Karnataka High Court
K Venkatesh Reddy vs K Srinivasan on 6 January, 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF JANUARY, 2023
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.1260 OF 2011
BETWEEN:
K VENKATESH REDDY
S/O M KRISHNA REDDY
AGED ABOUT 39 YEARS
R/AT NO.32, NEAR
SRI RAMA TEMPLE
NEW THIPPASANDRA
BANGALORE - 560 074
...COMPLAINANT / APPELLANT
(BY SRI. LOKESH L N, ADVOCATE FOR
SRI. B.PRAMOD, ADVOCATE)
AND:
K SRINIVASAN
S/O KRISHNAPPA
AGED ABOUT 35 YEARS
R/AT NO.14/11A,
2ND CROSS, PRAKASH NAGAR,
HOSUR TOWN - 635 109
KRISHNAGIRI DIST
TAMIL NADU
...ACCUSED / RESPONDENT
(BY SRI. NAVEEN KUMAR B, ADVOCATE &
SRI. P.M.NATARAJ, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378
(4) OF THE CODE OF CRIMINAL PROCEDURE PRAYING TO i)
ALLOW THE ABOVE APPEAL, SET ASIDE THE IMPUGNED
JUDGMENT DATED 18.11.2011 PASSED BY THE LEARNED
PRESIDING OFFICER, FAST TACK COURT-III AND
ADDITIONAL SESSIONS JUDGE, MAYO HALL UNIT,
2 Crl.A.No.1260/2011
BANGALORE IN CRL.A.NO. 25148/2010 AND CONSEQUENTLY
RESTORE THE JUDGMENT OF CONVICTION AND SENTENCE
PASSED BY THE LEARNED V ADDITIONAL JUDGE, COURT OF
SMALL CAUSES AND 24TH ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL UNIT, BANGALORE IN
C.C.NO.31974/2008 DATED 19.10.2010; AND ii) GRANT ANY
OTHER RELIEF OR RELIEFS AS THIS HON'BLE COURT MAY
DEEM FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE
INCLUDING COSTS/ COMPENSATION IN THE INTEREST OF
JUSTICE AND EQUITY.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED ON 25.11.2022, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
JUDGMENT
In this appeal, complainant has challenged the judgment and order of the Sessions Court, by which it has set aside the conviction and sentence of respondent/accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the N.I. Act' for short) passed by the trial Court.
2. For the sake of convenience the parties are referred to by their rank before the trial Court.
3. Complainant filed C.C.No.31974/2008 under Section 200 of Cr.P.C. for the offence punishable under Section 138 of the N.I. Act, alleging that he entered into a 3 Crl.A.No.1260/2011 registered lease agreement dated 21.06.2006 in respect of factory unit situated in Sy.No.714/2A measuring 1.82 acres out of total extent of land measuring 4.5 acres, together with stone crushing machine and other related machines and spares. He entered into said agreement based on the representation by the accused that he is having license to run the factory. It was for a period of two years which could be extended. Pursuant to the said agreement, he made security deposit of Rs.5,00,000/- and agreed to pay rent at the rate of Rs.50,000/- p.m. He also paid Rs.15,00,000/- to the labour contractor for providing labour for one year.
3.1 It is further case of the complainant that the factory was seized by the Mines and Geology Authority, Tamil Nadu on the ground that accused is not possessing a valid license to run the factory. On account of the same, complainant incurred huge loss. Subsequently, the aforementioned lease deed came to be cancelled.
3.2 Complainant demanded accused to compensate him for the loss suffered. The negotiations took place in the presence of Sri. S.M. Ramesh, who acted as a mediator. During the said negotiation, accused agreed to pay a sum 4 Crl.A.No.1260/2011 of Rs.3.5 lakhs towards the loss suffered by the complainant and issued a post dated cheque No.205151 dated 05.01.2008 and assured that it would be honoured on presentation. Though at the request of accused, complainant presented the cheque for encashment on 01.02.2008, 08.03.2008 and 25.04.2008, on all the three occasion, it was returned dishonoured on the ground of insufficient funds.
