Telangana High Court
Smt.V.Vanaja vs Mr.N.Srinivas on 29 November, 2022
Author: N.Tukaramji
Bench: N. Tukaramji
THE HONOURABLE SRI JUSTICE N. TUKARAMJI
CRIMINAL APPEAL No.1695 OF 2018
JUDGMENT:
Heard Sri K. Rama Subba Rao, learned counsel for the appellant, Sri P. Shravan Kumar, learned counsel for the 1st respondent and learned Assistant Public Prosecutor for the 2nd respondent.
2. This appeal under Section 378(4) of Code of Criminal Procedure, 1973 (for short 'the CrPC') has been preferred by the complainant against the judgment of acquittal dated 19.03.2018 in C.C.No.63 of 2017 passed by the VIII Special Magistrate, L.B. Nagar, Hasthinapur, Ranga Reddy District for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the NI Act').
3. For the facility, the parties are referred to as per their array before the trial Court.
4. The complainant's case in brief is that on 25.03.2016 the accused borrowed an amount of 9,00,000/- with an undertaking to repay the same within three months and executed a promissory note/Ex.P-3 in the presence of P. Narender and B. Srinivas/PWs.2 2 NTR,J Crla_1695_2018 and 3; later as there was no repayment on demands, the accused issued cheque/Ex.P-1 dated 24.08.2016 bearing No.675077 drawn on State Bank of Hyderabad, Secunderabad Branch for Rs. 9,00,000/-. On presentment the cheque Ex-P1 was returned with memo/Ex.P-2 dated 30.08.2016 with an endorsement 'payment stopped by drawer'. Thereupon, statutory notice/Ex.P-4 dated 10.09.2016 was issued calling upon to clear the cheque amount through registered postal receipt/Ex.P-5 and served on the accused as per the track report/Ex.P-6. The accused got issued reply notice/Ex.P-7 dated 28.09.2016 with false averments. Thus the complaint.
5. During enquiry, the complainant got herself examined as P.W.1 and the witnesses of the promissory note as PWs.2 and 3 and got marked Exs.P1 to P12. Per contra, no oral or defence evidence was adduced. However, got marked Ex.D-1 photostat copy of pronote- cum-receipt executed by the accused on 15.06.2014 in favour of one P. Srinivas for Rs.8 lakhs.
6. The learned trial Court after considering the materials on record and accepting the defence held that the complainant had failed to 3 NTR,J Crla_1695_2018 prove the guilt of the accused beyond reasonable doubt. Hence acquitted the accused.
7. In appeal, the learned counsel for the complainant contended that the trial Court erred in discrediting the wedding card/Ex-P8 and the Photograph/Exs:P-9 evidencing the prior acquaintance with the accused. Further the trial Court had given undue weightage to the defence alleged transaction with her brother in the year 2014 and erred in observing that lending amount pending the civil suit between them is unnatural to the human conduct, without considering the positive evidence placed on record. Further the trial Court had gone wrong in opining on writings on the cheque and the burden to prove the financial resources to advance amounts, even without the rebuttal of presumptions by the accused.
8. In support of the pleas, the complainant placed following citations of the Hon'ble Supreme Court for consideration:
(i) Goaplast (P) Ltd. v. Chico Ursula D'Souza and another1, (ii) Kalamani Tex and another v. P. Balasubramanian2, (iii) Rohitbhai Jivanlal Patel v. State 1 (2003) 3 SCC 232 2 (2021) 5 SCC 283 4 NTR,J Crla_1695_2018 of Gujarat3, (iv) T. Vasanthakumar v. Vijayakumari4, (v) Oriental Bank of Commerce v. Prabodh Kumar Tewari 5, (vi) Bir Singh v. Mukesh Kumar)6.
9. In the above authorities, the following aspects are projected i.e.
(a) though the transaction is disputed if the signature on the cheque is established, presumption shall be in favour of the complainant and the instruction to 'stop payment' would also entails the liability; (b) even the instruction of 'stop payment' entails the liability for dishonour of cheque; (c) when a blank cheque leaf voluntarily signed and handed over to the accused towards some payment and filled in by any person would also attract the presumption and liability; (d) unless the accused discharges the onus to rebut the presumption, the source of funds advancing loan amounts would not lie for scrutiny.
10. On the other hand, the learned counsel for the accused supported the impugned judgment of acquittal and pleaded that the trial Court had rightly considered the accused's acquaintance with the complainant and misuse of the blank pronote and cheques issued in another transaction and the improbability of lending amounts while 3 (2019) 18 SCC 106 4 (2015) 8 SCC 378) 5 2022 Lawsuit (SC) 1011 6 2019 (4) SCC 197 5 NTR,J Crla_1695_2018 the civil litigation of her brother is pending for recovery of amount against the accused and the complainant's financial ability to lend such amount in acquitting the accused.
