Telangana High Court
Surapaneni Srinivas, Krishna Dt., vs Yata Sathi Reddy, Nalgonda Anr., Rep ... on 28 September, 2022
Author: Juvvadi Sridevi
Bench: Juvvadi Sridevi
THE HON'BLE SMT. JUSTICE JUVVADI SRIDEVI
CRIMINAL REVISION CASE No.246 of 2015
ORDER:
This Criminal Revision Case, under Sections 397 and 401 of Cr.P.C., is filed by the petitioner/accused, challenging the judgment, dated 28.01.2015, passed in Criminal Appeal No.29 of 2013 by the Judge, Family Court-cum-Additional District and Sessions Judge, Nalgonda, whereby, the judgment, dated 06.02.2013, passed in C.C.No.158 of 2008 by the Judicial Magistrate of First Class (Special Mobile Court) at Nalgonda, convicting the petitioner/accused of the offence under Section 138 of the Negotiable Instruments Act, 1881, (for short, 'the Act') and sentencing him to undergo rigorous imprisonment for a period of one year and to pay compensation of Rs.1,80,000/-, was confirmed.
2. I have heard the submissions of Sri K.B.V.S.Dakshina Murthy, learned counsel for the petitioner/accused, Sri Vijay Kumar Panuganti, learned counsel appearing for Sri Laxman Batchu, learned counsel for the Respondent No.1 and learned Assistant Public Prosecutor appearing for respondent No.2/State. I have perused the record.
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3. The petitioner herein is the accused and the respondent No.1 herein is the complainant. For convenience of discussion, the parties are hereinafter referred to, as per their array before the trial Court.
4. The complainant filed a private complaint under Section 200 of Cr.P.C., before the Court concerned stating the complainant and the accused are well acquainted with each other. The father of the accused was Class-I contractor, who undertook contract to construct BSNL building at Pangal Road, Nalgonda, and the accused was looking after the said contract work. The complainant is the resident of Panagal Village and used to pass from BSNL building and developed acquaintance with the accused. In view of the acquaintance, the accused requested the complainant for hand loan to meet his contract necessities. Accordingly, the complainant got arranged an amount of Rs.90,000/- from his cousin brother Yata Yadagiri Reddy and stood surety to the said amount on 17.12.2004. The accused also requested the complainant for another hand loan of Rs.1,10,000/- promising to repay the same within few months. Accordingly, the complainant advanced an amount of Rs.1,10,000/- on 22.02.2007, to the accused and the accused executed a promissory note on the same day. One Kodadhala Yadagiri stood as surety to the said amount by executing a Jameen Promissory Note. While so, on demand made by the complainant, the accused issued a 3 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 cheque bearing No.2276837, dated 25.09.2007, drawn on Dhanalakshmi Bank, Vijayawada, for an amount of Rs.1,20,000/-, in favour of the complainant, towards part payment of amount covered by promissory note, dated 22.02.2007. On 25.09.2007, when the complainant presented the said cheque for payment through his banker, the same was dishonoured due to "insufficient funds" in the account of the accused. The banker of the accused informed the same through Memo, dated 30.10.2007. Thereafter, the complainant got issued a legal notice to the accused on 15.11.2007, which was served on the accused on 17.11.2007. The accused got issued reply notice, dated 29.11.2007, with false averments, with a dishonest intention to evade payment and accordingly requested to punish the accused under Section 138 and 142 of the Act, Section 420 of IPC and to award compensation under Section 357 of Cr.P.C.
5. The case was taken on file by the Judicial Magistrate of First Class, Nalgonda, for the offence under Section 138 of the Act against the accused and was subsequently transferred to the trial Court, for disposal, in accordance with law.
6. On appearance of the accused, the trial Court examined him under Section 251 of Cr.P.C. The accused denied the accusation of the offence under Section 138 of the Act, stating that the subject 4 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 cheque belongs to him, he did not give it to anybody, and that it was misplaced.
7. To prove the guilt of the appellant/accused, the prosecution examined PWs.1 and 2 and got marked Exs.P1 to P8.
8. When the accused was confronted with the incriminating material appearing against him and was examined under Section 313 of Cr.P.C., he pleaded total denial and claimed to be tried. On behalf of the accused, DW.1-Scientific Expert was examined and and DW.1- Commissioner's report was marked.
