Karnataka High Court
The Bidar Urban Co-Operative Bank ... vs Mr.Girish S/O Late Gunderao Kulkarni on 17 December, 2020
Author: P.N.Desai
Bench: P.N.Desai
1
R
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 17th DAY OF DECEMBER, 2020
BEFORE
THE HON'BLE MR.JUSTICE P.N.DESAI
CRIMINAL APPEAL No.200057/2016
BETWEEN:
The Bidar Urban Co-operative,
Bank Ltd., Hyderabad Road, Bidar
Represented by its Branch Manager,
Shri. Kalyanrao Malge.
...APPELLANT
(BY SHRI. K.M.GHATE ADVOCATE)
AND:
Mr.Girish S/o Late Gunderao Kulkarni,
Age: 48 years, Occ: Agriculture & Business,
R/o Village Chintalgera, Tq: & Dist: Bidar
... RESPONDENT
(BY SRI. HANMANTHRAYA SINDOL ADVOCATE)
This Criminal Appeal is filed under section 378 (4)
& (5) R/w sec.386 of Criminal Procedure Code, praying
to set aside the impugned judgment of acquittal
dated:01-02-2016 passed by the I Addl. Civil Judge &
JMFC-II Bidar in C.C No.826/2008 and thereby convict
the respondent/accused for the offences punishable
under sections 138 & 142(b) of Negotiable Instrument
Act in the interest of justice and equity.
This Criminal Appeal having been heard,
reserved for judgment and coming on for
pronouncement of judgment this day, the Court
delivered the following;
2
JUDGMENT
This appeal lays challenge to the Judgment of acquittal passed by the learned I Addl. Civil Judge (Jr.Dn.) & JMFC-II Bidar (hereinafter referred for short as Trial Court) in C.C. No.826/2008 dated: 01-02-2016 for the offence punishable under Section 138 of Negotiable Instrument Act 1881.
2. The appellant was the complainant and the respondent was the accused before the trial court. For the purpose of convenience the appellant and respondent will be referred as complainant and accused as per their respective ranks before the trial court in this Judgment.
3. The appellant/complainant filed complaint under section 200 of Code of Criminal Procedure before the J.M.F.C Court alleging that, the accused has committed an offence punishable under section 138 of 3 Negotiable Instrument Act 1881 (Hereinafter referred for short as "N.I Act".)
4. It is the case of the complainant that, the complainant is co-operative Bank involved in Banking business. The accused is a member of complainant- Bank and availed loan from the Bank, but failed to repay the same. When the complainant-Bank approached accused and insisted for payment of dues, he issued cheque bearing No.022627 dated: 24-05-2007 for Rs.3,28,000/- drawn in favour of the Bank. The said cheque was presented through its banker D.C.C Bank Bidar, but it was returned dishonoured with endorsement that funds "insufficient". An intimation in this regard was received on 10-07-2007. Then the complainant-Bank issued demand notice on 30-07- 2007. The accused did not reply the aforesaid notice, nor repaid the amount. Hence the complaint was lodged.
4
5. The accused appeared before the trial court. The trial court put the substance of accusation to accused and recorded the plea of accused. The accused pleaded not guilty and claimed to be tried.
6. The complainant-Bank got examined its Manager Mr. Kalyan Rao Malge as PW.1 and also got examined another witness as PW.2 and got marked five documents as per Ex.P.1 to Ex.P.05 and closed its side evidence.
7. The statement of accused as required U/sec.313 of Code of Criminal Procedure was recorded. The accused denied the incriminating circumstances appearing in the evidence of prosecution witnesses. The accused got examined himself as DW.1, produced two documents as Ex.D.1 & Ex.D.2 and closed his side evidence.
5
8. After hearing arguments, the learned trial court acquitted the accused for the offence punishable under Section 138 of N.I Act.
9. Aggrieved by the said acquittal, the appellant/complainant has preferred this appeal on the following grounds:--
a) that the trial court has not properly appreciated the oral and documentary evidence produced by the complainant in proper perspective.
b) the trial court has considered only some technical defense taken by the accused and acquitted him which is not correct. The accused has admitted that his father had taken loan of Rs.1,50,000/- and accused issued cheque along with interest for Rs.3,20,000/-.
c) the issuance of cheque and signature are not disputed.6
d) Once the accused admitted the liability of his father to repay the loan amount with interest then he is liable to pay the amount.
e) the death of father of the accused has no consequence in view of section 25(3) of Indian Contract Act, the issuance of cheque by the accused saved Limitation for the recovery proceedings by the complainant-Bank.
f) the trial court has wrongly came to the conclusion that though the legal notice issued to all the legal heirs, but the case is filed only against this accused. The service of said notice is not disputed. The ingredients of section 138 of N.I Act are quite independent once having admitted issuance of cheque, there is a presumption under section 139 of the N.I Act.
