Karnataka High Court
Veeresh Finance Corporation vs Shivakumar on 15 March, 2018
Author: John Michael Cunha
Bench: John Michael Cunha
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 15TH DAY OF MARCH, 2018
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
CRIMINAL APPEAL NO.2557/2010 (A)
BETWEEN:
VEERESH FINANCE CORPORATION (R),
BY ITS PA HOLDER AND ASSISTANT
MANAGER, CHANABASAPPA
S/O REVANASIDDAPPA HAVARAGI,
AGE MAJOR, OCC:ASSISTANT MANAGER,
R/O BAGALKOT, TQ & DIST:BAGALKOT.
... APPELLANT
(BY SRI.JAGADISH PATIL, ADV.)
AND:
SHIVAKUMAR S/O SANGAPPA BADADALI,
C/O M/S MAHANTESH FERTILIZER.
AGE MAJOR, OCC:BUSINESS.
B.V.V.COMPLEX, BAGALKOT.
...RESPONDENT
(BY SRI.H.M.DHARIGOND, ADV.)
THIS APPEAL IS FILED UNDER SECTION 378(1) OF CR.P.C.
SEEKING TO SET ASIDE THE ORDER PASSED BY THE LEARNED I
ADDL. J.M.F.C. COURT, BAGALKOT IN C.C.NO.203/2006 DATED
15.12.2009.
THIS APPEAL COMING ON FOR HEARING THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
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JUDGMENT
The appellant has called in question the correctness and legality of the order passed by the I Additional JMFC, Bagalkot dated 15.12.2009 in C.C.No.203/2006, whereby the complaint filed by the appellant under Section 138 of Negotiable Instruments Act (hereinafter referred to as the 'Act') has been dismissed and the respondent (hereinafter referred to as the 'accused') is acquitted of the offence punishable under Section 138 of the Act.
2. The case of the complainant is that it is a partnership firm carrying on money lending business. On 06.01.1998 the accused borrowed a loan of Rs.50,000/- from the complainant-firm for his fertilizer business. In repayment of the said loan, he issued a cheque bearing No.180903 dated 21.04.2003 drawn on State Bank of Mysore Bagalkot for Rs.50,000/-. The said cheque when presented for encashment came to be 3 dishonoured for the reason 'funds insufficient'. The complainant issued a legal notice on 03.05.2003. It was served on the accused on 06.05.2003. The accused neither complied with the demand made therein nor chose to reply to the said notice. Hence, the complainant sought action against the accused under Section 138 of the Act.
3. On service of summons, the accused faced trial. The Assistant Manager of the complainant-firm examined himself as PW.1 and produced in evidence the original cheque as per Ex.P.1, bank endorsement as per Ex.P.2, copy of the legal notice as per Ex.P.3, postal acknowledgment as per Ex.P.4, copy of GPA as per Ex.P.5 and the postal receipt as per Ex.P.6. In rebuttal, the accused examined himself as DW.1 and produced the certificate issued by Vars Builders Private Limited. 4
4. On considering the above evidence, the learned Magistrate was of the opinion that the complainant failed to prove that the cheque in question was issued by the accused in discharge of the legally recoverable debt. In arriving at this conclusion, the trial Court took note of the evidence of PW.1, wherein he admitted that he is not in possession of any documents to substantiate the alleged loan borrowed by the accused. The trail Court also took note of the fact that the complainant failed to prove the service of the legal notice on the accused and consequently dismissed the complaint and acquitted the accused of the charge under Section 138 of the Act.
5. I have heard the learned counsel appearing for the petitioner. Learned counsel for the respondent is absent.
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6. Learned counsel appearing for the petitioner would submit that the learned Magistrate has committed serious error in acquitting the accused. The learned Magistrate has misread the evidence and has failed to take into consideration the admission made by the accused that the signature contained in the cheque is the signature of the accused. The accused did not dispute the issuance of the cheque. Under the said circumstances, presumption under Section 139 of the Act was required to be drawn in favour of the complainant. Instead, the learned Magistrate acquitted the accused on the ground that the complainant failed to prove the debt. It is the submission of the learned counsel that the issuance of the cheque having been proved, the trial Court ought to have presumed that the said cheque was issued in discharge of the legally recoverable debt. Hence, there is patent error and 6 illegality in the impugned judgment which calls for interference by this Court.