9. The trial Court, having considered the submissions made and the material placed on record, found the accused guilty of the offence under Section 138 of the Act and, accordingly, convicted and sentenced him as stated supra. Aggrieved by the same, the accused preferred the subject Criminal Appeal No.29 of 2013 before the Court below and the Court below, on re-appreciation of the evidence on record, dismissed the appeal, confirming the conviction and sentence imposed against the accused by the trial Court. Aggrieved by the same, the accused preferred this Criminal Revision Case.
10. Learned counsel for the petitioner/accused would contend that both the Courts below erred in properly appreciating the evidence on record. The judgments of both the Courts below are based on assumptions and presumptions, which has no relevance to the facts 5 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 and circumstances of the case. There is no legally enforceable debt or liability subsisting between the parties to the litigation as on the date of drawal of the subject cheque, dated 25.09.2007, so as to constitute criminal liability under Section 138 of the Act. Further, the brother of the complainant through whom the complainant got arranged an amount of Rs.90,000/- to the accused was not examined before the Court. In fact, the complainant has no financial capability to advance an amount of Rs.90,000/- to the accused. Further, the accused never gave any blank cheque to the complainant. In fact, the bag belonging to the accused containing signed cheques, promissory notes and other valuable documents was lost and after getting illegal possession of the same, the complainant misused the subject cheque and fraudulently presented the same into the bank for payment. There was no cause of action for filing the subject complaint before the Court under Section 200 of Cr.P.C. Further, the contract between the accused and the BSNL was terminated on 22.06.2004 and hence, the question of borrowing amount by the accused on 17.12.2004 for his contract necessities does not even arise. Further, the presumption under Section 139 of the Act is not available to the complainant, inasmuch as the subject complaint itself is not maintainable by virtue of non-compliance of the statutory notice under Section 138 of the Act. Both the Courts below erroneously convicted the accused of the offence under Section 138 6 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 of the Act. It is a fit case to set aside the conviction and sentence imposed against the accused and acquit him of the offence alleged against him and ultimately prayed to allow the Criminal Revision Case as prayed for.
11. On the other hand, the learned counsel for respondent No.1/complainant supported the impugned judgment and contended that there are no circumstances to interfere with the impugned judgment. The accused borrowed money from the complainant and issued the subject cheque towards discharge of legally enforceable debt. All ingredients of Section 138 of the Act are fulfilled in the present case and hence, the presumption under Section 139 of the Act is in favour of complainant, which has not been successfully rebutted by the accused. Further, in a proceeding under Section 138 of the Act, the complainant is not required to establish the legality or the enforceability of the debt or liability, since he can avail the benefit of presumption under Sections 118 and 139 of the Act. Both the Courts below have properly appreciated the evidence on record and rightly convicted and sentenced the accused of the offence under Section 138 of the Act. There are no circumstances to interfere with the impugned judgment and ultimately prayed for dismiss the Criminal Revision Case.
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12. In view of the above submissions, the point that arises for determination in this Criminal Revision Case is as follows:
"Whether the impugned judgment, dated 28.01.2015, passed in Criminal Appeal No.29 of 2013 by the Judge, Family Court-cum-Additional District and Sessions Judge, Nalgonda, confirming the conviction and sentence passed against the accused of the offence under Section 138 of the Act by the trial Court, is liable to be set aside?"
POINT:
13. The accused had raised various defences before the trial Court, which were turned down by the learned Magistrate. The defences raised by the accused before the lower appellate Court were also turned down by the learned District Judge, confirming his conviction and sentence. Various contentions have been raised on behalf of the accused before this Court also. Before proceeding further, it is apt to discuss the law relating to Negotiable Instruments Act, 1881.