The learned trial court Judge has committed grave error in acquitting the accused without considering the said aspect.
7
With these main grounds the complainant has prayed to set aside the Judgment of acquittal and convict the accused.
10. Heard Sri.K.M.Ghate learned counsel for the appellant/complainant and Sri.Hanmanthraya Sindol learned counsel for accused/respondent.
11. The learned counsel for appellant argued that, the issuance of cheque by the accused is admitted. The cheque was presented and it was returned with endorsement funds 'insufficient'. The cheque amount is for Rs.3,28,000/-. The legal notice is served on accused. The availment of loan by the father of the accused is admitted. So for future liability the said cheque is issued. Accused has undertaken to discharge all the liability of his father. Now accused cannot contend that, his liability is only to the extent of his 1/3rd share of Rs.1,50,000/- i.e., only Rs.50,000/- as there were three legal heirs. Such a contention is not permissible now. 8 The accused is educated person, he himself has voluntarily issued cheque. There is no force or undue influence on him for issuance of the cheque. Now accused is estopped from contending contrary to what has been stated by him once cheque is issued knowing fully its consequence. The offence under section 138 of N.I Act is committed if the cheque is returned with endorsement as funds "insufficient" or "exceed arrangements". The accused cannot contend that, the other legal heirs are also liable, when once he has issued cheque. The cross-examination of PW.1 does not take away the right of the Bank to recover the said amount. The president of the Bank is also examined as PW.2 wherein his evidence indicates that, it is the legally enforceable debt. Even otherwise as per Section 25(3) of Indian Contract Act 1872 the accused is liable. There is also pious obligation on accused to discharge his father's debt. It is not required under section 138 of N.I Act that each and every particulars is to be stated 9 in the complaint. What is required is only liability i.e., is to be stated. When once liability is admitted, issuance of cheque, issuance of notice are admitted and payment of Rs.50,000/- is admitted, then the trial court has wrongly acquitted the accused. In support of his arguments the learned counsel relied upon the decision of Hon'ble Supreme Court reported in 1) (2016) 3 SCC 1 in case of Don Ayengia Vs State of Assam and another relevant para No.11 and another decision reported in 2013 SAR Crl. 374= 2013 (2) Scale 368 (Head Note D) in case of Vijay Vs Laxman and another.
With these main arguments the learned counsel for appellant prays to convict the accused by setting aside the Judgment of acquittal.
12. As against this, the learned counsel for accused/respondent argued that, if the averment of the complaint, legal notice and the examination in chief of PW.1 are considered, it is evident that, all along it is 10 stated by the complainant-Bank that the loan is availed by the accused which is admittedly not true or proved. PW.1 himself has admitted that accused has not at all availed any loan. So the averments made in the complaint, statutory legal notice and examination in chief has no basis at all as they are contrary and inconsistent to the evidence placed before the Court. When the accused has not at all obtained any loan then there is no liability on the accused to pay any amount. The learned counsel further argued that, as per the Bank, the loan was availed by the accused. As per the evidence produced before Trial Court the loan was availed by the father of the accused in the year 2001. The total loan amount was Rs.1,50,000/-. The father of accused died in the year 2004. He had two sons, one daughter and a wife. There are four legal heirs to deceased father of accused. Therefore, the arguments of the complainant that the liability is only on this accused as pious obligation is not tenable so as to convict the 11 accused under section 138 of N.I Act. Further no documents or statement of Bank account in respect of said loan are produced to show that, what was the exact amount borrowed and what was payable. Therefore, in the absence of any such oral or documentary evidence in support of the complainant's case, the trial court has rightly appreciated the evidence in a proper perspective and acquitted the accused. There is no error or illegality in the Judgment of the trial court. The learned counsel supports the Judgment of the trial court and prays to dismiss the appeal.
13. I have perused the Judgment, records of the trial court and appeal Memo and the decision relied on by the learned counsel for the appellant/complainant.
14. From the above materials, evidence and arguments the point that would arise for my consideration are as under:-
12
01. Whether the impugned Judgment is perverse, illegal and not based on well settled principles regarding appreciation of evidence in cases arising out of dishonour of cheque commonly known as "Cheque Bounce case" under section 138 Negotiable Instrument Act 1881?