11. In support, the learned counsel relied on the following authorities:
(i) M.S. Narayana Menon Alias Mani v. State of Kerala and another7, (ii) G. Vasu v. Syed Yaseen Sifuddin Quadri8, (iii) Hiten P. Dalal v. Bratindranath Banerjee9, (iv) Basalingappa v. Mudibasappa10 and pleaded that, in considering the effect of presumption, the presumption of law shall be distinguished from the presumption of fact.
12. In these rival claims, the points arise for determination are:
(a) Whether the complainant is able to establish the guilt of the accused under Section 138 of the NI Act beyond reasonable doubt ?
(b) Whether the impugned judgment of acquittal is sustainable in fact and law?
13. The complainant as P.W.1 testified assertively that the accused borrowed an amount of Rs.9 lakhs under Ex:P-3/pronote in the 7 (2006) 6 SCC 39 8 AIR 1987 AP 139 9 (2001) 6 SCC 16) 10 (2019) 5 SCC 418 6 NTR,J Crla_1695_2018 presence of PWs.2 and 3 and to discharge the liability issued Ex.P- 1/cheque on 24.08.2016. In the cross examination of PW-1 the accused has suggested that the blank cheques and blank signed pronote were issued by the accused in another loan transaction of Rs.8 lakhs. Thus, impliedly the accused had admitted the facts that the cheque was drawn on his account and it contains his signature. The presentment and return of the cheque unpaid with an endorsement 'stop payment' is not in dispute. The legal notice/Ex.P- 4, the postal receipt and track report/Exs:P-5 and P-6 are being established by reply notice/Ex:P-7. Further, the reply notice/Ex.P-7 itself establishing proper service. These aspects are prima facie establishing the ingredients of Section 138 of the NI Act, the presumptions under Sections 118(a) and 139 of the NI Act shall flow in favour of the complainant.
14. The Hon'ble Apex Court in the authorities of Rangappa Vs. Sri Mohan11, Basalingappa vs Mudibasappa12 and Triyambak S.Hegde Vs. Sripad13, fortified that if the signature on the cheque is admitted, the presumption shall be raised that the cheque was issued in discharge of 11 AIR 2010 SC 1898 12 (2019) 5 SCC 418 13 (2022) 1 SCC 742 7 NTR,J Crla_1695_2018 debt or liability. However, the presumption is rebuttable and the onus would be on the accused to raise the probable defence and standard of proof is that of preponderance of probabilities. The inference can be raised not only from the materials brought on to the record by the parties but also by reference to the circumstances upon which they rely.
15. To rebut the presumption, the accused has raised the following aspects and circumstances to discharge his burden:
a) There is no acquaintance with the complainant.
b) He borrowed an amount of Rs.8 lakhs from one P. Srinivas, the brother of the complainant and in that transaction blank cheques and promissory notes were obtained and such blank cheque was misused by the complainant.
c) The PW-3 who is witness for the Ex.D-1 and the alleged pronote/Ex.P-3 transaction is the brother of complainant who is aware of the earlier loan transaction and pendency of the suit for recovery of money by their brother, hence, he would not advice to lend huge amount by his sister which is clear improbability.
8 NTR,J Crla_1695_2018
d) Even as per the evidence of PW-1 the monthly income is at Rs.10,000/-. Hence, she has no financial capacity to lend such amounts.
16. The prime defence of the accused is that the signed cheque and pronote of the other transaction was pressed into service by the complainant. The earliest statement of the accused in this regard is in his reply notice dated 28.09.2016/Ex.P-7. In para 3, it is specifically pleaded that the accused had taken hand loan of Rs.8 lakhs from B.Srinivas son of Pochaiah and while taking hand loan P. Srinivas has taken blank cheques, promissory note, signature on blank papers and original property documents of Flat No.1, Ambika Apartments, Street No.10, East Maredpally, Secunderabad as security and he repaid the loan amount and requested P. Srinivas to return the original cheques, promissory notes and title deeds, even issued notice on 19.07.2016 to return those documents. But instead of returning those documents, P. Srinivas abused the cheques and promissory notes and the subject cheque is one of them.
17. However, in the cross examination of PW-1 it was suggested that Srinivas who the witness to the pronote borrowed Rs.8 lakhs 9 NTR,J Crla_1695_2018 from her (the complainant's) younger brother P. Srinivas for which her younger brother obtained signed blank cheques and pronotes from the accused along with title deeds of his property and that one of signed blank cheques her younger brother Srinivas and Narender got filed the present complaint through her.