7. I have considered the submissions of the learned counsel for the petitioner and have carefully examined the records.
8. Before the presentation of the complaint, the complainant is seen to have issued a legal notice to the accused the copy of which is marked as Ex.P.3. In the said notice it was specifically stated that the accused had borrowed a loan from the complainant-firm and in repayment thereof he issued the cheque dated 21.04.2003 for Rs.50,000/-. The said notice is blissfully silent about the date of the alleged loan or the quantum of the amount borrowed by the accused. But during his evidence before the Court, PW.1-the Assistant Manager of the complainant-firm deposed that the accused borrowed a loan of Rs.50,000/- on 06.01.1998 and in 7 repayment thereof he issued the cheque in question on 21.04.2003. When PW.1 was questioned in the cross- examination as to whether the firm was in possession of any document to substantiate the said loan transaction, PW.1 unequivocally admitted that the firm is not in possession of any documents in proof of the availment of the loan by the accused as stated by him in his chief- examination. If in fact, the accused had borrowed the loan on 06.01.1998 as stated by PW.1 in his evidence, nothing prohibited the complainant to state the said fact in the notice issued to the accused at the earliest point of time. The accused having denied the transaction, the complainant appears to have come up with the story that the cheque in question was issued towards discharge of the loan borrowed by the accused. No doubt, the accused has admitted in the cross- examination that the cheque Ex.P.1 bears his signature, 8 but it does not mean that he owed a sum of Rs.50,000/- to the accused.
9. The trial Court having considered this aspect has rightly come to the conclusion that the complainant has failed to prove that a sum of Rs.50,000/- was due and payable to the complainant-firm by the accused as on the date of the issuance of the cheque. PW.1 has even gone to the extent of stating that the complainant- firm has not maintained any ledger in proof of the loan transaction between the complainant and the accused. On the other hand, he has stated that the complainant- firm has advanced other loans to the tune of Rs.3 lakhs to the accused. If so, the complainant certainly should have maintained the documents in respect of the various other loans said to have been advanced to the accused. The accused has taken up a specific plea that he did not borrow loan of Rs.50,000/- on 16.01.1988. He has stood by the statement even in his evidence and the 9 complainant could not demolish the testimony of the accused in this regard.
10. Even with regard to the service of notice, the accused took up a specific plea that the said legal notice was not served on him. He has specifically denied the signature on the acknowledgment Ex.P.4. Even on bare comparison one could see striking difference in the signatures found on the cheque and the postal acknowledgement Ex.P.4. Even otherwise, the complainant having failed to prove that the said notice has been duly acknowledged by the accused, there was absolutely no cause of action for the complainant to proceed against the accused under Section 138 of the Act.
11. The trial Court has considered all the above facts and circumstances of the case. The findings recorded by the trial Court that the complainant has 10 failed to substantiate the debt is based on the legal evidence available on record. I do not find any error or infirmity in the findings recorded by the trial Court. Even on reappreciation of the evidence, I do not find any reason to differ with the view taken by the learned Magistrate. The evidence produced by the prosecution, in my view, is not sufficient to hold that the accused owed a sum of Rs.50,000/- to the accused as on the date of the issuance of the cheque. No doubt, the presumption is attached to the cheque but the foundational fact is required to be established by the complainant that as on the date of the issuance of the cheque a recoverable debt was in existence and in discharge of the said debt, the said cheque was issued by the accused. The complainant having failed to substantiate the foundational fact, no presumption can be drawn in favour of the complainant. The trial Court was therefore justified in not drawing the presumption in 11 the fact situation of this case. I do not find any reason to interfere with the impugned judgment. The appellant has failed to make out any ground for interference in the impugned judgment. The appeal being devoid of any merit is liable to be dismissed and accordingly the same is dismissed.
Sd/-
JUDGE Sh