Karnataka High Court
R Babu Rao vs Manish H Sanghvi on 12 October, 2023
Author: Rajendra Badamikar
Bench: Rajendra Badamikar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF OCTOBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR
CRIMINAL REVISION PETITION NO.1110 OF 2019
BETWEEN:
R BABU RAO,
AGED ABOUT 68 YEARS,
S/O LATE B.RAMACHADNRA RAO,
R/AT PROPERTY NO.1635,
NEW NO.91, 6TH MAIN,
'E' BLOCK, 2ND STAGE,
RAJAJINAGAR,
BENGALURU-560010. ....PETITIONER
(BY SRI S GANESH SHENOY, ADVOCATE)
AND:
MANISH H SANGHVI,
AGED ABOUT 31 YEARS,
S/O HIRACHANDJI J SANGHVI,
RESIDING AT NO.69,
AMIBKA CLOTH MARKET,
D.K.LANE, CHICKPET CROSS,
BENGALURU-560053. ...RESPONDENT
(BY SRI R S UMESH, ADVOCATE)
THIS CRL.RP IS FILED U/S 397 R/W 401 OF CR.PC
PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED
25.07.2019 PASSED BY THE LXVIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE (CCH-69) IN CRL.A.NO.1140/2016 AND
ALLOW THE SAID APPEAL IN CRL.A.NO.1140/2016 AND SET
ASIDE THE JUDGMENT DATED 03.09.2016 PASSED BY THE XX
ADDL. C.M.M., BENGALURU IN C.C.NO.12956/2013 AND
DISMISS THE SAID COMPLAINT IN C.C.NO.12956/2013.
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THIS CRIMINAL REVISION PETITION HAVING BEEN
HEARD AND RESERVED FOR ORDERS ON 21.09.2023, COMING
ON FOR 'PRONOUNCEMENT OF ORDER' THIS DAY, THE COURT
MADE THE FOLLOWING:
ORDER
This revision petition is filed under Section 397 of Cr.P.C. by revision petitioner challenging the judgment of conviction and order of sentence passed by XX Additional Chief Metropolitan Magistrate, Bangalore, in C.C.No.12956/2013, dated 03.09.2016 and confirmed by LXVIII Additional City Civil and Sessions judge, Bengaluru City (CCH-69), in Crl.A.No.1140/2016, vide judgment dated 25.07.2019.
2. For the sake of convenience, the parties here in referred with the original ranks occupied by them before the trial court.
3. The brief factual matrix leading to the case are as under:
The accused is well acquainted with complainant for more than eight years and he approached the complainant 3 for financial assistance of Rs.2,00,000/- in order to renovate his house, to pay the loan interest to the bank and to perform the marriage of his daughter. The complainant advanced a hand loan of Rs.2,00,000/- to the accused on 01.03.2012. After repeated requests, the accused issued two cheques dated 18.03.2013 for a sum of Rs.1,00,000/- each towards repayment of a legally enforceable debt.
4. It is also asserted that the accused has also agreed to pay interest at the rate of 2% per month towards the said loan amount. The complainant has presented the said cheques for encashment and the said cheques were returned with an endorsement as 'funds insufficient'. The complaint then got issued a illegal notice to the accused and accused has given an evasive reply. Hence, the complainant claims to have filed this complaint under Section 200 of Cr.P.C. against the accused for the offence punishable under Section 138 of the Negotiable Instruments Act 1881 (for short 'N.I. Act'). 4
5. The learned Magistrate after recording the sworn statement has taken cognizance of the offence and issued a process against the accused. The accused has appeared through his counsel and was enlarged on bail. The plea under Section 138 of the N.I. Act is framed and same is read over and explained to the accused. The accused pleaded not guilty and claimed to be tried.
6. To prove the guilt of the accused, the complainant was got examined himself as PW1 and he placed reliance on eleven documents marked at Ex.P1 to Ex.P11. Thereafter, the statement of the accused under Section 313 Cr.P.C. is recorded to enable the accused to explain the incriminating evidence appearing against him in the case of the complainant. The accused has denied the incriminating evidence against him and further got examined himself as DW1. He has also placed reliance on eight documents marked at Ex.D1 to Ex.D8.
7. After hearing the arguments and after appreciating the oral as well as documentary evidence, the 5 learned Magistrate has convicted the accused for the offence punishable under Section 138 of the N.I. Act and imposed a fine of Rs.3,10,000/- to the accused with a default sentence. This order is being challenged by the accused before the LXVIII Additional City Civil and Sessions Judge, Bangalore, in Crl.A.No.1140/2016. The learned Sessions Judge after re-appreciating the oral and documentary evidence has dismissed the appeal by confirming the judgment of conviction and order of sentence passed by the learned Magistrate.
