Karnataka High Court
M/S. Kowdi Yalameli vs V.G.Bhat on 23 March, 2018
Equivalent citations: AIRONLINE 2018 KAR 1955
Author: John Michael Cunha
Bench: John Michael Cunha
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
ON THE 23RD DAY OF MARCH, 2018
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
CRIMINAL APPEAL NO.2571 OF 2010
BETWEEN
M/S. KOWDI YALAMELI ENTERPRISES,
REP BY IS PARTNER ANANDAPPA G.YALEMELI,
R/AT HUBLI.
... APPELLANT
(BY SRI.RAJASHEKHAR S.ARANI, ADV.)
AND
1. V.G.BHAT, BUS STAND OPPOSITE,
JURISDICTIONAL POLICE STATION, HONNAVAR.
2. SWASTIK ENTERPRISES,
BUS STAND OPPOSITE, HONNAVAR.
... RESPONDENTS
(BY SRI.DATTATRAY T. HEBBAR,ADV.)
THIS CRIMINAL APPEAL IS FILED U/S 378 OF CR.P.C.
SEEKING TO SETTING ASIDE THE IMPUGNED JUDGEMENT AND
ORDER OF ACQUITTAL PASSED BY THE PRINCIPAL CIVIL JUDGE
(JR.DN.) AND JMFC, HUBLI, IN C.C.NO.124/2005, DATED
30.11.2009, THEREBY CONVICTING AND SENTENCING THE
RESPONDENTS-ACCUSED FOR THE OFFENCE PUNISHABLE
UNDER SECTION 138 OF N.I. ACT AND GRANT SUCH OTHER
RELIEFS AS THIS HON'BLE COURT DEEMS FIT IN THE FACTS
AND CIRCUMSTANCES OF THE CASE.
THIS CRIMINAL APPEAL COMING ON FOR FINAL HEARING
THIS DAY, THE COURT DELIVERED THE FOLLOWING:
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JUDGMENT
This appeal is directed against the judgment dated 30.11.2009 passed by the Prl. Civil Judge (Jr. Dn.) and JMFC., Hubli in C.C. No.124/2005, whereby the learned Magistrate has acquitted the respondents (accused) of the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter called as "N.I. Act").
2. The case of the complainant is that the complainant is a wholesale merchant dealing in Tea and Grocery business at Honnavar. Accused No.2 was having a transaction with the complainant and in respect of the said transaction, accused No.1 issued a cheque bearing No.135714 dated 17.05.2004 for Rs.1,40,000/- drawn on the K.C.C. Bank, Honnavar on behalf of the accused No.2 in favour of the complainant. The said cheque when presented for encashment was dishonoured for 'funds insufficient'. The complainant caused a notice dated 02.06.2004. The accused received the said notice, but failed to issue any reply or to comply with the demand. :3: Hence, the complainant initiated action under Section 138 of N.I. Act.
3. The complainant examined himself as PW-1 and produced in evidence 62 documents including the dishonoured cheque - Ex.P1, copy of the legal notice - Ex.P7, postal acknowledgments - Ex.P9 and Ex.P10, ledger extracts - Ex.P12, 49 invoices - Ex.P13 to Ex.P61 and the accounts extract - Ex.P.61. The Bank Manager was examined as PW2. The accused did not adduce any oral evidence in rebuttal. But, in the course of cross- examination of PW1 got marked 54 receipts issued by the complainant as per Ex.D1.
4. Considering the above material, the learned Magistrate was of the opinion that the accused have paid in all a sum of Rs.1,88,401/- to the complainant, thereby they have made excess payment of Rs.48,401/- and consequently, the learned Magistrate dismissed the complaint and acquitted the accused.
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5. Feeling aggrieved by the impugned judgment, the complainant is before this Court.
6. I have heard the learned counsel for the appellant and the learned counsel for the respondents and have carefully examined the records.
7. The learned counsel for the appellant/complainant has placed reliance on the decision of the Hon'ble Supreme Court of India in B.M.Basavaraj vs. Srinivas S. Datta, CDJ 2016 SC 1007, with reference to para 10, 11 and 12, wherein it is held that once the appellant files a complaint on the basis that he was holding the aforesaid cheques as holder in due course which were admittedly given by the respondent to the appellant and the said cheques were dishonoured when they were presented for encashment to the Bank, and he, further, is able to establish that due notice of the dishonour of the said cheques was given to the respondent as provided in law, there was a clear presumption in favour :5: of the appellant that the money was due under the said cheques.
8. Per contra, learned counsel for the respondents/accused submits that even after the issuance of the cheque, the accused have made payment; if the total payment made by the accused as evidenced in the bunch of the receipts, Ex.D-1 is considered, during the entire period of transaction, the accused have made a payment amounting to Rs.1,88,401/-, far in excess of the amount of the cheque. The learned Magistrate was therefore, justified in holding that the accused have made an excess payment of Rs.48,401/-. Hence, there is no illegality or perversity whatsoever in the impugned judgment as sought to be made out by the complainant and thus, he has sought for dismissal of the appeal.
