Karnataka High Court
Sri Lokesh N. Reddy vs Sri K V Nagaraja on 5 September, 2019
Equivalent citations: AIRONLINE 2019 KAR 1571, 2019 ACD 1037 (KAR)
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 05TH DAY OF SEPTEMBER, 2019
BEFORE
THE HON'BLE MR.JUSTICE B.A. PATIL
CRIMINAL APPEAL NO.422 OF 2018
BETWEEN:
Sri.Lokesh.N.Reddy,
S/o Late Narasimha Reddy,
Aged about 41 years,
R/at No.444,
Suredenapura Gate,
Suradenapura Village,
Hardenapura Post,
Bengaluru - 560110.
...Appellant
(By Sri.H.S.Dwarakanath, Advocate for
Sri.R.A.Chandrashekara Reddy, Advocate)
AND:
Sri.K.V.Nagaraja,
S/o late Venkatappa,
Aged about 41 years,
R/at 1st cross,
Near Gvi Primary School,
Kundalahalli & Post,
Bengaluru - 560037.
...Respondent
(Respondent served & unrepresented)
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This Criminal Appeal is filed under Section 378(4)
of Cr.P.C., praying to set aside the judgment dated
31.01.2018 passed by the 58th A.C.M.M., Bengaluru in
C.C.No.52387/2017 - acquitting the respondent /
accused for the offence punishable under Section 138 of
N.I.Act.
This Criminal Appeal coming on for Admission,
this day, the Court delivered the following:
JUDGMENT
This appeal has been preferred by the complainant/appellant challenging the judgment and order of acquittal passed by LVIII Additional Chief Metropolitan Magistrate, Mayo hall Unit, Bengaluru City in C.C.No.52387/2017 dated 31.01.2018.
2. Though this case is listed for admission, with the consent of learned counsel for the appellant, the same is taken up for final disposal.
3. I have heard the learned counsel for the appellant.
4. Though notice is served to the respondent, he has remained absent. There is no representation. 3
5. The gist of the complaint is that complainant and accused were acquainted with each other and were also good friends from several years. Accused requested the complainant for a hand loan of Rs.9 lakhs in the 3rd week of October, 2016 for the purpose of construction of the house and family necessities and assured to repay the said amount within two months. Complainant gave Rs.9 lakhs on 27.10.2016. Thereafter, after two months complainant approached the accused and requested for repayment of the said amount. Then accused issued a cheque bearing No.937578 dated 27.01.2017 duly signed for discharge of the said debt. It is further stated that when the said cheque was presented for realization, it was dishonoured with a shara 'insufficient funds'. Thereafter, legal notice was issued. Even inspite of service of notice, the said amount has not been paid and as such, a private compliant was filed under Section 138 of Negotiable Instruments Act, 1881 (herein after referred to as 'the Act' in short). 4
6. The learned Magistrate took the cognizance and secured the presence of the accused and after hearing both the parties, plea was recorded. Accused denied the charges and claimed to be tried. In order to prove the case of the complainant, complainant got examined himself as PW.1 and documents were marked as Exs.P1 to P5. Thereafter, the statement of the accused was recorded under Section 313 of Cr.P.C. Accused has neither led any evidence nor got any documents marked. After hearing the learned counsel, the trial Court acquitted the accused. Challenging the legality and correctness, the complainant/appellant is before this Court.
7. The main ground urged by the learned counsel for the appellant is that the accused/respondent has not stepped into the witness box and has not rebutted the presumption drawn under Section 139 of the Act. The Court below without looking 5 into the legal aspect has gone beyond the jurisdiction and has discussed that the complainant is a income tax assessee and the said amount has not been shown in the income tax return and as such, there is no transaction between the accused and the complainant. The trial Court has wrongly observed that no inferences can be drawn about the capacity of the accused. He further submitted that when once the accused admits the transaction of issuance of the cheque from his account and the signature thereon, the burden shifts upon him to rebut the presumption on preponderance of probabilities. Though it is the contention of accused that the said cheque has been given to one Smt.Chinnamma and the same has been misused but the said Chinnamma has not been examined to substantiate the said fact. He further submitted that the evidence and materials placed on record indicates that there was a quarrel took place in this behalf for the purpose of loan transaction and that itself establishes 6 the fact that the money transaction was existing between the complainant and the accused. Ignoring the said fact erroneously the trial Court has passed the impugned order of acquittal. He further submitted that the PW.1 has proved the case as contemplated under Section 138 of the Act and as per the decision of the Hon'ble Apex Court, it is mandate of the Court to draw a presumption. Without drawing any such presumption, the trial Court has erroneously passed the impugned order. On these grounds, he prayed to set aside the impugned order and the accused be convicted to the alleged offences.
