Karnataka High Court
M/S Shriram Transport Finance Co.Ltd vs Samba Shiva Rao S/O Ramayya on 15 September, 2023
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CRL.A No.100281 OF 2015
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 15TH DAY OF SEPTEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE ANIL B KATTI
CRIMINAL APPEAL NO.100281 OF 2015
BETWEEN:
M/S. SHRIRAM TRANSPORT FINANCE CO. LTD.
HAVING REGISTERED OFFICE AT CHENNAI AND
BRANCH OFFICE AT IIIRD FLOOR, RAJAPUR SKIES
OPP DR. JAYARAM HOSPITAL COLLEGE ROAD
HOSPET, BELLARY DISTRICT
REPRESENTED BY ITS EMPLOYEE &
AUTHORISED SIGNATORY G. KRISHNA MURTHY
Digitally S/O DEVAREDDY GOUDA
signed by
SAMREEN
SAMREEN AYUB
AGED ABOUT 35 YEARS
DESHNUR
AYUB
DESHNUR Date: HINDHU, R/O HOSPET, BELLARY DISTRICT.
2023.09.25
12:34:09
+0530
...APPELLANT
(BY SRI. SHREEVATSA S HEGDE, ADVOCATE)
AND:
SAMBA SHIVA RAO
S/O RAMAYYA
MAJOR, OCC: BUSINESS
R/O OPP. TSP LTD., DAM ROAD
INDIRA NAGAR, HOSPET, BELLARY DISTRICT.
...RESPONDENT
(BY MS. RANJITA REDDY, ADVOCATE FOR
SRI. Y. LAKSHMIKANT REDDY., ADVOCATE)
***
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF
CR.P.C., PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF
ACQUITTAL DATED 5.10.2015 PASSED BY THE ADDL. CIVIL JUDGE
AND JMFC COURT, HOSPET IN C.C. NO. 1452 OF 2013 AND CONVICT
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CRL.A No.100281 OF 2015
THE RESPONDENT FOR THE ORDER PUNISHABLE U/S. 138 OF
NEGOTIABLE INSTRUMENTS ACT.
THIS CRIMINAL APPEAL COMING ON FOR HEARING AND THE
SAME HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON
13.07.2023, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
JUDGMENT
Appellant/complainant feeling aggrieved by the judgment of acquittal passed by the Trial Court on the file of Additional Civil Judge and JMFC Court, Hospete, in C.C.No.1452/2013 dated 5.10.2015 preferred this appeal.
2. Parties to the appeal are referred with their ranks as assigned in the Trial Court for the sake of convenience.
3. Heard arguments of both sides.
4. On the basis of the case made out by the complainant and the arguments addressed by both sides, the following point arises for consideration of this Court.
1. Whether the impugned judgment of Trial Court under appeal calls for any interference by this Court ?
5. On careful perusal of oral and documentary evidence placed on record by the complainant, it would go to show -3- CRL.A No.100281 OF 2015 that complainant, M/s.Shriram Transport Finance Company is a private limited Company, registered under the Indian Companies Act, 1956. Accused has borrowed vehicle loan from the complainant company for purchase of TATA Tipper Model-2006 vehicle bearing registration No.KA-35/7114 for a sum of RS.11,25,000/-. Accordingly, the complainant/company and accused have entered into a loan-cum-hypothecation agreement. Accused has agreed to repay the said loan in 48 periodical installments. Accused has committed default in making repayment of loan with interest and the accused was in due of Rs.13,13,000/-.
6. Accused in order to discharge the said debt, issued cheque bearing No.434834 drawn on Bank of Maharastra, Hospet Branch, Ex.P3 dated 11.12.2012. Complainant/company presented the said cheque through its banker Axis Bank Ltd. Hospet branch for encashment and the same was returned vide bank endorsements as 'funds insufficient' Exs.P4 and P5. Complainant issued demand notice Ex.P6 and the same is sent through RPAD. -4-
CRL.A No.100281 OF 2015 The postal receipt is produced at Ex.P8. Accused refused to receive the same on 9.1.2013 and the returned RPAD cover is produced at Ex.P7.