14. Section 101 of Evidence act speaks about 'burden of proof', which is also called as 'onus probandi'. It clearly lays down that whosoever desires any Court to give judgment as to any legal right or law dependent on the existence of facts which he asserts, must prove that those facts exist. Thus, the Evidence Act clearly stipulates that the burden of proving a fact always lies upon the person who 8 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 asserts it. Until such burden is discharged, the other party is not required to be called upon to prove his case. However, Section 139 of the Act is an example of a 'Reverse Onus Clause', which raises an initial presumption, which favours the complainant. Section 139 of the Act reads as follows:
"139.Presumption in favour of holder - It shall be presumed, unless the Contrary is 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, or any debt or other liability.
Further, Section 118 of the Act mandates that until the contrary is proved, it shall be presumed 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. Section 118 of the Act reads as follows:
"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;
(b) xxxx
(c) xxxx
(d) xxxx
(e) xxxx
(f) xxxx
(g) that holder is a holder in due course --that the holder of a negotiable instrument is a holder in due course"
The use of the phrase "unless the contrary is proved" in Section 139 of the Act and the use of the phrase "until the contrary is proved" in Section 118 of the Act read with definitions of "may presume" and 9 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 "shall presume" as provided in Section 4 of the Evidence Act makes it clear that the presumptions to be raised under Sections 118 and 139 of the Act are rebuttable and can be rebutted by the accused, by proving the contrary. However, mere denial of the averments made by the complainant is not enough. The accused has to prove by cogent evidence that there was no debt or liability. Denials and averments in the reply of the accused are not sufficient to shift the burden of proof on the complainant to prove that the cheque had been issued for discharge of a debt or a liability. The accused has to prove at the trial, by leading cogent evidence, that there was no debt or liability. The presumption referred to in Section 139 of the Act is a mandatory presumption and not a general presumption. What is required to be established by the accused in order to rebut the presumption is different from each case, under given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttable evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the Court. To put in a nutshell, the law regarding the offence under Section 138 of the Act is that the presumptions under Sections 118(a) and 139 of the Act have to be compulsorily raised as soon as execution of cheque by accused is admitted or proved by the complainant and, thereafter, burden would 10 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 shift to the accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The general principles can be summarized in the following way.
(i) Onus of proof: Section 139 of the Act states that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 of the Act, for the discharge, in whole or in part, of any debt or other liability. Therefore, the onus shifts upon the accused to prove the nonexistence of legally enforceable debt or other liability. Section 139 of the Act employs the word "shall presume", which means that the presumption under Section 139 is rebuttable.
(ii) Standard of proof: The standard of proof required to rebut the presumption under Section 139 is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence, which creates doubts about the existence of a legally enforceable debt or other liability, the onus shifts back to the complainant, to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability. Here, the presumptions under Sections 118 (a) and will not come to the aid of the complainant.
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(iii) Mode of Proof: The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration, and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should prove the nonexistence of the consideration and debt by leading direct evidence, because the existence of negative evidence is neither possible nor contemplated. At the same time, a "bare denial" of passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon the consideration of which, the Court may either believe that the consideration and debt did not exist, or their non-existence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist.
15. Here, it is also apt to extract Section 138 of the Act, which reads as follows:
138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other 12 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 provisions of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque, or with both."
A plain reading of Section 138 of the Act makes it clear that the essential ingredients to constitute offence under Section 138 of the Act are that (1) The cheque must have been drawn for discharge of existing debt or liability; (2) The cheque must be presented within 3 months or within validity period, whichever is earlier; (3) The cheque must be returned unpaid due to insufficient funds or it exceeds the amount arranged; (4) The fact of dishonour should be informed to the drawer by notice within 30 days; and (5) The drawer of cheque must fail to make payment within 15 days of receipt of the notice.
16. Bearing in mind the above settled principles of law, I would now venture to examine the controversy between the parties to the litigation, to arrive at a conclusion.
17. As stated above, on behalf of the complainant, PWs.1 and 2 were examined and Exs.P1 to P8 were marked. PW.1 is the complainant. PW.2 is the brother of PW.1 and one of the attestors to the Promissory Note, dated 22.02.2007. Ex.P1 is the original Promissory Note, dated 22.02.2007. Ex.P.2 is the cheque bearing No.2276837, dated 25.09.2007. Ex.P3 the Memo dated 30.10.2007 issued by Indian Overseas Bank, Nalgonda. Ex.P4 is the Memo, dated 29.10.2007, issued by Dhanalakshmi Bank, Vijayawada.
