMFC, at
Sindhanur in C.C.No.856/2015 acquitting the appellant for
the offences punishable under Section 138 of N.I.Act.
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This appeal having been heard through Physical
Hearing / Video Conference and reserved for Judgment on
28.10.2022, coming on for pronouncement of Judgment
this day, delivered the following:
JUDGMENT
The appellant/complainant is challenging the judgment of acquittal passed by II Additional Civil Judge & JMFC, Sindhanur in C.C.No.856/2015, dated 07.08.2019 for the offence under Section 138 of N.I.Act.
2. The parties to the appeal are referred with their ranks as assigned in the Trial Court for the sake of convenience.
3. The factual matrix leading to the case of complainant can be stated in nutshell to the effect that accused has approached the complainant and requested to give hand loan of `5,00,000/- for his legal necessities. On 02.02.2009 the accused on executing demand promissory note in presence of 3 witnesses has taken loan of `5,00,000/- agreeing to pay interest at 2% per month. The accused in order to discharge the said debt has issued cheque bearing No.128218 dated 02.01.2012 drawn on Canara Bank, Sindhanur Branch for an amount of `8,50,000/- inclusive of interest. The said cheque on presentation through his banker came to be bounced for want of sufficient fund in the account of accused as per bank endorsement dated 04.01.2004. The complainant has issued demand notice dated 17.01.2012 on two addresses of accused. The said notices were returned with endorsement no such addressee and party left on 20.01.2012 and 19.01.2012. The accused has deliberately evaded service of notice on the said address to escape from the legal clutches. The complaint is filed on 31.03.2012.
4. In response to the summons, the accused has appeared through counsel and contested the case. 4 The complainant in order to prove his case relied on the oral evidence of PW1 and the documents as per Ex.P1 to Ex.P7. The accused has not lead any defence evidence. The Trial Court after having heard the arguments of both side and on perusal of oral and documentary evidence has acquitted the accused from the charge leveled against him for the offence under Section 138 of N.I.Act.
5. The appellant/ complainant has challenged the correctness and legality of the said judgment of acquittal contending that the accused has not taken any defence regarding tampering of the cheque, the amount shown in figure and in words matches and there is no doubt about issuance of cheque. The observation and findings of the Trial Court about non compliance of Section 141 of N.I.Act also cannot be legally sustained. The approach and the appreciation of oral and documentary evidence by the Trial Court is 5 contrary to law and evidence on record. Therefore, prayed for allowing the appeal and to convict the accused for the charge leveled against him.
6. In response to the notice of appeal, the respondent has appeared through his counsel.
7. Heard the arguments of both sides.
8. The appellant/complainant in support of his oral evidence about issuance of cheque by accused for legally enforceable debt has relied on the cheque as per Ex.P1 dated 02.01.2012 drawn on Canara Bank for `8,50,000/- which is inclusive of interest as on the said date. The complainant has presented the said cheque for collection through his banker on 02.01.2012 as per Ex.P2. The same was bounced for want of sufficient funds in the account of accused vide bank endorsement as per Ex.P3. The complainant has issued demand notice as per Ex.P4 on both the 6 addresses of the accused. The same was returned with endorsement no such addressee and party left on 20.01.2012 and 19.01.2012. The accused has evaded service of notice on the said address to escape from the legal clutches. The accused has not paid the amount covered under the cheque as per Ex.P1 on demand and therefore the complaint is filed on 31.03.2012.
9. The first contention of accused is that demand notice is not served on him. The complainant has issued demand notice on the house address and place of business of accused. The notice sent to the house address as per Ex.P5 and Ex.P5(a) returned unserved with an endorsement 'no such addressee'. The notice sent to the place of business as per Ex.P6 and Ex.P6(a) returned with endorsement as 'party left'. The house address shown in the notice as per Ex.P5(a) and the envelope containing the said notice 7 as per Ex.P5 is on the same address of accused where he was residing with the one shown in the complaint. The accused has not denied that he is not residing in the given address of the cause title of complaint and also the one appearing on the envelope as per Ex.P5. The summons in this case is also served to the accused on the given address in the complaint. The same is evident from the report of Sindhanur PS who has served the summons to the accused. Therefore, under these circumstances it will have to be held that the accused has knowledge about the contents of the notice and has deliberately refused to receive the same. Therefore, the Trial Court for the reasons recorded in para No.22 and 23 of its judgment was justified in recording the finding that the demand notice is deemed to be served on the accused in the absence of rebuttal evidence of 8 accused to show that postal shara was incorrect and he is not residing in the given address.