8. Against these concurrent findings of conviction, the accused is before this Court.
9. Heard the learned counsel for revision petitioner and learned counsel for respondent. Perused the records.
10. The learned counsel for the revision petitioner would contend that, both the Courts below have failed to appreciate the oral and documentary evidence in proper perspective. He would contend that admittedly, the father 6 of the complainant was an advocate representing the accused in HRC proceedings regarding recovery of his property and under the guise of settlement, he has obtained signatures on blank cheques and they are being now misused. It is also submitted that subsequently, as the complainant could not get possession, he changed the advocate and these cheques were now used by the complainant and his father, who has also filed two cases against him, making similar allegations. He would contend that he is financially sound and his house loan was cleared long prior to the alleged date of advancement of loan and further the marriage of his daughter was a love marriage and he did not spent any amount and it has also taken place long before. He further asserts that he had no financial needs and on the contrary, he asserts that the financial capacity of the complainant itself is challenged and the Income Tax Records were not produced. He would contend that the subsequent income tax returns were produced, but for a relevant period, no Income Tax Returns were produced to show that the loan was advanced to the 7 accused and subsequent to cross-examination, this transaction is said to have been shown in 2015 and it is an afterthought story. He would also contend that when the financial capacity of the complainant itself is disputed, the question of drawing a presumption in favour of the complainant under Section 139 does not arise at all.
11. He further asserts that Ex.P9 does not bear his signature and it is a disputed document and there the interest at the rate of 1% is recorded while the assertion was regarding 2% interest. He would also contend that what prompted the complainant to file a return after three years and Ex.P9 was not produced initially and it was produced subsequently and it does not tally with the signature of the complainant available on Ex.P1. Hence, he would assert that Ex.P9 is got created and the complainant has failed to prove that Ex.P1 and Ex.P2 were issued towards legally enforceable debt. It is also asserted that there is no reason for issuing two cheques of same date 8 and a single cheque could have been issued and hence, he would dispute the claim.
12. Per contra, the learned counsel for the respondent/ complainant would support the judgment of conviction and order of sentence passed by both the Courts below. He would contend that the defence raised by the accused in Ex.P7 is two-fold, but they were not substantiated. He would also assert that cheque and signatures have been admitted and even if the defence of the accused is taken note of, there is no explanation as to why he has not taken any steps to get back the cheques. Hence, he would contend that both the Courts below are justified in convicting the accused and sought for dismissal of the revision petition.
13. Having heard the arguments and after appreciating the oral and documentary evidence, now the following point would arise for my consideration:
"Whether the Judgment of conviction and order of sentence passed by both the Courts 9 below are perverse, arbitrary and erroneous so as to call for any interference by this Court?"
14. The admitted fact is that the complainant is an advocate. It is also an admitted fact that the father of the complainant is also an advocate and he was prosecuting on behalf of the accused in HRC proceedings for possession of the rented property. The accused has not disputed that Ex.P1 and Ex.P2 belong to him and they bear his signatures. However, it is his specific defence that, when the father of the complainant prosecuting as an advocate on his behalf has obtained blank cheques under the guise of negotiations in HRC matter and they were not returned and now are being misused. It is also evident from the admitted facts on records that the father of the complainant has also filed two similar cases of cheque bounce cases against the accused.
15. The complainant is examined as PW1 and in his examination-in-chief, he has reiterated the complaint allegations. He simply asserts that he knew the accused for 10 more than eight years, but did not disclose how he was acquainted with the accused. In the cross-examination, PW1 admitted that he is doing legal profession for the last seven years and his father is also an advocate. He has also admitted that the accused and his father were clients of his father. He also admitted that since 1986, his father was prosecuting HRC proceedings on behalf of the accused by filing a number of petitions.
16. In the further cross-examination, he further deposed that he is practicing along with his father and further submits he is also doing independent practice. He admits that his relationship with his father is cordial and he is residing with his father and his office is in the office of his father itself. He further admits that, except advocacy, he has no other source of income and he is not doing any other business.
17. In the further cross examination, PW1 claims that he is not doing any money-lending business and the accused has executed a demand promissory note and he 11 asserts that he would produce it. However, subsequently, he has produced it which is marked at Ex.P9. He admits that his father has filed two cases against the accused pertaining to cheque Nos.180412 and 180406. Interestingly, these cheques admitted by PW1 in respect of his father filing the complaints are in the same series.