13 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 Ex.P5 is the Office copy of the legal notice, dated 15.11.2007. Ex.P6 is the Registered postal receipt, dated 15.11.2007. Ex.P7 is Acknowledgement card, dated 17.11.2007. Ex.P8 is the reply notice, dated 29.11.2007.
18. PW.1 stated in his Evidence Affidavit under Section 145 of Evidence Act that he advanced an amount of Rs.1,10,000/- to the accused on 22.02.2007 and the accused executed a Promissory note for the said amount on the same day agreeing to repay the same with 24% interest per annum on demand or order and that one Kodadhala Yadaiah stood as surety to the said loan transaction by executing a Jameen Promissroy Note. PW.1 was cross-examined at length, wherein, he denied the suggestion he has no capacity to lend money to the accused. PW.1 also denied the suggestion that he got the possession of Ex.P2 cheque illegally and a false case is foisted against the accused. He also denied the suggestion that he has no acquaintance with the accused and his father. PW.2 is the brother of the complainant. In his Evidence Affidavit, he stated that the accused requested the complainant for a hand loan of Rs.1,10,000/- to meet his necessities and that the complainant advanced the said amount to the accused, whereupon, the accused executed a promissory note, dated 22.02.2007, agreeing to repay the same with interest @ 24% per annum and that he and one Yata Srinivas Reddy 14 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 signed as attestors. PW.2 was cross examined at length, wherein, he denied that the accused did not obtain any loan from the complainant and he did not stand as surety to the said transaction. He also denied the suggestion that the accused obtained illegal possession of blank cheque and got filed false case against the accused. Further, the accused has not disputed his signature on Ex.P1-Promissory Note, dated 22.02.2007 and Ex.P2-cheque, daed 25.09.2007. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards discharge of legally enforceable debt, would attract presumption under Section 139 of the Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of legally enforceable debt. In view of the evidence of PWs.1 and 2, the execution of Ex.P1-pronote by the accused cannot be doubted. The accused could not disprove the same by adducing any evidence, much less cogent and convincing evidence.
19. Learned counsel for the petitioner/accused contended that the accused never gave any cheque to the complainant and that the bag belonging to the accused containing signed cheques, promissory 15 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 notes and other valuable documents was lost and after getting illegal possession of the same, the complainant misused the subject cheque and fraudulently presented the same into the bank for payment. It is common knowledge that any prudent man would not keep quiet if his bag containing signed cheques, promissory notes and other valuable documents goes missing. He would immediately lodge a complaint with the police concerned or would take appropriate steps for finding/locating the said documents. In the instant case, no explanation, much less cogent and convincing explanation was forthcoming from the accused as to why he maintained silence about missing of signed cheques and promissory notes, till he received legal notice, dated 15.11.2007 under Ex.P5. The material placed on record reveals that the accused received money from the complainant covered by Ex.P1-Promissory Note, dated 22.02.2007, for his necessities and issued Ex.P2-cheque, dated 25.09.2007, in discharge of the legally enforceable debt; the said cheque was dishonoured due to insufficient funds in the account of the accused; the bank authorities returned the cheque along with Ex.P3-Memo, dated 30.10.2007 under Ex.P3; The complainant got issued legal notice, dated 15.11.2007, under Ex.P5 to the accused, which is well within the statutory period; The accused failed to pay, either the amount covered by Ex.P1-Promissory Note or Ex.P2-cheque, within fifteen days from the receipt of notice under Ex.P5. Therefore, it is 16 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 clear that all the necessary ingredients for constituting offence under Section 138 of the Act are made out against the accused. Further, non-examination of brother of the complainant through whom the complainant allegedly got arranged an amount of Rs.90,000/- to the accused is not fatal to the case of the complainant.