7. Issuance of cheque Ex.P3 with signature of accused on the account maintained by him in Bank of Maharastra is not in dispute by the accused. Looking to the tenor of cross examination of PW1, it would go to show that accused is questioning the personal knowledge of PW1 in giving evidence and non production of loan documents in the present case. Therefore, when the issuance of cheque with signature of the accused on the account maintained by him is either admitted or proved, then statutory provision in terms of Sections 118 and 139 of the N.I. Act will have to be drawn. In this context of the matter, it is useful to refer the judgment of Hon'ble Apex Court in APS Forex Services Pvt. Ltd. Vs. Shakti International Fashion Linkers and others reported in AIR 2020 SC 945, wherein it has been observed and held that once the issuance and signature on cheque is admitted, there is always a presumption in favour of complainant that there -5- CRL.A No.100281 OF 2015 exist legally enforceable debt or liability. Plea by accused that cheque was given by view of security and same has been misused by complainant is not tenable.
8. In the present case, accused has not chosen to lead any of his evidence and has chosen to rely on the material evidence brought on record by the complainant and the confronted document Ex.D1. In this context of the matter, it is useful to refer the judgment of Hon'ble Apex Court in Basalingappa Vs. Mudibasappa reported in 2019 Cr.R. page No. 639 (SC), wherein it has been observed and held that:
"Presumption under Section 139 is rebuttable presumption and onus is on accused to raise probable defence. Standard of proof for rebutting presumption is that of preponderance of probabilities. To rebut presumption, it is open for accused to rely on evidence laid by him or accused can also rely on materials submitted by complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from materials brought on record by parties, but also by reference to circumstances upon which they -6- CRL.A No.100281 OF 2015 rely. It is not necessary for accused to come in witness box in support of his defence. Section 139 imposed an evidentiary burden and not a presumptive burden".
In view of the principles enunciated in this judgment, it is evident that the accused to probabilise his defence can rely on his own evidence or also can rely on material submitted by complainant. It is not necessary for the accused to step into witness box to probabilise his defence.
9. Accused during the course of his statement under Section 313 Cr.P.C., has not offered any explanation as to how the complainant/company came in possession of the cheque with his signature on the account maintained by him drawn on Bank of Maharastra. It has been elicited in the cross-examination of PW1 that complainant/company has filed four cases against accused and one case against his wife during the years 2011 and 2012. Loan was given for purchase of new lorry in the year 2006 and the value of the vehicle loan Rs.9,00,000/- was directly paid to the -7- CRL.A No.100281 OF 2015 dealer and accordingly, loan-cum-hypothecation agreement is entered into between complainant/company and accused.
10. Accused was the defaulter in making repayment of the loan amount with interest and the vehicle was seized, further the same was sold in public auction and the sale value of Rs.1,00,000/- was adjusted towards the outstanding loan amount of the accused.
11. It is also suggested to PW1 that loan documents are not produced which contains the clause of giving cheque for security. The 'B' register extract Ex.D1 was confronted to PW1 and he has admitted that name of the accused is not appearing in the said document. It is true that the name of the complainant/company is shown as registered owner in the 'B' register extract as per Ex.D1 with respect of vehicle bearing KA-35/7114 which was subjected to loan-cum-hypothication agreement with the complainant /company. It is not the case of the accused that the said -8- CRL.A No.100281 OF 2015 vehicle belongs to the complainant/company and he is not connected with the said vehicle.
12. On going through the evidence of PW1 and the documents placed before the Trial Court, the defence of accused can be culled out as under :
1) GPA holder of the complainant/company has no authority to file the complaint.
2) Complainant not issued any notice for seizing the vehicle.
3) There is specific clause in the hire purchase agreement that accused has to give blank signed cheque and accordingly, he has given blank signed cheque and the same has been misused by the complainant/company to file this false complaint.