9. I have considered the submissions and have examined the records.
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10. It is not in dispute that there was a business transaction between the complainant and the accused. The complainant has produced the ledger extract relating to the said transaction vide Ex.P-12. The entire transaction carried on between the parties from 05.07.1999 till 17.05.2004 is reflected in the ledger extract. All the purchases made by accused No.2 as well as the payment made by him from time to time are entered in the said ledger. It is a regularly maintained running account. The said account was closed on 17.05.2004. At the time of the settlement of the account, a sum of Rs.1,40,751/- was payable by accused No.2. The case of the complainant is that in repayment of this debt, accused No.1 issued the cheque in question for Rs.1,40,000/-.
11. The accused do not dispute the issuance of the cheque and also do not dispute that the said cheque was drawn in the name of the complainant. The only contention urged by the accused is that in respect of the transactions carried on by accused No.2 with the complainant over the :7: years, he has made payment amounting to Rs.1,88,401/-, far in excess of the amount of the cheque and therefore, there was no liability on the part of the accused and hence, the presentation of the cheque was illegal and consequently, accused No.1 is not liable for the dishonour of the said cheque.
12. The argument advanced by the learned counsel for the accused, in my view is misconceived. It is the specific contention of the accused No.2 that in respect of every payment made by him in respect of the above transaction, the complainant has been issuing receipts. All the receipts in his possession are produced by him, as per Ex.D-1. All the payments made by the accused until the closure of the account on 17.05.2004 are reflected in the ledger extract, making it evident that each and every payment made by him as reflected in the receipts Ex.D1 are given due credit by the complainant. It was a running account. The closing balance therein was Rs.1,40,751/- is also not disputed by the accused for the reason that in :8: respect of the every purchase made by accused No.2, the complainant has produced supporting invoices which correspond to the entries contained in the ledger extract. Thus the complainant has produced clinching evidence in proof of the fact that in respect of the above transaction, the accused was owing a sum of Rs.1,40,751/-, as on the date of issuance of the cheque.
13. It is a matter of record that subsequent to the issuance of the cheque, the accused has made part payment from time to time. Even in respect of this payment, the complainant has issued receipts, as could be seen from the receipts commencing from 11.07.2006. The payment made by him from 11.07.2006 till 22.02.2009 comes to Rs.44,500/-. These payments are made by accused No.2 subsequent to the dishonor of the cheque, during the pendency of these proceedings. The said amount therefore, cannot be said as the excess payment made by the accused in respect of the out-standings due by him. It is only the part payment out of the outstanding :9: of Rs.1,40,751/-. He is entitled for the credit of the said amount.
14. Nonetheless, the fact remains that the cheque issued by accused No.1 in discharge of the alleged debt of Rs.1,40,751/- which was due by accused No.2 as on the date of the issuance of the cheque has been dishonoured, rendering him liable for conviction under Section 138 of N.I. Act being the drawer of the cheque. Therefore, the finding recorded by the learned Magistrate that the accused has made an excess payment of Rs.48,401/- is patently wrong and contrary to the documentary evidence available on record. The evidence on record does not suggest any excess payment as contended by the accused. On the other hand, it is proved by the complainant that a sum of Rs.1,40,751/- was due and payable by accused No.2 and in discharge of the said amount, accused No.1 issued the cheque in question which has been dishonoured. The complainant has proved all the ingredients of the offence under Section 138 of N.I. Act. : 10 : Hence, the findings recorded by the lower Court exonerating accused No.1 cannot be sustained. The said findings are contrary to the evidence on record. Hence, the impugned judgment is liable to be set aside. Accordingly, I proceed to pass the following:
ORDER Appeal is allowed.
The judgment dated 30.11.2009 passed by the Prl. Civil Judge (Jr. Dn.) and JMFC., Hubli in C.C. No.124/2005 is hereby set aside.
Accused No.1 is hereby convicted of the offence punishable under Section 138 of N.I. Act and is sentenced to pay a fine of Rs.2,50,000/-. In default to pay or deposit the said fine of Rs.2,50,000/-, he shall undergo simple imprisonment for one year.
The payment made by accused No.2 during the penedency of the proceedings, amounting to Rs.44,500/- : 11 : shall be given deduction and the balance fine amount, amounting to Rs.2,05,500/- shall be paid or deposited by accused No.1 within four weeks from the date of this order failing which he shall undergo simple imprisonment for a period of one year as ordered.
On payment or deposit of the aforesaid fine amount, a sum of Rs.2,00,000/- shall be made over to the complainant by way of compensation. Rs.5,500/- shall be confiscated to the State by way of fine.
Appeal stands allowed in terms of the above order.
Sd/-
JUDGE Hmb/Rsh