Karnataka High Court
Sri. H G Nagaraja vs Sri. H Suresh Naika on 12 September, 2019
Equivalent citations: AIRONLINE 2019 KAR 1489, 2019 (4) AKR 562, (2019) 4 ALLCRILR 938, 2019 ACD 1145 (KAR)
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF SEPTEMBER, 2019
BEFORE
THE HON'BLE MR.JUSTICE B.A.PATIL
CRIMINAL APPEAL No.301/2018
BETWEEN:
Sri H.G.Nagaraja
S/o late H.S.Gurushanthappa
Aged about 52 years
Occ: Business, R/o 5th Cross,
Ravindra Nagara, Opp. Railway Track,
Vijayanagara, Shivamogga.
...Appellant
(By Sri. Jayaprakash, Advocate for
Sri Showri H.R., Advocate)
AND:
Sri H.Suresh Naika
S/o Hiriyanaika
Aged about 36 years
Occ: Agriculture
R/o Yadavala Grama
Harnahalli Post,
Shivamogga Taluk.
...Respondent
(Respondent served and unrepresented)
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This Criminal Appeal is filed under Section 378(4) of
Cr.P.C praying to set aside the judgment dated 03.01.2018
passed by the III JMFC, Shivamogga in C.C.No.1317/2016
acquitting the respondent/accused for the offence
punishable under Section 138 of Negotiable Instruments
Act.
This Criminal Appeal coming on for Orders, this day
the Court delivered the following:-
JUDGMENT
This appeal has been preferred by the complainant/appellant being aggrieved by the judgment and order of acquittal passed by JMFC-III Court, Shivamogga, in C.C.No.1317/2016 dated 3.1.2018.
Though this case is listed for hearing on IA, with the consent of the learned counsel appearing for the appellant, the same is taken up for final disposal.
Though notice is served to the respondent he has remained absent and there is no representation.
2. The factual matrix of the complaint is that complainant and accused were acquainted with each other since several years. Accused has approached the -3- complainant in the month of March 2015 for financial assistance for household expenses and to discharge his debt. In the month of April 2015 complainant lent Rs.2,00,000/- and another Rs.1,00,000/- in the month of May 2015 and thereafter in the month of June 2015 he has paid another Rs.1,00,000/-, in all Rs.4,00,000/- was given to the accused.
3. In order to discharge the said loan amount, accused issued the cheque bearing No.404009 dated 12.5.2016 drawn on Vijaya Bank, Harnahalli Branch. When the said cheque was presented for encashment on 12.5.2016, it was returned with the shara 'funds insufficient' on 17.5.2016. Complainant got issued the legal notice calling upon the accused to pay the cheque amount within 15 days. The said notice was served to the accused on 10.6.2016, but the accused neither replied nor complied with the terms of the legal notice and as such a private complaint was filed. Thereafter, the learned Magistrate took the cognizance after recording the sworn statement and -4- secured the presence of the accused. Thereafter the plea of the accused was recorded and accused pleaded not guilty, he claims to be tried and as such case was posted for trial.
4. In order to prove the case of the complainant, complainant got himself examined as PW1 and got marked the documents Exs.P1 to P5 and after closure of the evidence on the side of the complainant, the statement of the accused was recorded by putting the incriminating material as against the accused. Accused denied the same and he has neither adduced any evidence nor got marked any documents. After hearing the learned counsel appearing for the parties, the impugned judgment of acquittal is passed.
5. It is the submission of the learned counsel for the appellant that the Court below without properly appreciating the facts and circumstances has come to a wrong conclusion. It is his further submission that when once the respondent/accused admits the signature on the -5- cheque and he has specifically contended that the said cheque has been issued to one Sri.Ravindranath, then under such circumstance, the Court below ought to have raised a presumption under Section 139 of the Negotiable Instruments Act (hereinafter referred to as N.I. Act for short) and the burden has been fixed upon the accused to rebut the said presumption. But the accused has neither led any evidence nor brought any records to rebut the said presumption. The trial Court only on the basis of the reference to the complaint and the evidence has come to the wrong conclusion by giving reason that the complainant is not having any capacity to give the loan of the huge amount. When the accused failed to rebut the said presumption, the Court ought to have convicted the accused. He further submitted that the complainant has proved all the ingredients under Section 138 of the N.I. Act and the accused has not replied to the said notice issued under Section 138 of the N.I. Act. Under such circumstances, the Court below ought to have convicted -6- the accused. On these grounds he prayed to allow the appeal and to convict the accused.
6. I have carefully and cautiously gone through the submissions made by the learned counsel appearing for the appellant and I have also perused the lower court records.
7. As could be seen from the records it is the specific case of the complainant that the accused approached him during 2015 and he has paid the amount of Rs.2,00,000/-, Rs.1,00,000/- two times, in all Rs.4,00,000/-. He has further deposed that he has issued the cheque bearing No.404009 dated 12.5.2016 and he has further deposed that when it was presented for encashment, the same was returned with the endorsement 'funds insufficient' and thereafter he has issued the legal notice and the said notice has been served on the accused on 10.6.2016. When once all the ingredients under Section 138 of the N.I. Act have -7- been proved, then under such circumstances the Court is duty bound to draw the presumption as contemplated under Section 139 of the N.I. Act.