4) The 'B' register extract Ex.D1 does not contain the name of accused as the RC owner.
13. The Trial Court having accepted the said defence of the accused recorded finding that accused has -9- CRL.A No.100281 OF 2015 probabalised his defence, since the post dated cheque after seizure of the vehicle cannot be presented for encashment as the cheque becomes instrument without consideration. If at all the complainant has any claim, can file civil suit and the proceedings under Section 138 of the N.I. Act cannot be maintained.
14. Learned counsel for respondent/complainant relied on the Co-ordinate Bench judgment of this Court in M/s.Shriram Transport Finance Co., Ltd. Vs. Sri H Yallappa Naik in Criminal Appeal No.2526/2009 dated 19.2.2014 wherein it has been observed and held that power of attorney holder of the complainant admitted that he has not produced the loan documents and not aware of the loan transaction. The hire purchase agreement was cancelled long back and the cheque which was given as a security for the payment of debt has been misused. The material brought on record by the accused would be sufficient to probabalise his defence. Therefore, dismissed the appeal and confirmed the judgment of acquittal passed by the Trial Court.
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CRL.A No.100281 OF 2015
15. Reliance is also placed on another Co-ordinate Bench judgment of this Court in M/s.Shriram Transport Finance Co.Ltd. vs. Smt.Lalithamma in Criminal Appeal No.100085/2014 dated 29.11.2022 wherein it has been observed and held that as on the date of issuance of cheque, there was no existing debt or liability. However, it is issued only as a collateral security as could be seen from the evidence of DW1 and the stale cheque cannot be enforced claiming that the same was issued for legally enforceable debt.
16. On the other hand, learned counsel for the appellant relied on the judgment of Hon'ble Apex Court in D K Chandel - vs - Wockhardt Limited and Another reported in (2020) 13 Supreme Court Cases 471 to substantiate his contention that production of account book/cash book may be relevant in Civil Court but may not so in criminal cases filed under Section 138 of the N.I. Act because of presumption raised in favour of the holder of the cheque. In view of the principles enunciated in this
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CRL.A No.100281 OF 2015 decision, the contention of the learned counsel for the respondent/accused that loan documents are not produced to substantiate the legally enforceable debt covered under Ex.P1 cannot be legally sustained.
17. Learned counsel for the appellant relied on the Co- ordinate Bench judgment of this Court in M/s.Shriram Transport Finance Company ltd. Vs. Eshwarappa Naiker s/o.Bhuthappa in Criminal Appeal No.100155/2015 dated 8.12.2020 wherein it was found that other than the suggestions made to PW1 which has been denied, no any other evidence has been placed on record by the accused.
18. The Hon'ble Apex court in the judgment in Sumeti Vij vs. Paramount Tech Fab Industries reported in 2021 SCC OnLine SC 201 while considering its earlier judgment in Kumar Exports v. Sharma Carpets reported in (2009) 2 SCC 513, referred the following extraction :
"The accused may adduce direct evidence to prove that the note in question was not
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CRL.A No.100281 OF 2015 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 disprove the non- existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the 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 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 the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling,
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CRL.A No.100281 OF 2015 the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence act to rebut the presumptions arising under Sections 118 and 139 of the Act.
The Hon'ble Apex Court having accepted the above finding recorded in this earlier judgment has confirmed the judgment of the High Court which has reversed the judgment of acquittal passed by the Trial Court.
19. In the present case, accused has not probabalised his defence that he has issued the blank signed cheque Ex.P3 while availing loan under hire purchase agreement. The suggestions put to PW1 has been denied and no any material evidence has been brought on record in the cross-examination of PW1 and the accused has not chosen to lead any of his evidence. Therefore, under these circumstances, the finding of the Trial Court that after seizure of the vehicle in question, the hire purchase agreement comes to an end and the issuance of cheque
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CRL.A No.100281 OF 2015 Ex.P3 is not for legally enforceable debt cannot be legally sustained.