18. PW1 further admits that he is an Income Tax assessee and he asserts that regarding advancement of loan of Rs.2,00,000/- to the accused, he has shown the same in his Income Tax Returns. He has undertaken to produce Income Tax Returns in this regard, but he did not produce Income Tax Records pertaining to 01.03.2012, when the alleged loan is said to have been advanced. He has produced the Income Tax Returns of 2014-15 and 2015-2016 and these documents were produced subsequent to his cross-examination. He has not produced the Income Tax Returns for 2012 and 2013, which is a material transaction.
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19. Further, PW1 admitted that in 2013-14 he has not advanced any loan to the accused and the amount paid in 2013 was referred in assessment year 2014-15. In the cross- examination he admits that Ex.P11 was filed by him on 31.08.2015 by e-filing and that too after the cross- examination. Hence, for a relevant period, this financial transaction was not shown in Income Tax Returns and only after cross-examination of PW1 subsequently, he submitted the Income Tax Returns in this regard. There is no evidence as to what prompted the complainant to file returns after three years is not explained. It is evident that only in order to overcome the cross-examination the same was done.
20. Though the complainant in his cross-
examination dated 25.06.2014, asserted that in his Income Tax Returns, he has shown advancement of Rs.2,00,000/- to the accused, but he has not produced the income tax returns for the relevant period and subsequent to cross- examination, he submitted Ex.P11 by e-filing and hence, 13 that cannot be looked into. Even the Income Tax Returns for the year 2013-14 and 2014 & 2015 if it is taken into consideration, it is evident that his gross annual income itself is shown to be Rs.2,78,554/-, but the allegations were advancement of loan to the tune of Rs.2,00,000/-. Further, in Income Tax Returns gross total income is shown in 2014 & 15 as Rs.2,78,554/-, but while computing, it is shown to be Rs.3,25,000/-, which is not at all explained. Accordingly, in 2015-16 Income Tax Returns filed as per Ex.P11. The gross income is shown as Rs.3,24,998/-, but the advancement of loan in 2012 is claimed to be Rs.2,00,000/- and regarding this financial status, no documents have been produced by the complainant.
21. It is the specific assertion of the complainant/accused that the father of the complainant under the guise of settlement of HRC proceedings has taken blank cheques. On perusal of Ex.P1 and the cheques pertaining to the father of the complainant as admitted by 14 him bearing 180412 and 180406 it is evident that they are of the same series.
22. In this regard, the learned counsel for the revision petitioner has invited the attention to Ex.D6 & Ex.D7, which are the legal notices issued on behalf of the father of the complainant. Ex.D6 is pertaining to cheque bearing No.180411, which is just cheque No.180412 dated 18.03.2013. But this cheque is immediately prior to Ex.P1 and Ex.P1 is dated 18.03.2013. If this version is accepted, within two days, the accused ought to have received a loan from the complainant and his father. The averments made in Ex.D6 and Ex.D7 disclose that the accused has availed loan of Rs.12,00,000/- from BBC and the father of the complainant was surety/guarantor and he repaid the said amount and towards the said discharge, these cheques have been issued under Ex.D6 & Ex.D7. No documents have been produced to show that the accused has availed loan from Bangalore Butter Centre.
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23. Apart from that, the allegations made in Ex.D6 and Ex.D7 discloses that on 18.03.2013 itself the said cheques were dishonoured and interestingly, it is alleged that the other cheque was given to the complainant on 18.03.2013 itself. These stands do not inspire the confidence of the Court that too when the complainant and his father are advocates.
24. Ex.P9 is relied by the complainant to prove the transaction on the ground that it is on-demand promissory note. The accused has specifically disputed Ex.P9 and signature on Ex.P9. Admittedly, Ex.P9 is not produced at the initial stage and subsequently, it is produced. It is the specific assertion of the complainant that there was an agreement to pay interest of 2% per month, but on perusal of Ex.P9, it is evident that interest recorded was 1% per month. These stands are inconsistent and contrary.
25. Apart from that, when the accused has disputed the signature on Ex.P9, it is the duty of the complainant to prove the said signature. The accused was fair enough to 16 admit his signature on the cheques, but disputed the signature on Ex.P9. When singature on Ex.P9 is compared with admitted signature under Section 73 of the Evidence Act, it is evident that there are lot of variances in the said signatures available on Ex.P9. Admittedly, Ex.P9 was subsequently produced and not filed along with the complaint. It does not bear the signature of any of the witnesses.
