Karnataka High Court
Herman Castelino vs Dr Suresh Kudva on 9 June, 2022
Author: H.B. Prabhakara Sastry
Bench: H.B. Prabhakara Sastry
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF JUNE, 2022
BEFORE
THE HON'BLE Dr. JUSTICE H.B. PRABHAKARA SASTRY
CRIMINAL REVISION PETITION No.592 OF 2019
BETWEEN:
Herman Castelino,
Aged about 51 years,
S/o. Alex Castelino,
Residing at Kabettu,
Karkala Kasba Village,
Karkala Taluk,
Udupi District - 576 002.
..Petitioner
(By Sri. H. Pavana Chandra Shetty, Advocate)
AND:
Dr. Suresh Kudva,
Aged about 60 years,
S/o. Late Vasudeva Kudva,
Residing at Door No.266/2,
Ananthashayana,
Karkala Kasba Village,
Karkala Taluk,
Udupi District 576 002.
.. Respondent
(By Sri. M. Vijaya Krishna Bhat, Advocate)
****
This Criminal Revision Petition is filed under Section 397
read with Section 401 of the Code of Criminal Procedure, 1973,
praying to set aside the judgment and order dated 11-03-2019
passed by the Court of the Principal District and Sessions Judge,
Udupi District, Udupi, in Crl.Appeal No.5/2018 and judgment of
Crl.R.P.No.592/2019
2
conviction and sentence passed by the Court of the Principal Civil
Judge and J.M.F.C. at Karkala in C.C.No.578/2014 by order
dated 18-12-2017 under Section 255(2) of the Cr.P.C. convicted
the petitioner for the offence punishable under Section 138 of
the Negotiable Instruments Act and sentenced the
accused/petitioner to undergo simple imprisonment for a period
of one year and pay a fine of `10,000/-. In default of payment of
fine, the accused/petitioner shall undergo simple imprisonment
for a period of six months, acting under Section 357 of Cr.P.C.
the compensation is awarded and accused/petitioner shall pay
compensation of `5,00,000/- to the respondent/complainant.
This Criminal Revision Petition having been heard through
physical hearing/video conferencing hearing and reserved on
02-06-2022, coming on for pronouncement of orders this day,
the Court made the following:
ORDER
The present petitioner as the accused was tried by the Court of the learned Principal Civil Judge and Judicial Magistrate First Class, Karkala, (hereinafter for brevity referred to as "the Trial Court"), in Criminal Case No.578/2014, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as "the N.I. Act") and was convicted for the said offence by its judgment of conviction and order on sentence dated 18-12-2017.
Aggrieved by the same, the accused preferred a Criminal Appeal, in the Court of the learned Principal District Crl.R.P.No.592/2019 3 and Sessions Judge, Udupi District, Udupi, (hereinafter for brevity referred to as "the Sessions Judge's Court") in Criminal Appeal No.5/2018.
The appeal was contested by the respondent who was the complainant in the Trial Court. The Sessions Judge's Court in its order dated 11-03-2019 dismissed the appeal, confirming the judgment of conviction and order on sentence passed by the Trial Court dated 18-12-2017 in C.C.No.578/2014.
Aggrieved by the said order, the accused has preferred this revision petition.
2. The summary of the case of the complainant in the Trial Court was that, the complainant and the accused are known to each other. The complainant is a Medical Practitioner and a Medical Examiner in the Life Insurance Corporation of India (LIC), Karkala Branch and the accused is an LIC Agent. At the request of the accused, the complainant had advanced a hand loan of a sum of `5,00,000/- to the accused in cash in the first week of Crl.R.P.No.592/2019 4 January 2013 at his residence. The accused had issued a cheque dated 20-03-2013 bearing No.749010 for `5,00,000/- drawn on the Corporation Bank, Karkala Branch, in favour of the complainant in discharge of the amount legally due to the complainant. When the said cheque was presented for realisation, the same came to be dishonoured and returned for the reasons 'funds insufficient' and 'Account Closed/Transferred to......', as per the banker's memo dated 23-03-2013. Thereafter, the complainant got issued a legal notice dated 04-04-2013, calling upon the accused to make payment of the cheque amount, however, the said notice was returned as unclaimed. This constrained the complainant to institute a criminal case against the accused, in the Trial Court, in C.C.No.578/2014, for the offence punishable under Section 138 of the N.I. Act.