18. Thus, the stance of the accused in the reply notice that he had borrowed the amount and in the cross examination that the witness of the pronote had borrowed the amount but the negotiable instruments and its title deeds of flat were obtained from him, are in contradiction.
19. Further the reply notice is indicating the entire repayment and on the other hand, it is submitted that the suit for recovery is filed by P.Srinivas brother of the complainant. To note, no particulars are even pleaded as regards to the negotiable instruments issued and the claimed repayment. Be that as it may, if the amounts were repaid, in ordinary prudence taking at least a receipt can be expected, more particularly, when the negotiable instruments were got executed while lending the amounts. Though, asserted that a notice dated 19.07.2016 was issued for return of the documents, for the reasons best known, 10 NTR,J Crla_1695_2018 no copy of such document is placed on record. That apart, the loan transaction between the accused and P.Srinivas brother of the complainant elicited in the cross examination, cannot be conclusive proof of issuance of blank cheques and pronotes were issued in the accused claimed transaction. The admission of the PW-3 about receipt of letter does not prove the receipt of legal notice by P. Srinivas for returning of the negotiable instruments. Above all, there is no explanation for the silence after repayment and prior and subsequent to the pleaded legal notice.
20. With regard to acquaintance, the complainant had placed Exs:P-7, P-8 to P-12 wedding card and photographs to show the presence of the accused in the family events and the brother of PW-3. That apart, PWs.2 and 3 who are witnesses to the complainant affirmed transaction and categorically deposed about the presence during the complainant advancing loan. The transaction being the foundational factor which is substantiated by the evidence, the contention that there is no prior acquaintance is of no significance.
21. It is pertinent to mention that, the contest of the accused that the PW-3 is aware of the pending Civil Suit against him for recovery, 11 NTR,J Crla_1695_2018 therefore, he should not have advised his sister/complainant, this anomaly is pointing the improbability is failing for the reason that, the fact of knowledge of the PW-1 about her brother advancing the loan and the suit filed by him for recovery was not raised during her/ PW-1's cross-examination. Likewise, it is not made out from the PW- 3 that he had informed about their brother's loan, and pendency of suit for recovery of amount to the complainant/PW-1. In the absence of such knowledge, lending of amount by the complainant as PW-1 cannot be viewed with suspicion. To note, even after knowledge if the creditor may willingly lend the amount and there is no legal bar. In addition, to substantiate the plea of the loan transaction, the complainant has placed the promissory note and also oral evidence of PWs.2 and 3.
22. The cumulative reading of these aspects is leading to irresistible conclusion that the defence raised is failing on probabilities.
23. Therefore, the onus will not revert to the complainant so as to prove the financial capacity and source of funds. This aspect has been dealt by the Hon'ble Apex Court in Rohit bhai J Patel Vs. State of 12 NTR,J Crla_1695_2018 Gujarat14 wherein, it was held that as the presumption of legally enforceable debt is presumed in favour of the complainant unless the same is rebutted, the complainant need not present documentary evidence in the form of receipt or accounts for wanting evidence with regard to source of funds.
24. Therefore, it shall be held that the complainant had established all necessary ingredients to constitute an offence under Section 138 of the NI Act against the accused, however as the trial Court erred in properly considering the facts and law in arriving at conclusions, the impugned judgment is liable to be set aside.
25. In the result, the appeal is allowed. The judgment of acquittal dated 19.03.2018 under Section 138 of the NI Act in C.C.No.63 of 2017 passed by the VIII Special Magistrate, L.B. Nagar, Hasthinapur, Ranga Reddy District is set aside and the accused is found guilty of offence punishable under Section 138 of the NI Act.
26. In regard to the sentence, considering the nature of transaction instead of imposing substantive sentence, directing to pay fine and on realization to pay compensation to the complainant to the extent of the cheque amount is found reasonable.
14 (2019) 18 SCC 106 13 NTR,J Crla_1695_2018
27. Resultantly, the accused is sentenced to pay fine of Rs.9.10 lakhs (Rupees nine lakhs ten thousand only), in default to undergo simple imprisonment for a period of one year. On realization of the fine amount, Rs. 9,00,000/- (Rupees nine lakhs only) shall be paid to the complainant. The accused shall pay the fine amount within two months from the date of receipt of a copy of this judgment, failing which, he shall surrender before the trial Court and the trial Court shall take necessary steps for execution of sentence in accordance with law.
Consequently, miscellaneous petitions, if any, pending in this appeal shall stand closed.
________________ N.TUKARAMJI,J Date:29.11.2022 ccm