8. Be that as it may. Even as could be seen from the defence taken by the accused during the course of cross- examination that the complainant has no financial capacity to lend such huge amount and the said cheque was issued to one Ravindranath for security purpose and the same was misused by the complainant and filed a false complaint, the said defence itself clearly goes to show that the said cheque has been issued from the account of the accused and it bears his signature and it is his specific case that the said cheque has been issued to one Ravindranath for the purpose of security. When accused admits the signature, then under such circumstances the Court has to draw a presumption mandated under Section 139 of the N.I. Act. This proposition of law has been laid -8- down by the Hon'ble Apex Court in the case of Rangappa Vs. Sri.Mohan reported in (2010) 11 SCC 441, wherein at paragraph 16 it has been observed as under:-
16. All of these circumstances led the High Court to conclude that the accused had not raised a probable defence to rebut the statutory presumption. It was held that:
"6. Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant. The presumption referred to in Section 139 of the N.I. Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said 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 -9- must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the Court.
The defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. Unless this barrier is crossed by the accused, the other defence raised by him whether the cheque was issued towards the hand loan or towards the amount spent by the complainant need not be considered. ..."
Hence, the High Court concluded that the alleged discrepancies on part of the complainant which had been noted by the trial court were not material since the accused had failed to raise a probable defence to rebut the presumption placed on him by Section 139 of the Act.
Accordingly, the High Court recorded a finding of conviction.
9. On going through the said paragraph it reveals that Section 139 of the N.I. Act mandates the Court to
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draw a presumption that the said cheque has been issued in discharge of debt or liability. However, the accused is permitted to rebut the said presumption on preponderance of probabilities to show that the complainant was not having any capacity to lend money and there was no legally recoverable debt or liability and the said cheque has been issued for the purpose of security. It is for the accused to prove his defence, when once he has taken a specific contention that the said cheque has been issued to one Ravindranath for the purpose of security and the same has been misused by the complainant, burden is on the accused to prove the same.
10. Even though during the course of cross- examination of PW1 it has been suggested that the said cheque has been issued as a security to Ravindranath and the same has been misused, the said suggestion has been denied. Apart from that neither the accused has stepped into the witness box nor produced any document. Even he has not given any reply to the notice issued by the
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complainant as per Ex.P3. If really he has not availed the loan from the complainant and the complainant has misused the cheque Ex.P1, then under such circumstances, immediately after receipt of the legal notice as per Ex.P3 he could have given reply stating the said fact. Keeping silent over the said notice, it draw a presumption that he was not having any grievance after receipt of the said notice and even after coming to know after receipt of the legal notice, the said cheque has been bounced for insufficient funds, then under such circumstances at-least he could have filed a complaint alleging that the cheque which has been issued as a security to one Ravindranath has been misused. The conduct of the accused also does not substantiate his case. When the presumption has been drawn under Section 139 of the N.I. Act about the legally recoverable debt and the said presumption has not been rebutted by cogent and acceptable evidence, then under such circumstances, the case of the complainant stands proved and accused is
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liable to be convicted under Section 138 of the N.I. Act. Without looking into the said fact the trial Court only on the basis of the contention of the accused that a huge amount has been advanced and the complainant is not having any capacity to lend such huge amount and on that count, the trial Court has acquitted the accused. But as could be seen from the cross-examination of PW1, in his evidence it has been elicited that per month he is getting a salary of Rs.5,000/- to Rs.15,000/- and he is working as a Cinema Representative and per day he is running four shows and he has taken the house on a lease by giving Rs.5,00,000/- and it has also been elicited that he is having a only son and he is working in Bengaluru. All these materials even draw the attention of this Court that the complainant is having capacity to lend the said amount.
11. Be that as it may. When a presumption has been drawn under Section 139 of the N.I. Act, the said presumption is that there exists legally recoverable debt or
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liability. Then under such circumstances, the trial court until it is rebutted, it ought not to have gone to the said facts and ought not to have acquitted the accused. The reasons arrived at by the Court below are not based upon any cogent and acceptable evidence and as such the same is liable to be set aside and the accused is liable to be convicted.
12. Taking into consideration the above said facts and circumstances the judgment passed by the J.M.F.C.III Court, Shivamogga in C.C.No.1317/2016 dated 3.1.2018 is set aside and the accused is convicted for the offence under Section 138 of the N.I. Act and he is sentenced to pay a fine of Rs.5,00,000/-, in default, he has to undergo imprisonment for a period of six months.
Out of the fine amount, an amount of Rs.4,00,000/- has to be paid to the complainant on proper identification and acknowledgement and the remaining amount of Rs.1,00,000/- has to be forfeited to the Government as fine.
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Registry is directed to send back the lower court records forthwith.
Sd/-
JUDGE *AP/-