26. Further the complainant all along asserted that while advancing the amount, his father was present in the office and demand promissory note was executed by the accused, which is signed by his father as a witness. But on perusal of Ex.P9, it is evident that none of the witnesses have attested the said document Ex.P9, much less the father of the complainant. Further, the complainant alleges that on 16.03.2013 accused has handed over the cheque to him in his office. But the cheques issued in favour of the father of the complainant they are also pertaining to 16.03.2013 and 18.03.2013 date.
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27. It is an admitted fact that the father of the complainant was an advocate for the accused in HRC proceedings. Further, when the amount was advanced out of friendship and long family relationship, what was the need for taking the cheque and on-demand promissory note was not at all explained. Further, it is hard to accept that such a huge amount was advanced by the complainant and his father simultaneously without charging any interest. The said amount was also not shown in income tax returns. The demand promissory note relied by the complainant does not bear the signature of his father as claimed by the complainant himself and his father was also not examined as a witness to prove the payment of the amount. The Income tax returns disclose that the complainant was not having financial capacity to mobilize such a huge amount. Hence, the contention of complainant/revision petitioner that cheques were issued towards legally enforceable debt cannot be accepted and the defence setup by the accused appears to be more probable.
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28. The learned counsel for the respondent placed reliance on decision reported in ILR 2001 KAR 4127 [S.R.MURALIDAR vs. ASHOK G.Y.], but the facts and circumstances of the said case are entirely different and in the instant case, the accused has got a specific defence and admittedly, the father of the complainant was an advocate for accused in HRC proceeding. Hence, the said principles will not come to the aid of the respondent in any way. The learned counsel for respondent further placed reliance on a decision reported in AIR 2014 SC 2528 [INDIAN BANK ASSOCIATION AND ORS. Vs. UNION OF INDIA AND ORS.], but in what context the principles enunciated in the above cited decision will come to the aid of the complainant/respondent herein is not at all forthcoming. The facts being different, the said principles cannot be made applicable to the case in hand.
29. He further placed reliance on a decision reported in (2016) 3 SCC 1 [DON AYENGIA vs. STATE OF ASSAM AND ANOTHER]. It is pertaining to debt or other liability and it is held in the said decision that it need not only of a 19 person who has directly or primarily enjoyed the benefit thereof, like the principal debtor and a person who is signatory liable, such as surety or guarantor can also be convicted under Section 138 of the N.I. Act. But the facts and circumstances of the said case are entirely different and this is not a case of guarantor and hence, the said principles will not come to the aid of the respondent in any way. He has further placed reliance on a decision reported in AIR 2002 SC 3014 [I.C.D.S. LTD vs. BEEMNA SHABEER AND ANOTHER], but it is pertaining to cheque issued by guarantor and it falls under other liability and issue regarding co-extensive liability of guarantor and principal debtor came to be discussed. But the said principle does not come to the aid of the respondent in any way.
30. He has further placed reliance on a decision unreported decision of this Court in Crl.P.No.8943/2010 [M/s. MESH TRANS GEARS PRIVATE LIMITED vs. Dr.R.PARVATHREDDY], but the facts and circumstances being entirely different and the said principles cannot be made applicable to the case in hand. He has also placed 20 reliance of a decision of the Bombay High Court reported in 2023:BHC-NAG:12352 [PRAKASH MADHUKARRAO DESAI vs. DATTATRAYA SHESHRAO DESAI], wherein the decision of Sanjay Mishra's case which was relied by the learned counsel for the revision petitioner was overruled, but in what way this decision would assist the respondent is not at all forthcoming.