20. In the aforementioned judgment of this Court in M/s.Shriram Transport Finance Company ltd. Vs. Eshwarappa Naiker s/o.Bhuthappa case, it is held that the hire purchase agreement and the loan-cum- hypothication agreement are distinct and loan/hypothecation agreement contains specific clause regarding continuing guarantee. Therefore, it is not open for the accused to contend that he was not in due of the amount claimed by the complainant covered under the cheque Ex.P3.
21. Learned counsel for respondent has argued that GPA holder of complainant/company has no any authority to file the complaint. Complainant has produced power of attorney Ex.P1. The offence under Section 138 of the N.I. Act is based on documentary evidence and the personal knowledge of the transaction to the person who is giving evidence is not required. The employees of
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CRL.A No.100281 OF 2015 complainant/company may not continue work in the same branch and it cannot be expected that person who was present at the time of entering into the transaction alone has to be examined. Therefore, the evidence of PW.1 based on the GPA duly executed by the Company is a competent person to give evidence. The second contention of the accused is that no any notice for seizing the vehicle was given. It means that accused is admitting that complainant/company has seized the vehicle and it remained in possession of the complainant/company till it was sold in the year 2007 as elicited in the cross- examination of PW1. Therefore, the said contention also cannot be legally sustained. The third contention is that accused has given blank signed cheque as a security and the same has been misused by the complainant/company. It is specifically pleaded in the complaint that the accused issued cheque Ex.P3 dated 11.12.2012 for lawful discharge of debt. If any contrary defence is taken by the accused regarding misuse of cheque then the burden is on the accused to prove the said fact. However, the accused has
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CRL.A No.100281 OF 2015 not produced any of his evidence to prove the said fact nor has brought any material evidence during the cross- examination of PW1 to prove the said fact. The last contention is that the B register extract at Ex.D1 does not contain the name of accused as the RC owner. It is true that the name of complainant/company is appearing in the B register extract Ex.D1. When the accused has entered into loan-cum-hypothecation agreement for purchasing the vehicle, the name of financier will be appearing in the B register extract. It is only after discharge of the loan, the name of the purchaser will be entered. Indisputably, accused has not repaid the entire loan amount with interest and he was in due to the amount covered under cheque Ex.P3. Therefore, the said contention also cannot be legally sustained.
22. When the accused has failed to probabilise his defence then, in view of statutory presumption available in favour of the complainant in terms of Sections 118 and 139 of the N.I. Act, it will have to be drawn that complainant has proved that accused has issued the cheque in question
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CRL.A No.100281 OF 2015 Ex.P3 in lawful discharge of debt. The contrary finding recorded by the Trial Court cannot be legally sustained.
23. Now coming to the question of imposition of sentence. The transaction between the complainant and accused is arising out of loan-cum-hypothication agreement for purchasing the vehicle bearing No.KA-35/7114. Accused has committed default in making repayment of loan with interest as agreed. Accused was a customer of complainant/company and previously also availed loan. Accused has withheld the money due to the complainant and it is a public money. In view of the facts and circumstances, if accused is sentenced to pay a fine of Rs.13,18,000/- and in default of payment of fine to undergo simple imprisonment for one year is ordered, will meet the ends of justice. Consequently, proceed to pass the following :
ORDER Appeal filed by appellant/complainant is hereby allowed.
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CRL.A No.100281 OF 2015 The judgment of Trial Court on the file of Additional Civil Judge and JMFC, Hosapete in C.C.142/2013 dated 5.10.2015 is hereby set aside.
Accused is convicted for the offence under Section 138 of the N.I. Act.
Accused is sentenced to pay a fine of Rs.13,18,000/- and in default of payment of fine, shall undergo simple imprisonment for one year.
In exercise of powers under Section 357(3) of Cr.P.C. out of the fine amount, an amount of Rs.13,13,000/- is ordered to be paid to the complainant as compensation and remaining amount of Rs.5,000/- is ordered to be defrayed as prosecution expenses.
Registry is directed to transmit the copy of this judgment along with the records to the Trial Court.
Sd/-
JUDGE rs