20. Learned counsel for the petitioner-accused also contended that though the subject cheque was for Rs.1,20,000/-, the demand in Ex.P5-legal notice was only for Rs.1,10,000/- and as such, Ex.P5- legal notice is bad in law. Here, it is apt to state that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. It is settled law that the notice has to be read as a whole. As rightly held by the trial Court, in cross-examination of PW.1, he stated that he advanced an amount of Rs.1,10,000/- to the accused. In Paragraph 2 of Ex.P5-notice, it is mentioned that the accused issued cheque for an amount of Rs.1,20,000/- towards part of the legally enforceable debt. In Paragraph 4 of Ex.P5-notice, the accused was called upon to pay the cheque amount of Rs.1,10,000/- and the balance amount. Had the accused paid the amount covered by Ex.P1-Promissory Note along with the agreed interest within fifteen days from the date of receipt of legal notice under Ex.P5, he would have been absolved from the criminal liability under Section 138 of the Act. Having not done so, at this stage, it is not open to him to contend that different amounts were mentioned in Ex.P5-legal 17 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 notice and hence, it is bad in law. The accused failed to bring on record the circumstances to believe that the consideration and debt did not exist, to rebut the presumptions favouring the complainant under Sections 118 and 139 of the Act. All the requirements for establishing the offence under Section 138 of the Act against the accused have been made out. The trial Court, having meticulously analyzed the entire evidence on record in correct perspective, rightly convicted the accused for the offence under Section 138 of the Act. There is no perversity or illegality in the judgment passed by the trial Court in convicting the accused of the offence under Section 138 of the Act. Further, the lower appellate Court, on re-appreciation of the entire evidence on record, rightly confirmed the conviction of the accused for the offence under Section 138 of the Act. Further, it is well established principle of law that Revisional Court will not interfere even if a wrong order is passed by a Court having jurisdiction, in the absence of a jurisdictional error. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record. For the foregoing reasons, I hold that both the Courts below rightly convicted the accused of the offence under Section 138 of IPC.
21. As regards the sentence of imprisonment imposed against the accused is concerned, the primary object and reason of the the Act is 18 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 not merely penal in nature, but to maintain the efficiency and value of a negotiable instrument, by making the accused, honour the negotiable instrument and paying the amount for which the instrument had been executed. The nature of offence under Section 138 of the Act is primarily related to a civil wrong and the Amendment made to the Act in the year 2002 specifically made it compoundable. The object of Section 138 of the Act was described as both punitive as well as compensatory. The intention of the provision was to ensure that the complainant receive the cheque amount by way of compensation. Though the proceedings under Section 138 of the Act could not be treated as civil suit for recovery, the scheme of the provision, providing for punishment with imprisonment or with fine which could extend to twice the amount of the cheque or with both, made the intention of the legislation clear. The complainant could be given not only the cheque amount, but double the amount so as to cover interest and costs. The proceedings under Chapter XVII of the Act are quasi-criminal in nature and that the gravamen of a proceeding under Section 138 of the Act, though couched in language making the act complained of an offence, is really in order to get back through a summary proceeding, the amount covered by the dishonoured cheque, together with interest and costs, expeditiously. In view of the fact that the object of Section 138 of the Act, being primarily 19 Justice Juvvadi Sridevi Crl.R.C.No246 of 2015 compensatory, punitive element being mainly with the object of enforcing the compensatory element, I am of the considered opinion that if the sentence of imprisonment imposed against the accused by both the Courts below is set aside and the accused is directed to pay double the cheque amount, the same would sub-serve the ends of justice.
22. Accordingly, the Criminal Revision Case is allowed in part. While confirming the conviction recorded against the petitioner- accused for the offence under Section 138 of the Negotiable Instruments Act, 1881, the sentence of rigorous imprisonment of one year imposed against the petitioner-accused is set aside. The petitioner-accused is directed to pay Rs.2,40,000/- (Rupees two lakhs forty thousand only), i.e., double the cheque amount, to the complainant, within thirty (30) days from the date of receipt of a copy of this order. If the petitioner-accused fails to pay the said amount within the time stipulated above, he shall undergo imprisonment for a period of six (6) months.
Miscellaneous petitions, if any, pending in this Criminal Revision Case, shall stand closed.
_________________ JUVVADI SRIDEVI, J 28th September, 2022 Ksk