15. My answer to the above point is in negative for the following reasons.
16. The complainant in his written complaint filed before the Trial court has mentioned that, the accused being a member of the complainant-Bank availed loan, from the complainant-Bank. But he failed to repay the same. It is further mentioned that, when the complainant-Bank approached the accused and insisted for repayment of the loan he issued a cheque in question on 24-05-2007 for Rs.3,28,000/- drawn in favour of the complainant-Bank, as the aforesaid 13 cheque was dishonoured, complainant-Bank issued demand notice to the accused. In the examination-in- chief affidavit filed by PW.1 Mr.Kalyanrao Manager of complainant-Bank it is stated that the accused has availed loan from complainant-Bank. But his cross- examination reveals that, the contents of the written complaint and his evidence affidavit are not true. PW.1 has clearly admitted in his cross-examination that he cannot say the account number of the accused loan account. PW.1 has also admitted that there is no loan account of the accused in their Bank. This admission itself indicates that, the complainant-Bank has filed this case taking false contention that accused has borrowed the loan. The said PW.1 further admitted that, the accused father had taken the loan. PW.1 has also admitted that in the legal notice i.e. Ex.P.4, the complainant-Bank has mentioned that accused has taken the loan. PW.1 has also admitted that in the notice, complaint and his evidence it is mentioned that, 14 the said cheque was issued by accused for discharge of the loan borrowed by accused from Bank. When admittedly there is no debt or loan borrowed or standing in the name of the accused with complainant-Bank, filing this type of complaint and issuing notice stating that, accused had borrowed the loan from the complainant Bank and said cheque was issued for discharge of said loan are all false contentions. PW.1 has further stated in his cross-examination that, in the year 2001 the father of the accused had borrowed the loan and the father of the accused died in the year 2004. The said aspects are not at all mentioned either in the complaint or in the evidence or in the statutory legal notice. Therefore, such a complaint is not at all maintainable to prove offence under section 138 of N.I Act. The said statutory notice is also not a valid notice so as to attract the ingredients of section 138 of N.I Act. 15
17 . PW.1 has stated in his cross-examination that, the father of the accused had borrowed Rs.1,50,000/- No account extract in respect of said loan was produced. PW.1 has also admitted that, he do not know when the death of the father of the accused came to their knowledge. PW.1 has also admitted that, Ex.P.1 cheque is related to accused father loan. PW.1 has also stated that, he do not know how many legal heirs to the accused father. He has also admitted that, Bank has not produced any Bank statement or record to show that the accused father was due a sum of Rs.3,28,000/- PW.1 has admitted that the documents executed by the father of the accused were in the Bank. But they are not produced before Court. He has admitted that, complainant has sent legal notices to accused, one Rajesh and another Dr. Geeta. PW.1 has also stated that said notice were issued more than three years after the death of the father of the complainant. PW.1 has admitted that, the accused after receipt of the notice 16 came to the Bank and met them. But complainant Bank has not taken any document in writing from the accused stating that, accused is liable for the loan of his father. PW.1 has no documents to show that, accused and others have come to the Bank and admitted the loan of their father and their liability. PW.1 do not know when the father of the accused died. PW.1 has also admitted that, the accused has not given cheque in his hand and he do not know how that, cheque came into the possession of complainant-Bank. PW.1 do not know whether the writings in Ex.P.1 cheque are that of the Bank officials or not. PW.1 has stated that, as on 31-03-2004 the principle loan amount was Rs.1,50,000/- and the interest was Rs.89,938/-. So, why and how this cheque for Rs.3,28,000/- was issued as the amount due is not forthcoming. PW.1 has also admitted that, the Bank has not taken any steps to recover the loan during the lifetime of the father nor they have produced any notice issued to him. PW.1 has 17 admitted that, he knew very well that the accused father is no more and the loan is that of accused father but not accused. Inspite of that, complainant has not mentioned these facts in the written complaint filed before Court. PW.1 changes his version before Court in cross-examination and deposed that, accused gave a cheque stating that he will pay the loan of his father. When the accused is admittedly not the member of the Bank, nor he has borrowed the loan amount, the question of this accused paying the time barred debt or loan amount of his father does not arise. PW.1 has admitted that, the earlier Manager had been to the house of the accused and asked them to give a cheque for the present and thereafter they can discussed about their father loan. PW.1 has expressed his ignorance that a blank cheque was taken from accused by Bank officials. A suggestion was made in cross-examination that the accused father had three legal heirs. As Rs.1,50,000/- was the loan this accused on his own 18 voluntarily, graciously has paid Rs.50,000/- as his share on 26-11-2014. But the same is not mentioned in his affidavit evidence.
18. On entire reading of the evidence of the complainant-PW.1 and the statutory legal notice/Ex.P.3 it is evident that, this complaint was filed as if the accused has borrowed the loan and in discharge of the said loan accused issued the Ex.P.1-cheque. Loan borrowed by the father of the accused had admittedly become time barred long back. Without mentioning the true and correct facts and suppressing the true facts this complaint was filed making a false allegation against the accused. Even the contents of the notice are false. Therefore no statutory presumption under N.I Act can be raised in favour of the complainant-Bank when a false contention is taken and true facts are suppressed before the Court.