3.3. Therefore, complainant got issued a statutory notice dated 07.05.2008 calling upon the accused to pay the amount due under the cheque. Though it is duly served, accused has purposely not received the one sent through RPAD. However, the one sent under Certificate of Posting is served on him. But accused has not sent any reply. Complainant also issued a legal notice to Sri.S.M.Ramesh, who was the mediator intimating him about the dishonour of cheque and requested him to use his good office to get the payment made. Sri.S.M.Ramesh has sent reply stating that he has met the accused and he has assured to arrange for the funds. Inspite of lapse of statutory period, accused has not made any arrangement 5 Crl.A.No.1260/2011 to make payment of the amount due under the cheque and hence, the complaint.
4. After due service of summons, accused has appeared and contested the matter.
5. He pleaded not guilty and claimed trial.
6. In order to prove the allegations against the accused, complainant got himself examined as PW-1. He has relied upon Ex.P1 to 11.
7. During the course of his statement under Section 313 Cr.P.C., accused has denied the incriminating evidence.
8. He has not stepped into the witness box. However, during the cross-examination of PW-1, he has got marked Exs.D1 and 2.
9. Vide the judgment and order dated 19.10.2010, the trial Court convicted the accused and sentenced him to undergo simple imprisonment for a period of six months and pay fine of Rs.4,00,000/-, and out of the compensation amount, Rs.3,90,000/- be paid to the complainant by way of compensation.
6 Crl.A.No.1260/2011
10. Accused challenged the same before the Sessions Court in Crl.A.No.25148/2010. Vide Order dated 08.11.2011, the Sessions Court allowed the appeal and acquitted the accused.
11. Being aggrieved by the same, the complainant has come up with this appeal.
12. During the course of arguments, learned counsel for complainant submitted that the reasons assigned by the Sessions Court in setting aside the conviction are unsustainable in law. It has failed to appreciate the admission of accused that the subject cheque is issued by him, but has taken a false defence that it was issued towards security. However, there is no reference to the same in the lease agreement. The perusal of the lease deed indicate that security deposit is shown as Rs.5,00,000/- under Cheque No.010268 dated 01.06.2006. Therefore, the subject cheque is not towards security deposit and as such, the defence taken by the accused is palpably false.
12.1 Learned counsel for the complainant further submitted that the Sessions Court has failed to appreciate 7 Crl.A.No.1260/2011 the fact that complainant has suffered loss on account of accused not holding a valid license and therefore, he has issued the subject cheque to compensate the complainant. Since the issue of cheque and signature by the accused is admitted, presumption under Section 139 of the N.I. Act is in favour of the complainant and burden is on the accused to rebut the said presumption. However, accused has failed to rebut the presumption and as such, he is liable to be convicted.
12.2 He would further submit that since the cheque came to be issued to compensate the loss suffered by the complainant on account of accused, the cheque in question relates to the transaction between the complainant and accused and as such, the Sessions Court has erred in holding that after termination of lease agreement, there was no contractual relationship between the parties and as such, there was no occasion for the accused to issue the cheque at Ex.P2. The impugned judgment and order setting aside a well reasoned judgment of the trial Court is erroneous and prays to allow the appeal and restore the same.
8 Crl.A.No.1260/2011
13. In support of his arguments, the learned counsel for complainant has relied upon M/s Kalamani Tex and Anr. Vs. P. Balasubramanian1 (M/s Kalamani's case).
14. On the other hand, the learned counsel for the accused supported the impugned judgment and order of the Sessions Court and prays to dismiss the appeal.
15. Heard arguments of both sides and perused the record.
16. Since the accused has not disputed that Ex.P2 cheque belongs to him and it bears his signature and it is drawn on the account maintained by him with his Banker, the presumption under Sections 118 and 139 of the N.I.Act is in favour of the complainant and burden is on the accused to prove the circumstances in which the said cheque came to be issued and thereby it is not issued towards repayment of any debt or liability.
17. Before going to the merits of the case, let me note the undisputed facts. The fact that complainant and accused have entered into a registered lease agreement 1 (2021) 5 SCC 283 9 Crl.A.No.1260/2011 dated 21.06.2006 for a period of two years and it came to be terminated by surrender of lease document dated 26.06.2007 is not in dispute. Though the complainant during the course of the complaint has pleaded that the said factory came to be seized by the Government Authorities on the ground that the accused did not possess a valid license to run the factory and therefore, complainant sustained huge loss, during his cross examination, he has admitted that in respect of surrender of the lease, Ex.D-1 came to be executed and in the said document, it is stated that lessee i.e., complainant is not interested in continuing the lease.