3. The accused appeared in the Trial Court and contested the matter through his counsel. He pleaded not guilty and claimed to be tried, as such, the Trial Court Crl.R.P.No.592/2019 5 proceeded to record the evidence. To prove his case, the complainant got himself examined as PW-1 and got marked documents from Exs.P-1 to P-20 and closed his side. The accused got himself examined as DW-2 and examined one more witness - Sri. Akki Basavaraj as DW-1 and got marked documents from Exs.D-1 to D-8, in his support.
4. The Trial Court after recording the evidence led before it and hearing both side, by its impugned judgment of conviction and order on sentence dated 18-12-2017 convicted the accused for the offence punishable under Section 138 of the N.I. Act and sentenced him to undergo simple imprisonment for a period of one year and pay a fine of `10,000/-. In default of payment of fine, the accused shall undergo simple imprisonment for a period of six months. Acting under Section 357 of the Code of Criminal Procedure, 1973, it directed the accused to pay compensation of a sum of `5,00,000/- to the complainant. Challenging the said judgment of conviction and order on sentence passed by the Trial Court, the accused preferred Crl.R.P.No.592/2019 6 an appeal in Criminal Appeal No.5/2018, before the learned Sessions Judge's Court, which after hearing both side, by its impugned judgment dated 11-03-2019 dismissed the appeal filed by the accused, while confirming the impugned judgment of conviction and order on sentence passed by the Trial Court. Being aggrieved by the judgments of conviction and order on sentence, the accused has preferred this revision petition.
5. Learned counsel for the revision petitioner (accused) and learned counsel for the respondent/complainant are appearing physically in the Court.
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6. The Trial Court and Sessions Judge's Court's records were called for and the same are placed before this Court.
7. Perused the materials placed before this Court including impugned judgments and the Trial Court and Sessions Judge's Court's records.
Crl.R.P.No.592/20197
8. For the sake of convenience, the parties would be henceforth referred to as per their rankings before the Trial Court.
9. Learned counsel for the petitioner (accused) in his argument admitted that the accused is the drawer of the cheque at Ex.P-1 and that the said cheque has been dishonoured when presented for its realisation with the shara 'Account Closed'. However, his main point of argument was that the said cheque at Ex.P-1 is materially altered in its date, as such, the instrument has become void. This aspect, both the Trial Court and the Sessions Judge's Court have not noticed. He further submitted that the complainant has failed to prove that he had financial capacity to lend such a huge amount of money of `5,00,000/- as loan to the accused. He further submitted that the accused and complainant are not in good terms. Since the accused, as an LIC agent, refused to pay the demanded commission by the complainant in the LIC policies' premiums of the colleagues of the complainant, Crl.R.P.No.592/2019 8 the complainant in whose clinic the accused used to leave his belongings including the documents like the cheques has taken out the cheque in question and misused by him.
10. Learned counsel for the respondent (complainant) in his argument submitted that there is no material alteration in the cheque. The year column in the cheque at Ex.P-1 is clearly shown as '2013'. The alleged alteration from the year '19' to '20B', is not suggested to PW-1 in his cross-examination, but only an alteration in the cheque has been suggested. He further submitted that being a Medical Practitioner from the year 1984, the complainant had sufficient source of income and that his mother also had saved the amounts given to her by her children, as such, the complainant and his mother had sufficient source of income which had enabled the complainant to lend the loan amount to the accused.
Crl.R.P.No.592/20199
11. After hearing the learned counsels for the parties, the only point that arise for my consideration in this revision petition is:
Whether the judgments under revision are perverse, illegal and erroneous, warranting interference at the hands of this Court?