10. The Trial Court for the reasons recorded in para 14 to 17 has observed and held that the cheque in question as per Ex.P1 is tampered and there is material alteration in writing the amount in the words. Therefore, the presumption under Section 139 of N.I.Act stands rebutted. In support of such finding, the Trial Court has relied on the decision of Coordinate Bench of this Court in Criminal Appeal No.84/2010, Lalit B Jain Vs. Narendra Kumar, dated 12.12.2012, wherein, it is observed and held that earlier cheque was dated 10.12.2005 and the number '5' has been corrected by altering it as '6'. There is a signature below the correction. As could be seen from the signature below the correction and the same signature on the cheque of proprietor of the concern, there is material difference which can be 9 notice with bare eye. This dis-similarities in the signature is not disputed in the court well. This is a material alteration of the cheque and on the basis of this material alteration, the Trial Court has held that the presumption cannot be raised under Section 139 of N.I.Act or even it is raised, it stands rebutted. The said factual aspects of the matter are not the one involved in the present case.
11. The Trial Court in view of Section 18 of N.I.Act and the material alteration found the writings in word showing the amount as material alternation. The learned counsel for the appellant/complainant has argued that the bank has not rejected or dishonored the cheque on account of alleged material alteration. The bank memo dated 04.01.2012 as per Ex.P3 would go to show that there is specific reason for return of cheque at serial No.12 - "Alterations require drawer's authentication". The cheque as per Ex.P1 in figures, it 10 is shown as `8,50,000/-. However, while writing in words "Fifty" the first and third word are over written. The said first and third word while writing the words "Fifty" will not change the entire complex of the cheque drawn in favour of the complainant. It is pertinent to note that the bank has not returned the cheque for any material alteration in the cheque as per Ex.P1 which requires authentication as per Serial No.12 in Ex.P3. The amount shown and the words written in the cheque as per Ex.P1 are one and the same. The over writing in the first and third letter while writing the word "Fifty" has not materially changed the nature or complex of the cheque. Therefore, the Trial Court on the basis of said alleged material alteration was not justified in holding that presumption under Section 139 of N.I.Act stood rebutted.
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12. It is the specific case of the complainant that the accused has availed loan of `5,00,000/- on 02.02.2009 agreeing to pay interest at the rate of 2% per annum by executing the demand promissory note as per Ex.P7 in presence of the witnesses. The accused in discharge of the said debt has issued the cheque bearing No.128218 dated 02.01.2012 drawn on Canara Bank, Sindhanur Branch for `8,50,000/- which is inclusive of interest as on the said date. If the promissory note said to have been executed as per Ex.P7 is taken into consideration and appreciated with the above referred specific case of complainant then it is evident that the accused has taken loan of `5,00,000/- by executing promissory note. The cheque in question as per Ex.P1 is issued by the accused as a proprietor "For Indian Diesel Works".
13. The Trial Court has observed and held that complainant has not made proprietorship concern of 12 accused which has issued as per Ex.P1 as party to the complaint. In terms of Section 141 of N.I.Act, it is mandatory to implead the company as one of the accused. The Trial Court has relied on the decision of Apex Court in Criminal Appeal No.360-377/2011, Harshendra Kumar D vs. Rebtilata Koley Etc., wherein it has been observed and held that there must be necessary averment in the complaint in terms of Section 141 of N.I.Act to make the proprietorship concern on whose behalf cheque is issued as per Ex.P1 is for the lawful discharge of debt with reference to the said concern. Whether the above said finding recorded by the Trial Court can be legally sustained or not is to be decided.