18. In other words, the lease is not surrendered on account of failure of the complainant to secure license but since complainant was not interested in continuing the lease. If at all the complainant could not continue with the lease on account of non obtaining of license, there was no impediment to state the same in Ex.D-1. Thus, at the earliest available opportunity while executing the surrender of lease document at Ex.D-1, there was no impediment for the complainant to state the said reason. However, Ex.D-1 10 Crl.A.No.1260/2011 makes it clear that the said lease is surrendered by the complainant as he was not interested in continuing the same. As rightly pointed out during the course of appeal memo, the accused has issued a cheque for Rs.5,00,000/- towards security deposit bearing No.010268 dated 01.06.2006 and it is not the subject cheque. Therefore, the contention of the accused that Ex.P2 cheque was issued by way of security and since it was blank, complainant has misused the same, cannot be accepted.
19. However, the complainant is required to prove that subsequent to the surrender of the lease, the complainant and accused have negotiated in the presence of one Sri. S.M. Ramesh and accused issued a post dated cheque for Rs.3.5 Lakhs. During his cross examination, PW- 1 has admitted that during the said negotiation, he and accused have not entered into any written agreement, but only the cheque came to be issued. In the absence of any written document, what the least the complainant could have done was to examine the said Sri.S.M. Ramesh to prove that after admitting that complainant has suffered 11 Crl.A.No.1260/2011 loss, accused agreed to pay a sum of Rs.3.5 lakhs towards compensation and accordingly, issued the subject cheque.
20. Though the complainant has denied that at the time of redelivering the possession of the premises, he had taken one blank cheque from the accused as security, during his cross examination, he has deposed that he came into custody of the cheque on 05.10.2007. However, he has denied that misusing the blank cheque, he has filed this complaint. As per Ex.D2, which is dated 04.06.2007, which is much earlier to the surrender of lease deed dated 26.06.2007, the complainant has returned Rs.15,00,000/- in the form of two cheques for Rs.5,00,000/- each and cash in the sum of Rs.5,00,000/-. While returning the said amount also, the complainant has not alleged that he has suffered any loss and therefore, he is retaining any sum. As rightly held by the Sessions Court, after execution of Exs.D1 and 2, the relationship between the complainant and accused came to an end. Therefore, if on account of complainant suffering any loss, he and accused have entered into a negotiation by which accused agreed to pay a sum of Rs.3.5 lakhs by way of compensation and this is 12 Crl.A.No.1260/2011 based on oral agreement, then the complainant was required to examine one S.M. Ramesh to prove the same.
21. In the absence of the same, Exs.D-1 and D2 not having such averments, the oral testimony of complainant is not sufficient to discharge the burden. Though the presumption under Section 139 of N.I.Act is acting against the accused, through the cross-examination of PW-1, the accused has proved his defence and discharged the burden placed on him. When the lease came to be surrendered by the complainant on his own and when he has failed to prove that the lease came to be stopped by the Government Officials for not having license, the burden shifts on him to prove that Ex.P2 cheque came to be issued by the accused subsequent to the surrender of the lease and it is towards compensating him. However, the complainant has failed to discharge this burden.
22. The contention raised by the complainant is contrary to the contents of Exs.D1 and 2. Since the trial Court failed to appreciate these aspects and convicted the accused, rightly, the Sessions Court has reversed the same. I find no reason to interfere with the considered judgment 13 Crl.A.No.1260/2011 of the Sessions Court. In the result, the appeal fails and accordingly, the proceed to pass the following:
ORDER
i) Appeal filed by complainant under Section 378(4) of Cr.P.C is hereby dismissed.
ii) The judgment and order dated 18.11.2011 in Crl.A.No.25148/2010 on the file Presiding Officer, Fast Tract Court-III & Addl.Sessions Judge, Bengaluru setting aside the conviction of the accused in C.C.No.31974/2008 dated 19.10.2010 on the file V Addl.Judge, Court of Small Causes & 24th ACMM, Bengaluru is confirmed.
iii) Registry is directed to return the trial Court and Sessions Court records along with copy of this judgment forthwith.
Sd/-
JUDGE MDS