12. It is not in dispute that the complainant is a Doctor, as such, a Medical Practitioner in his profession and is running a Hospital in the Town of Karkala. He is also a Medical Practitioner for the LIC of India, attached to the Karkala Branch. It is also an admitted fact that the accused is an LIC agent attached to the Karkala Branch of LIC and that both the complainant and the accused were known to each other. It is also not in dispute that the cheque at Ex.P-1 which is for a sum of `5,00,000/- is drawn by the accused and the name of the payee is shown as that of the complainant. It is also not in dispute that the cheque was presented for its realisation by the complainant through his banker, however, the same came to be returned unpaid. Crl.R.P.No.592/2019 10 According to the accused, the said cheque came to be returned for the reason of closure of his account, which is also the evidence of DW-1 - Bank Manager, however, according to the complainant, the said cheque was returned for the reason of not only closure of the account, but also of insufficiency of funds in the account of the accused, as could be seen from the cheque return memo issued by the Banker at Ex.P-2. It is in the light of the above undisputed facts, the contentions of the parties are required to be analysed in the light of the evidence led by them.
13. The complainant got himself examined as PW-1 wherein he reiterated the contentions taken up by him in his complaint. Apart from Ex.P-1 and Ex.P-2, he has also produced one more banker's memo for return of the cheque issued by his banker at Ex.P-3, a copy of the lawyers notice at Ex.P-4, unclaimed RPAD cover along with original legal notice in it at Ex.P-5 and P-5 (a) respectively. With this, the complainant contended that after return of the cheque, he got issued a legal notice within time to the accused, Crl.R.P.No.592/2019 11 demanding the payment of the cheque amount, however, the said notice was returned to the sender un-served. The complainant was cross-examined extensively from the accused's side, where attempts were made to show that the complainant had no financial capacity to lend such a huge sum of money and that the cheque was not issued by the accused to the complainant towards dischargal of any legally enforceable debt. It was specifically suggested to the witness that there was no loan availed by the accused from the complainant much less a sum of `5,00,000/-, as contended by the complainant. It was also suggested to the witness that there is alteration in the cheque at Ex.P-1.
14. From the accused's side, the then Manager of the Corporation Bank, Karkala was examined as DW-1, who, in his evidence, has stated that the cheque at Ex.P-1 which pertains to the account of the accused was returned for the reason of 'Account Closed' when presented for its realisation. He has admitted a suggestion that there was material alteration in the date mentioned in the cheque at Crl.R.P.No.592/2019 12 Ex.P-1. Though it was suggested to the witness in his cross-examination from the complainant's side that the cheque was returned for two reasons including the reason of insufficiency of funds, however, the witness stated that the cheque was returned for the reason of closure of the account, still, he cannot say about the other reason since the endorsement at Ex.P-2 was not written by him.
15. The accused got himself examined as DW-2 wherein, though he has not denied that the cheque at Ex.P-1 was drawn by him, he specifically stated that he has not given the said cheque to the complainant at any point of time, much less towards the non-existing loan of a sum of `5,00,000/- in favour of the complainant. On the other hand, he has taken a defence that since he was meeting the complainant and his wife quite often, towards medical examination of the proposers of the Insurance Policies, at that time, the complainant and/or his wife might have lifted the subject matter cheque from his bag and have misused it. The witness was cross-examined extensively from the Crl.R.P.No.592/2019 13 complainant's side, where attempts were made to show that the accused was facing few more similar cheque dishonour cases as an accused. In order to show that, the signature at Ex.P-1(a) was that of the accused, the vakalath of the accused with his signature therein was marked at Exs.P-6 and P-6(a) to show that the accused was facing several other criminal cases, majority of which are the cases regarding the offence punishable under Section 138 of the N.I. Act. The certified copies of the order sheets in several criminal cases were marked from Exs.P-7 to P-20 in the cross-examination of DW-1. The accused also got marked eight documents from Exs.D-1 to D-8 from his side including copy of the statements of account, Form No.16, and a letter.