19
19. The complainant has examined one more witness Mr. Mohammed Salim as PW.2. He has given totally new version contrary to the written complainant contents and evidence of PW.1 before the trial court. It appears that, the complainant-Bank came to know that the averments in the complaint, evidence of PW.1 and notice are not true when the PW.1 was cross-examined by the accused side. In order to make out some case and fill up lacuna in their case this PW.2 is examined. PW.2 has stated in his evidence that, the accused and his family members voluntarily agreed to make the payment. He states that, the accused personally came to the Bank when the notice was issued in the year 2007 and issued cheque in favour of the Bank. In his cross-examination PW.2 admitted that, the accused father was a leader and he was financially sound person. PW.2 clearly admitted that, he do not know which type of loan was given to the father of the accused. PW.2 does not know whether in the 20 complainant legal notice and in the evidence of the complainant /PW.1 whether it was stated that the accused had borrowed the loan. PW.2 also stated that, the accused has not at all admitted that, he will pay the entire amount of his father. PW.2 does not know whether the writings in Ex.P.1-cheque are that of accused or not. PW.2 has also admitted that, complainant-Bank has not taken any steps against the mother of the accused or other legal heirs. PW.2 further stated that, the accused has not borrowed the amount as shown in Ex.P.1. Therefore entire evidence of PW.1 and PW.2 cuts the very root of the case and ingredients of section 138 of Negotiable Instrument Act are not all made out. The complainant-Bank has failed to discharge initial burden casted upon it.
20. Against this the accused has given his defense evidence as DW.1. Accused has stated in his evidence that, he has not borrowed any loan amount 21 from the Bank, nor he has given cheque for Rs.3,28,000/-. Accused further stated that, after the death of his father the President and Manager of the complainant-Bank came to his house and informed that, Rs.1,50,000/- loan was taken by his father. Then accused voluntarily told them that, there is one more brother and a sister to him. He will pay his share of Rs.50,000/-, Bank officials took a blank cheque and stated that they will decide in this regard in the Bank meeting. But surprisingly he came to know that the said cheque was filled by Bank employees for Rs.3,28,000/- and a false case has been filed. DW.1 was cross- examined at length. Accused has denied suggestions that he is the karta of the family and he is liable to pay the amount which is new case made out in cross- examination. DW.1 has denied suggestion that, he has admitted his liability to pay the entire amount. Accused has stated that, the Bank official have cheated him and by playing fraud on him the Ex.P.1-cheque was 22 obtained. Evidence of DW.1 clearly rebutted presumption if any on issuance of cheque and prove that, case filed by the complainant is not tenable in the eye of law.
21. On perusal of the evidence of the complainant and defense evidence of accused it is evident that, the complainant has lodged this complaint by pleading false contention that the accused has borrowed the loan. The statutory legal notice was also issued stating that, accused has borrowed the loan and Ex.P.1-cheque issued in discharge of the said loan was dishonoured. The complainant has also contended in written complaint that, the accused issued the cheque in discharge of his liability of borrowing the loan from complainant-Bank. In fact the evidence of the Manager of the Bank /PW.1 is also to that effect which is admittedly not true. Now complainant Bank has totally given 'U' turn to the contents of the complaint and legal 23 notice, in cross-examination of PW.1 stating that the accused being a Karta of the family has admitted the loan borrowed by his father and for discharge of that loan he has issued the cheque which is not their case at all. The party cannot be permitted to plead one case in complaint evidence and document and try to take shelter in cross-examination taking totally new stand which is not pleaded. No Bank statements or account extract in respect of loan was produced to show that, what was the loan borrowed by accused father, what was the amount due, what is the basis for arriving at a figure of Rs.3,28,000/- as amount due, is not forthcoming. In fact according to the complainant/PW.1 the loan was of the year 2001. So it has already become time barred long back. The father of the accused died in the year 2004. If at all there was any such loan it has become time barred during his life time only. Defense evidence of accused totally falsify the case of the complainant. The slightest presumption even if any 24 for issuance of cheque, stood clearly rebutted by accused defense evidence apart from rebutting the same though cross-examination of PW.1 and PW.2.
22. It is necessary to refer principles of law stated by High Courts and Hon'ble Supreme Court for appreciating the evidence in this type of cases. In a decision reported in KCCR 2009 (3) 1273 in case of P.Sathnarayan Vs Jaiteerth this High court held that, when the complainant being guilty of suppression of true facts he is not entitled for penal action against the accused. In para 10 it is held as under: -
10. As held by the Apex Court in the decisions referred to above, complainant is expected to lay absolute proof without any scope for doubt. The documents produced by the accused in the instant case are enough to show by preponderance of possibilities that the transaction was not as stated by the complainant but it was between complainant's father and the accused. In such circumstances, the complainant being guilty of suppression of these facts, would not be entitled to penal action against the accused. Moreover, Section 138 being penal and consequence being sentence of imprisonment, stricter proof is required. I notice no such proof of allegations in the complaint. The trial court has misapplied the evidence of the accused and had a negative approach while appreciating evidence.25
In this case also there is total suppression of facts by complainant.