14. It is not the case of the complainant that proprietorship concern of the accused has availed the loan nor the accused has made out any ground to hold that the transaction was between the proprietorship 13 concern of the accused and the complainant leading to issuance of cheque as per Ex.P1. The provisions of Rule 4 of Order XXX have no application to such a suit as by virtue of Order XXX, Rule 10 the other provisions of Order XXX are applicable to a suit against the propitiator of proprietary business insofar as the nature of such case permits. This means that only those provisions Order XXX can be made applicable to proprietary concern which can be so made applicable keeping in view the nature of the case. When the proprietorship of accused concern has no any transaction with the complainant there is no question of proprietorship of accused being impleaded as party to the present proceedings. The question is as to whether proprietorship concern falls within the ambit of Section 141 of N.I.Act is to be looked into. The Hon'ble Supreme Court had an occasion to distinguish partnership concern and the proprietorship 14 1 concern in the decision reported in Raghu Lakshminarayanan vs. M/s. Fine Tubes, wherein, at para No.9 has observed and held that:
"A proprietary concern, however stands absolutely for a different footing. A person may carry on business in the name of a business concern, but he being proprietor thereof, would be solely responsible for conduct of its affairs. A proprietary concern is not a Company. Company in terms of the explanation appended to Section 141 of Negotiable Instruments Act, means any body-corporate and includes a firm or other association of individuals. Director has been defined to mean in relation to a firm, a partner in the firm. Thus, whereas in relation to a Company, incorporated and registered under the Companies Act, 1956 or any other statute, a person as a Director must come within the purview of the said 1 AIR 2007 Supreme Court Page No.1634 15 description, so far as a firm is concerned, the same would carry the same meaning as contained in the Indian Partnership Act."
(Emphasis supplied) In view of the principles enunciated in this decision, the finding of the Trial Court that the proprietorship concern of the accused falls within the meaning of company in terms of Section 141 of N.I.Act on the basis of the explanation offered to the said proviso cannot be legally sustained.
15. The decisions relied by the Trial Court as referred in its judgment are related to the requirement of necessary pleading when a case falls within the ambit of Section 141 of N.I.Act. The same cannot be made applicable to the proprietorship concern, as it is held to be does not fall in the category of Company to the explanation offered to Section 141 of N.I.Act. The finding of the Trial Court 16 that in view of material alteration of cheque and non compliance of Section 141 of N.I.Act, the presumption under Section 118 and 139 of N.I.Act stood rebutted cannot be legally sustained. Therefore, when the defence of the accused regarding alleged material alteration in the cheque and the non compliance of Section 141 of N.I.Act are found to be legally not sustainable then it will have to be held that the accused has failed to place rebuttal evidence to dispel the presumption available in favour of the complainant in terms of Section 118 and 139 of N.I.Act.
16. It is true that the cheque in question as per Ex.P1 is issued by the cheque of his proprietorship concern. When the case of complainant is based on promissory note as per Ex.P7 and to discharge the said debt with interest, the accused has issued the cheque in question as per Ex.P1, the complainant has no any concern as to whether the cheque issued by 17 the accused was from his individual account or the account of the proprietorship concern. It is for the accused to offer valid explanation that issuance of cheque as per Ex.P1 is not related to the transaction claimed by the complainant, but the same was issued for the transaction of the proprietorship concern. The accused has not lead any evidence to prove any other transaction than the one claimed by the complainant.
17. The complainant has discharged his initial burden of proving the fact that the cheque in question was issued for lawful discharge of debt, the failure of the accused to place rebuttal evidence or the defence being found to be not legally sustainable in law then it will have to be held that the complainant has proved the charge leveled against the accused for the offence under section 138 of N.I.Act. The contrary finding recorded by the trial court on the basis of material evidence on record cannot be legally sustained. 18
18. The question now remains is imposition of sentence for proved offence under Section 138 of N.I.Act. Looking to the facts and circumstances of the case, if the accused is sentenced to pay fine of `8,50,000/- and in default of payment of fine shall undergo imprisonment for six months is imposed would meet the ends of justice. Consequently, proceed to pass the following:
ORDER The appeal filed by the appellant/complainant is hereby allowed.
The judgment of acquittal passed by II Additional Civil Judge & JMFC, Sindhanur in CC No.856/2015 dated 07.08.2019 is hereby set aside.
The accused is convicted for the offence under Section 138 of N.I.Act and sentenced to pay a fine of `.8,50,000/- in default of payment of fine shall undergo imprisonment for six months.19
The Registry is directed to send the copy of judgment and the Trial Court Records to the Trial Court.
Sd/-
JUDGE SMP