16. The main contention of the learned counsel for the petitioner (accused) is that, the cheque at Ex.P-1 has been materially altered, without the notice or consent of the drawer of the cheque, as such, the instrument has become invalid.
Crl.R.P.No.592/201914
17. Learned counsel for the respondent submits that there is no such material alteration in the instrument and that the cheque is shown to have been issued by the drawer in the year 2013.
18. A perusal of the cheque at Ex.P-1 would go to show that, in the date column, the first two digits of the year is printed as '19', however, the said two digits i.e. '19' is shown to have been cancelled/scored off with a dash, i.e. '--' marked on those two digits/figures and after that, it is written as '20' followed by another figure which for a naked eye appears to be as '8', but, in close scrutiny looks like 'B', which, according to the complainant is '13'. The said two or one figure after the two digits/figures '20' is the subject matter of different interpretation by the learned counsels from both side.
In the cross-examination of PW-1, without explaining as to what the alleged material alteration is, it was only suggested to the witness that, there is a material alteration in the cheque at Ex.P-1. However, the said suggestion was Crl.R.P.No.592/2019 15 not admitted as true by the witness. The accused in his examination-in-chief has not stated anything about the alleged alteration in the date of the cheque. Therefore, naturally in his cross-examination also, nothing has come out regarding the alleged alteration of the date of the cheque. However, DW-1, the Bank Manager of the drawee Bank, in his examination-in-chief has admitted a suggestion as true that there is an alteration in the date of the cheque at Ex.P-1, however, he volunteered to say that he does not know as to who has made that alteration and when. The said evidence of DW-1 the Bank Manager that there is material alteration in the date of the cheque at Ex.P-1, has not been denied or disputed in the cross-examination of the said witness from the complainant's side.
The un-denied evidence of DW-1 the Manager of the Drawee Bank prevents the Court from understanding the two digits in the date column which could have been read or recognised as '8' or 'B' from taking it as '13', however, the fact remains that there is alteration in the date of the cheque at Ex.P-1. Even the learned Sessions Judge's Court Crl.R.P.No.592/2019 16 also in Criminal Appeal No.5/2018 in its impugned judgment has opined that the date in the cheque at Ex.P-1 shows that it was altered, however, the learned Judge has opined that he was unable to accept the same as a material alteration. On the other hand, he has given his own interpretation observing that the account was closed in the year 2005. Therefore, when an attempt was made to mention the year as '2013', it was written as '2008' instead of '2013'.
If at all there was any such attempt for alteration, the year should have been written as '2008' but not as '208'. The said reasoning of the learned Sessions Judge's Court is also not convincing because he himself has stated that, in an attempt to mention the year as '2013', it was written as '2008' instead of '2013'. Thus, the further attempt to make the year as '2013' would naturally amount to an alteration which is admittedly not authenticated by the drawer of the instrument.
19. In M.L. Tannan's Banking Law and Practice in India Twenty-eighth Edition - 2021, he has defined "Material alterations" at page 950, as below: Crl.R.P.No.592/2019 17
"An alteration is material, which in any way alters materially or substantially the operation of the instrument and the liabilities of the parties thereto, irrespective of the fact whether or not the change is prejudicial to the payee."
Apart from stating that a banker must be very careful when there is a material alteration in the cheque presented for payment and that it should see that such alteration has been made with the drawer's consent or authority and is confirmed by his signature, Tannan has also given few examples of material alterations in which the alteration of the date of the instrument with the purpose of accelerating or postponing the time of the payment comes on the top.
20. In the instant case, the alteration in the cheque at Ex.P-1 has been admitted by none else than the drawee Bank Manager in his evidence as DW-1. Though it was not elicited from him about the nature of the said alteration, however, he has identified the said alteration as an alteration in the date of the cheque. As analysed above, in the date column, the year appears to have been manipulated and appears to have been Crl.R.P.No.592/2019 18 postponed the time of payment. Thus, undoubtedly, it is a material alteration in the cheque.