23. When there is no debt or liability exists, then the said cheque amount will not become legally recoverable debt or other liability, the offence under section 138 of Negotiable Instrument Act will not sustain. In this regard there is decision of this High Court reported in 2018(2) AKR 440 in the case of Branch Manager, PCA & RD Bank Ltd., Belthangady vs. Suresh Ganapathi Das wherein at para-6 it is held as under:
"6. On hearing the learned counsel for the parties and on evaluating the material on record, I find that there is no illegality committed by the Trial Court, which calls for interference. It is to be seen that the cheque was not issued by the accused - respondent towards a legally recoverable debt. It was issued as a security for the loan which he had borrowed from the complainant. This is further fortified by the judgment relied on by the counsel for the appellant himself in Sampelly Satyanarayana Rao (supra), which reads that, "If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise."
Hence, it is proved that as on the date of issuance of the blank cheque, there was no legal liability of the accused to pay any amount to the complainant, which is evident from the evidence of PW-1 the Manager of the bank himself. Further, the complainant - Bank has 26 also not produced any account extract relating to the loan account of the accused."
24. The learned counsel for the complainant tried to make out a case under section 25 (3) of the Indian Contract Act 1872 stating that as the accused issued the cheque it amounts to admission on the part of the accused to pay the time barred debt. But such a contention is not legally tenable. It is not the case of the complainant or the evidence of PW.1 or contents of the legal notice that the cheque was issued in discharge of father's debt or liability. There is no undertaking or document executed by accused promising to pay time barred debt or liability of his father. The learned counsel also argued that, it is also the pious obligation on the part of the accused to pay the debt of his father. Hindu Law states that, there is a pious obligation on the sons, grand sons and great grand sons to pay ancestors debt to the extent of their interest in the joint family property. But the said liability is not a personal one. 27 The father's creditor is not entitled to proceed against the person or the separate property of children it is limited to the interest in the joint family property. The learned Author Mulla Hindu Law by Sir.Dinshaw Fardunji Mulla, 22nd Edition at page No.441 considered the duration of the liability. It is observed as under by the learned author.
Duration of liability:- The pious obligation of the sons to pay the father's debts lasts only so long as the liability of the father subsists. If the debts are saved from limitation by the father's acknowledgment, the sons is bound to pay, even though the acknowledgement by the father is after a partition between the father and the son. The son's liability is neither joint nor joint and several, as those terms are ordinarily understood in English law.
25. The accused herein is not the only legal heir of his father, nor it is shown that, he has inherited any property of father. The said obligation even if any was not within the period of limitation. It is only a moral obligation and the liability if any is at the most civil liability on the legal heirs of the deceased if the time 28 barred debt was acknowledged by their father. PW.1 admits that loan was of the year 2001. The father of accused died in the year 2004. So the said loan had become time barred long back. The provision of Section 25(3) of Contract Act are not at all attracted to this case. Therefore viewed from any angle if the contents of the complaint and the oral and documentary evidence are considered then no case is made out to show that there was any legally recoverable debt or liability on the part of the accused or accused is liable for any panel action under section 138 of N.I Act.
26. The learned counsel for appellant relied on decision of Hon'ble Supreme Court reported in (2016) 3 SCC 1 in case of Don Ayengia Vs State of Assam and another at para No.11 it is held as under:
11. We have no hesitation in answering that question in the affirmative. The facts as narrated above and as held proved by the trial Court and the appellate court, leave no manner of doubt, that Nazimul Islam had received an amount of rupees ten lakhs from the complainant in connection with the agreement executed between the two. It is also not in dispute that upon termination of the 29 agreement, the amount paid to Nazimul Islam was refundable to the complainant and that Nazimul Islam had agreed to refund the same within one month. The promissory note executed by Nazimul Islam contained an unequivocal acknowledgment of not only the debt/liability aforementioned but promised to liquidate the same within one month with interest at the bank rate. Five cheques handed over were to be returned but only upon payment of the amount in question. Such being the fact situation, it cannot be said that the cheques had nothing to do with any debt or other liability. As a matter of fact, the existence of the debt or liability was never in dispute. On the contrary, it was acknowledged by Nazimul Islam who simply sought one month's time to pay up the amount. The cheques were post dated, only to give to the drawer the specified one month's time to pay the amount. There is thus a direct relationship between the liability and the cheques issued in connection therewith. Thus far there is no difficulty.
27. The fact of that case and principles stated above have no application to this case. Because in that case the promissory note was executed and it contained unequivocal acknowledgement of not only debt or liability and cheques were issued relation to continuing contractual business. The Hon'ble Supreme Court at para No.13 has clearly held that, the existence of debt or liability was never in dispute and there was acknowledgement and promise made to pay within one 30 month, failure on the part of debtor the cheques were to be presented for payment of the said debt. There was endorsement made on the promissory note that the cheque can be presented for acknowledgment after stipulated date. So in view of that endorsement the accused was held liable. But herein this case there is no debt or liability either determined or acknowledged to be payable. The loan was neither borrowed by accused as contended in the complaint, in the legal notice, nor accused has given any express undertaking or promised to pay any time barred debt liability of his father. Accused is under no legal obligation in this case to pay any debt of his father. The question payment of time barred debt was neither pleaded nor involved. The said decision is not on the point of Section 25(3) of the Indian Contract Act 1872.