31. The learned counsel for the revision petitioner has placed reliance on a decision of 2009 SCC online Bom 290 [SANJAY MISHRA vs. KANISHKA KAPOOR @ NIKKI AND ANOTHER]. But the said decision was overruled by the Division Bench of Bombay High Court itself as referred above. It is pertaining to disclosure of the loan in Income Tax Returns. However, this issue was considered by the Apex Court in 2023 SCC OnLine SC 48 [RAJARAM THROUGH L.Rs. vs. MARUTHACHALAM]. In para No.34 of the said judgment, the Hon'ble Apex Court had occasion to reconsider the Income Tax Returns and when the Income Tax Returns did not disclose the lent amount and that was not declared to show that the income of the complainant, 21 that is a good ground to reject the claim of the complainant. The said principles are directly applicable to the facts and circumstances of the case in hand and in view of the Supreme Court decision relied by the learned counsel for the respondent in Prakash Madhukarrao's case referred above does not have any relevance. Further, in 2012 SCC OnLine Mad 2076 [T.R.PALANISAMY vs. HARIHARAN], the Madras High Court has again held that when the transaction is not shown in the income tax returns it is to be held as illegal one and the said principle is re-affirmed by the Apex Court in the decision of Rajaram's case referred above. On the same issue, he further placed reliance on a decision reported in 2012 SCC OnLine Mad 1044 [T.R. KANNAN vs. RAMANI BAI]. The learned counsel for the revision petitioner further placed reliance on a decision reported in (2017) 11 SCC 469 [AJAY KUMAR GARG vs. GAURAV AND ANOTHER], but in what way it is helpful to the revision petitioner is not at all forthcoming. The learned counsel has further placed reliance on a decision reported in ILR 2013(4) KERALA 22 115 [PURUSHOTHAMAN NAIR.P vs. SREEKANTAN NAIR]. But the facts and circumstances are entirely different. The learned counsel for the revision petitioner further placed reliance on a decision reported in (2022) 8 SCC 204 [MALKEET SINGH GILL vs. STATE OF CHHATTISGARH]. In the said case, the Hon'ble Apex Court has held that reappreciation of the evidence in revision by the third Court is permissible when the findings of the fact recorded by the Courts below are totally perverse. Admittedly, in the instant case both the Courts below did not consider the financial capacity and that Ex.P9 is not proved and the cross-examination of complainant disclose that Ex.P9 was a concocted document. Further, both the Courts lost the sight that father of the complainant was an advocate for the accused.
32. Learned counsel for the revision petitioner has further placed reliance on a decision reported in (2022) 6 SCC 735 [TEDHI SINGH vs. NARAYAN DASS MAHANT]. In the said decision, the Hon'ble Apex Court has observed that the complainant need not show his financial 23 capacity unless the same was questioned in reply notices. However, it is further observed that the accused can set up such a case by producing independent material or partly material produced by the complainant himself or by cross- examining. The same is exactly happened in the instant case, as by way of cross-examination the accused has exposed the complainant. This decision in Thedi Singh is holding the field till today and the accused by cross- examining the complainant has rebutted the presumption by challenging his financial capacity. Hence, the said principles are directly applicable to the facts and circumstances of the case in hand. He has further placed reliance on a decision of 2023 ACD 69 [BIJU T. CHACKO vs. SUNNY.P.CHACKO AND ORS.] of Kerala High Court.
33. Considering these facts and circumstances, it is evident that complainant at the first instance, failed to prove his financial capacity to advance such a huge loan to the accused. Further, the defence raised by the accused appears to be more probable in view of the fact that the father of the complainant was an advocate for accused in 24 HRC proceedings. Further the father of the complainant and complainant both filed cheque bounce cases against the accused, which again consolidates the defence set up by the accused. Further, the pronote is not proved as none of the witnesses have signed and though the complainant asserts that his father has signed it, the same is missing and further, the signature of accused also does not tally. All these facts and circumstances clearly establish that the complainant was unable to prove that he had capacity to advance the loan and he advanced the loan of Rs.2,00,000/- to the complainant that too without interest for nearly one year. Further, the grounds urged for availment of loan by the complainant are falsified in view of fact that the marriage of the daughter of the complainant was performed long before and he had also cleared the loan prior to the availment of the loan itself. The complainant has failed to establish that cheque was issued towards legally enforceable debt.
34. Both the courts below have failed to appreciate the oral and documentary evidence in proper perspective. 25 They only on the basis of assumptions and presumptions proceeded to convict the accused on the ground that the cheque belongs to the accused and it bears his signature without appreciating the cross-examination of PW1 and the documents produced by the accused by appreciating the defence set up by him. Hence, the entire approach of both the courts below is perverse and the judgment of conviction and order of sentence falls under the category of perversity. As such, this Court being a revisional Court is empowered to interfere with the said judgment of conviction and order of sentence passed by both Courts below which has resulted in miscarriage of Justice. As such, the point under consideration is answered in the affirmative. Accordingly, I proceed to pass the following:
ORDER
(i) The revision petition is allowed.
(ii) The impugned judgment of conviction and order of sentence passed by XX Additional Chief Metropolitan Magistrate, Bangalore, in C.C.No.12956/2013, dated 03.09.2016 and confirmed by LXVIII Additional City Civil and 26 Sessions judge, Bengaluru City (CCH-69), in Crl.A.No.1140/2016, vide judgment dated 25.07.2019 are set aside.
(iii) The accused/revision petitioner stands acquitted for the offence punishable under Section 138 of the N.I.Act and he is set at liberty forthwith.
(iv) The bail bonds executed by him shall stand cancelled.
(v) The amount in deposit made by the accused/revision petitioner shall be refunded to him.
Sd/-
JUDGE DS