21. Section 87 of the N.I. Act which speaks about the effect of material alteration, states that any material alteration of a Negotiable Instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties.
In the instant case, there is nothing on record to show that the alteration in the date of the cheque at Ex.P-1 was made in order to carry out the common intention of the original parties. Therefore, by virtue of the material alteration being made to the date of the cheque without any authentication thereto by the drawer of the cheque, the instrument becomes void. However, the banker, even there being a material alteration in the cheque, did not proceed to mention the same as one among the reasons for returning of the cheque, but only stated that the cheque was returned for Crl.R.P.No.592/2019 19 the reason of closure of the account by the drawer. As noticed above, the Bank Manager as DW-1 referring to the register maintained by them, has stated that the cheque at Ex.P-1 was returned by them by mentioning only the reason of closure of the account. He made it clear even in his cross- examination that the banker had returned the cheque only with the reason of "Account Closed", as such, he could not give any explanation as to how come the reason of 'funds insufficient' was also shown as marked with a tick '√' in the cheque return memo at Ex.P-2. However, in the cross- examination of PW-1, it was suggested that the complainant, with an intention to ensure that he would maintain a case against the accused for the offence punishable under Section 138 of the N.I. Act, manipulated the cheque return memo showing the same as returned even for the reason of insufficiency of funds. Therefore, it is clear that since the account of the drawer of the cheque was closed with the drawee Bank as on the date of the presentation of the cheque at Ex.P-1, it confined the reason for returning of the cheque only to the reason of "account closed". Thus, it cannot be Crl.R.P.No.592/2019 20 deduced that, had there been any material alteration in the cheque at Ex.P-1, the banker should have necessarily mentioned about the same. At the cost of repetition, it is again observed that DW-1 as a Bank Manager of the drawee Bank himself has stated that there is alteration in the date column of the cheque at Ex.P-1. Surprisingly, neither the Trial Court nor the learned Sessions Judge's Court have noticed this aspect, on the contrary, merely because there was a cheque return memo and legal notice copy, they have proceeded to hold that the guilt against the accused has been proved beyond all reasonable doubts. Had they noticed the material alteration existing in the cheque at Ex.P-1, making the instrument at Ex.P-1 void, then, they would not have proceeded to hold the accused before it guilty of the alleged offence. Since the said finding of both the Trial Court as well the learned Sessions Judge's Court holding the accused guilty of the alleged offence is now established to be a perverse and erroneous finding, the same warrants interference at the hands of this Court. Thus, without discussing the other aspect of the alleged allegation of financial incapacity of the Crl.R.P.No.592/2019 21 complainant to lend such a huge sum of money to the accused, suffice it to hold that the impugned judgments of both the Courts deserve to be set aside and the accused deserves to be acquitted of the alleged offence.
Accordingly, I proceed to pass the following:
ORDER [i] The Criminal Revision Petition stands allowed. [ii] The impugned judgment of conviction and order on sentence passed by the learned Principal Civil Judge and Judicial Magistrate First Class, Karkala, dated 18-12-2017 in Criminal Case No.578/2014, holding the petitioner herein (accused) guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, and the impugned judgment passed by the learned Principal District and Sessions Judge, Udupi District, Udupi, dated 11-03-
2019, in Criminal Appeal No.5/2018, confirming the judgment of the Trial Court, are hereby set aside;
[iii] The petitioner (accused) - Sri. Herman Castelino, Aged about 51 years, S/o. Alex Castelino, Residing at Kabettu, Karkala Kasba Village, Karkala Taluk, Udupi Crl.R.P.No.592/2019 22 District, is acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
Registry to transmit a copy of this order to both the Trial Court and also to the Sessions Judge's Court along with their respective records, forthwith.
Sd/-
JUDGE BMV*