28. The learned counsel for appellant relied upon another decision of Hon'ble Supreme Court reported in 31 2013 SAR Crl. 374= 2013 (2) Scale 368 in case of Vijay Vs Laxman and another. On perusing the said Judgment it is evident that, the said principles and facts in that case goes against the complainant. In that case, since there were glaring inconsistencies in the complainant's case, the conviction was set aside holding that the defense version succeeded in dislodging the complainant's case on the strength of convincing evidence and discharging the burden envisaged under sections 118(a) and 139 of N.I Act. So the principles stated in the above decision goes against the complainant. In fact in the said decision at para No.12 relying on the decision of P. Venugopal Vs Madan P.Sarath (2009) 1 SCC 492 held that under sections 139, 118(a) and 138 of Negotiable Instrument Act existence of debt or liability shall proved in the first instance by complainant, thereafter the burden of proving contrary shifts on the accused. Here in this case the complainant has totally failed to prove the 32 existence of any debt or any other liability by the accused when the said contention is neither pleaded in the complaint and notice, nor the evidence is led. Therefore the said decisions are also not helpful to the complainant argument.
29. The contention of learned counsel for complainant that, there is no bar under law to repay the time barred debt and it is not open to the drawer of the cheque to contend that he is not liable as the debt was time barred is also not tenable as such contention is either pleader or any legally admissible evidence was led by complainant-Bank. Such time barred debt cannot be called as legally recoverable debt so as to attract penal provision under section 138 of N.I Act. In this regard it is necessary to refer the principles of law stated by Hon'ble Supreme Court and other High Courts. 33
30. The Kerala High Court in a decision reported in 2001 Crl.L.J 24 in case of Sasseriyal Joseph Vs Devassia, held that section 138 of the Act is attracted only if there is legally recoverable debt and it cannot be said that time barred debt is legally recoverable debt. The said Judgment rendered by Kerala High Court in Sasseriyil Joseph's case was challenged before the Hon'ble Supreme Court in Special Leave to Appeal (Crl.) No.1785/2001 by Hon'ble Supreme Court by Judgment dated:10-09-2001 affirmed the said view of Kerala High Court and it is held as under:
"We have heard learned counsel for the petitioner. We have perused the judgment of the High Court of Kerala in Criminal Appeal No. 161 of 1994 confirming the judgment/order of acquittal passed by the Addl. Sessions Judge, Thalassery in Criminal Appeal No. 212 of 1992 holding inter alia that the cheque in question having been issued by the accused for due which was barred by limitation the penal provision under Section 138 of the Negotiable Instruments Act is not attracted in the case.
On the facts of the case as available on the records and the clear and unambiguous provision in the explanation to Section 138 of the Negotiable Instruments Act the judgment of the lower 34 appellate Court as confirmed by the High Court is unassailed.
Therefore, the special leave petition is dismissed.
(underline by me)
31. The said decision of Kerala High Court which is confirmed by the Hon'ble Supreme Court in Special Criminal Appeal No.1785/2001 dated: 10.09.2001 was referred by the learned single Judge of this High Court in Criminal Appeal No.545/2010 dated: 28-02-2014 in case of K.V.Subba Reddy Vs N. Raghava Reddy and considering the material discrepancies in the evidence adduced by the complainant and also having regard to the question of limitation held that, the complainant has failed to prove the case and acquittal of the accused for offence under section 138 of N.I Act was confirmed. In the above case also dishonour of cheque issued to discharge time barred debt was in question.
32. Further the High Court of Andhra Pradesh in case of Girdhari Lal Rathi Vs P.T.V Ramanujachari 35 and another reported in 1997 (2) Crimes 658 held that, in case of cheque issued for time barred debt which is dishonoured the accused cannot be convicted under section 138 of Negotiable Instrument Act on the ground that the debt was not legally recoverable.
33. The High Court of Gujarath in case of Jayanthilal Maganlal Brahmbhatt Vs State of Gujarat in Criminal Appeal No.35/2008 decided on 14-02-2013 referred the decision of Bombay High Court in case Smt. Ashwini Santosh Bhatt Vs Jeevan Divakar and also the Judgment of the Hon'ble Supreme Court in case of Krishna Janardhan Bhat Vs Dattatraya G Hegde reported in 2008 (4) SCC 54 wherein at para No.13 it is held as under:
Thus, for the purpose of falling within the ambit of Section 138 of the Act, one of the ingredients which is required to be satisfied is that there is legally enforceable debt. In the facts of the present case, as noted earlier, the amounts in question had been paid during the period 1991 to 1997, under the circumstances, the period of limitation which is three years had clearly expired by the end of the year 2000. Therefore, the cheques which were issued in the year 2002, evidently were issued in respect of 36 time barred-debts. In view of the explanation to section 138 of the Act, a debt or liability referred to in section 138 of the Act means a legally enforceable debt. Under the circumstances, even if the case of the complainant is accepted that such cheques had, in fact, been issued by the accused towards a debt of Rs.42 lakhs, even then, the same would be relatable to a time barred debt and, therefore, cannot be said to have been issued in respect of a legally enforceable debt. The provisions of section 138 of the Act would, therefore, not be attracted in the facts of the present case.
(under line by me) So, in view of the above discussion and decision of the Kerala High Court in Sasseriyal Joseph referred supra which was confirmed by the Hon'ble Supreme Court on the specific question of limitation the contention of the complainant is not tenable.
34. The High Court of Madras in case of M.P Farooq Vs K. Sasikumar decided on 16-12-2019 in Appeal Nos.4088/2018, 750/2017 in CS No.75/2017 and Crl.O.P No.27379/2016, Crl.M.P. No.13939 & 13940/2016 & 15581/2017 relying on the decision of Kerala High Court referred supra with regard to payment of time barred debt, held that there must be a distinct promise 37 to pay either wholly or in part of the same. Further the promise must be in writing either signed by the person concerned or by his duly appointed agent. To put in short, unless a specific contract in the form of novation is created with regard to payment of time barred debt, section 25(3) of the said Act cannot be invoked.
Therefore in view of the principles stated in those decisions the arguments of the learned counsel for the appellant that the said cheque can be construed as a promise to pay time barred debt is also not tenable.
35. The High Court of Delhi in a case of M/s Jage Ram Karan Singh and another Vs State and another in Criminal Revision No.82/2013 dated: 31-07-2019 reported in SCC OnLine Del 9486 relying on the Judgment of Vijay Polymers Pvt. Ltd. & another Vs Vijay Aggarwal 2009 (110) DRJ and the Judgment of Hon'ble Supreme Court in case of Sasseriyal Joseph referred (supra) held that, the responsibility of the 38 accused had already become time barred on the date of issuance of cheque. Relying on Judgment of Bombay High Court in case of Kamalaksha Laxman Prabhu Vs S.G.Mayekar reported in 2009(1) Crimes 195 (Bom.) at para Nos.25, 26 & 27 it is held as under:
25. A bare perusal of the aforesaid provision clearly goes on to show that for analyzing the limitation of a liability beyond a period of three years, the acknowledgment, if any, must be there before the period of limitation is over, which is not the case in hand.
26. Further, it has been held time and again by the Apex Court as well as by the various High Courts that mere giving of a cheque, without anything more, will not revive a time-barred debt, because cheque has to be given, as contemplated by the explanatory, in discharge of a legally enforceable debt. In this regard, it may be relevant to take note of the order dated 10.9.2001 relied upon by the learned counsel for the respondent No.2 titled Sasseriyil Joseph v.
Devassia (supra) wherein, in a similar case, it has been held by the Supreme Court that, a cheque which has been issued by the accused for a due which was barred by limitation, the penal provision under Section 138 of the NI Act is not attracted. The relevant observations made in this regard in the aforesaid judgment are reproduced hereunder: -
"We have heard .......
27. In Vijay Polymers Pvt. Ltd. & Anr. v. Vinnay Aggarwal (supra), relying upon the judgment of the Supreme Court in Sasseriyil Joseph (supra), it has been observed that, cheques issued for a time-barred 39 debt would not fall within the definition of 'legally enforceable debt', which is the essential requirement for a complaint under Section 138 of the NI Act; the extended meaning of debt or liability has been explained in the Explanation to the Section which means a legally enforceable debt or liability
36. The High Court of Bombay in a decision in case of Chander Mohan Mehta Vs William Rosario Fern Andes and another reported in 2008 SCC OnLine Bom 1590 : (2009) 4 BC 294 referring to its earlier decisions and decision of Madras High Court in case of N.Ethirajulu Naidu Vs K.R Chinnikrishnan Chettair AIR 1975 Madras 333 held at para Nos.7 & 8 as under:
7. In Narendra V. Kanekar v. Bardez Taluka Co-op Housing Mortgage (supra) this Court had also observed as follows "There appears to be preponderance of judicial opinion in support of the view that only if the cheque is issued in discharge of a legally enforceable debt or other liability that Section 138 of the Act is attracted but if a cheque is issued for the discharge of a time barred debt and it is dishonoured, the accused cannot be convicted under Section 138 of the Act. This view was first taken in Girdhari Lal Rathi v. P.T.V.
Ramanujachari (1997 (2) Crimes 658), then by this Court in the case of Smt. Ashwini Satish Bhat v. Shrijeevan Divakar Lolienkar (1999 (1) GLT 408) and Joseph v. Devassia (2003 K.L.T. (3) 533), and it appears that the last Judgment also has the 40 imprimatur of the Apex Court in Special Leave to Appeal (Cri) No.1785/2001, which was dismissed by Order dated 10.09.2001."
8. The same is the view in Jagadamba Parishar Sahakari Pat Sanstha Maryadit (supra), this Court had also observed that mere giving of a cheque without anything more will not revive a barred debt, because cheque has to be given, as contemplated by the explanation in discharge of a legally enforceable debt. In this context, reference to the Judgment of the learned Division Bench in N. Ethirajulu Naidu v. K.R. Chinnikrishnan Chettiar (supra) can again be made. The learned Division Bench has stated that what the Section 25(3) of the Contract Act requires is an express promise made in writing and signed by the person to be charged therewith. Nothing short of an express promise, therefore, will provide a fresh period of limitation. It is settled law that an implied promise is not sufficient. The learned Division Bench also noted the distinction between an acknowledgement under Section 18 of the Limitation Act, 1963 and promise to pay under Section 25(3) of the Contract Act, 1872. Both have got to be in writing. In the case of first, it has got to be before expiry of the period and in the case of second, it could be beyond the period. In view of the principles stated in the above referred decision, it is evident that the provisions of Section 25(3) of the Indian Contract Act, 1872 is not applicable to the facts and evidence in this case.
37. Further as per section 13 of N.I Act "negotiable instrument" means a "promissory note" "bill of 41 exchange", or "cheque" payable either to order or to bearer. The definition of promissory note as stated in section 4 of the N.I Act indicates that, it contains an unconditional undertaking signed by the maker, to pay a sum of money only to, or to the order of, a certain person, or to the bearer of instrument. The definition of "bill of exchange" as stated in Section 5 and the definition of cheque contain only an unconditional order which clearly distinguish them from the definition of promissory note. In promissory note there must be an express undertaking upon the face of instrument to pay the money. Therefore in promissory there is unconditional undertaking i.e., promise to pay, but the definition of bill of exchange and cheque contain only an unconditional order. This distinction needs to be kept in mind while considering whether the cheque itself constitutes a promise in writing by the accused so as to bring that cheque within the ambit of section 25 (3) of 42 the Indian Contract Act 1872 and penal provision under section 138 of N.I Act.
38. In CHACKO VARKEY VS THOMMEN THOMAS AIR 1958 Ker 31 a Full Bench of the Kerala High Court considered the scope of section 25(3) of the Indian Contract Act 1872 which also supports the accused defense.
39. In view of the principles stated in the above referred decision and discussion it is evident that the penal provision of Section 138 of the N.I.Act is applicable only to the cheques which are issued for the discharge in whole or in part, of any debt or other liability, which according to Explanation must be a legally enforceable debt or other liability. A cheque given in discharge of a time barred debt will not constitute an unconditional undertaking or promise in writing either expressly or impliedly so as to attract the criminal offence under section 138 of N.I Act. This was 43 elaborated in SASSERIYIL JOSESPH's case (supra) which is affirmed by the Hon'ble Supreme Court as stated above. A cheque given in discharge of a time barred debt will not constitute a promise in writing not even an implied promise so as to attract a criminal liability under Section 138 of N.I Act.
40. It is settled principle of law that this court being appellate court and as the Judgment under challenge is against the judgment of the acquittal by the trial court, unless there is perversity in the findings and judgment of the trial court, the Appellate court shall not interfere. The Judgment of the trial court clearly indicates that the learned trial court Judge has raised proper points for consideration and discussed the evidence in detail. The learned trial court Judge has referred to various decisions of Hon'ble Supreme Court and this High Court. The trial court has in detail discussed the oral and documentary evidence. The trial 44 court also considered the presumption under section 139 and 118(a) of N.I Act. Based on the evidence and the principles referred the trial court has come to a conclusion that, the complainant has failed to establish existence of legally recoverable debt. The trial court has rightly held that mere issuance of cheque without corresponding legally recoverable debt is not an offence. The trial court has rightly come to conclusion that the complainant has not established his case and no presumption arise in his favour. The trial court rightly acquitted the accused.
41. In view of the above, absolutely there is no ground to interfere with the judgment of acquittal passed by the trial court. The appeal being devoid of merits is liable to be dismissed. Accordingly I proceed to pass the following:
ORDER Criminal Appeal filed by the complainant is dismissed.45
The Judgment of acquittal of accused passed by I Addl. Civil Judge & J.M.F.C.II Bidar in Criminal Case No.826/2008, dated: 01.02.2016 for the offence punishable under section 138 of N.I Act is hereby confirmed.
Send back the records of the trial court forthwith.
Sd/-
JUDGE MNS