8. I have carefully and cautiously gone through the submissions made by the learned counsel for the appellant and perused the lower Court records.
9. As could be seen from the lower Court records, it is the specific case of the complainant that the accused and the complainant are acquainted with 7 each other and they were also good friends and accused approached complainant in the 3rd week of October 2016 and had asked for a hand loan of Rs.9 lakhs for the purpose of construction of house and family necessities and it is the specific case that complainant that he had given cash of Rs.9 lakhs on 27.10.2016 when he asked to return the same, then the accused issued a cheque bearing No.937578 dated 27.01.2017 and the said cheque has been dishonoured and thereafter, legal notice also came to be issued as per Ex.P3 and the said legal notice has been served to the respondent/accused on 13.02.2017 as per Ex.P5, no reply has been given to the said notice. PW.1 in his evidence has reiterated the contents of the complaint. During the course of cross examination of PW.1, accused has taken inconsistent stand has been taken by the accused. At paragraph 3 of cross examination dated 12.12.2017, it has been suggested that the said 2 cheques have been issued in favour of Chinnamma have 8 misused in this case. The said suggestion has been denied by the complainant. By going through the cross examination and the suggestion made by the accused, the signature on the cheque Ex.P1 has been admitted and it is not disputed that it belongs to the accounts of the accused. When once the signature on the cheque has been admitted, then under such circumstances, the presumption mandated under Section 139 of the Act including a presumption that there exists a legally enforceable debt or liability has to be drawn. No doubt the accused is given a liberty to rebut the said presumption in his defence by cogent and acceptable evidence on preponderance of evidence this preposition of law has been laid by the Hon'ble Apex Court in the case of Rangappa Vs. Sri Mohan reported in (2010)11 SCC 441, wherein at paragraph 16 it has been observed as under:-
16. All of these circumstances led the High Court to conclude that the accused had 9 not raised a probable defence to rebut the statutory presumption. It was held that:
"6. Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant. The presumption referred to in Section 139 of the N.I. Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal 10 evidence must be probable and capable of being accepted by the Court.
The defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. Unless this barrier is crossed by the accused, the other defence raised by him whether the cheque was issued towards the hand loan or towards the amount spent by the complainant need not be considered. ..."
Hence, the High Court concluded that the alleged discrepancies on part of the complainant which had been noted by the trial court were not material since the accused had failed to raise a probable defence to rebut the presumption placed on him by Section 139 of the Act. Accordingly, the High Court recorded a finding of conviction.
10. On close reading of the said decision, when it mandates that the Court has to draw a presumption 11 that there exists a legal recoverable debt or liability, then under such circumstances, other discussions held by the Court below that the complainant has not produced any documents to show about the said transaction and that he is a income tax assessee and said amount has not been shown in the income tax return are not the criteria to come to different conclusion and until and unless the said presumption has been rebutted by the accused by cogent and acceptable evidence.
11. As could be seen from the records, the accused has not stepped into the witness box to substantiate the said contention, defence and even the said Chinnamma or any other persons, who were present at that time, when the said cheque has been given to her have been examined. When the accused made out a specific case that the said cheque has been issued in favour of one Chinnamma and has been 12 misused by the complainant, then under such circumstances, atleast he could have issued a legal notice to the complainant or else he could have filed a criminal complaint against the complainant for having misused the said cheque issued in favour of Chinnamma. No other such material has been produced to come to any other conclusion. This Court is conscious of the fact that the accused even without stepping into the witness box can rebut the presumption raised under Section 139 of the Act, during the course of cross-examination by getting the admission or bringing the records but except Ex.D1 the deposition of the said Chinnamma in a private complaint, no other materials has been produced. Even Ex.D1 only indicates that another sum of Rs.9 lakhs has been taken from Chinnamma and for which she has also filed a complaint. It is not going to throw any light to show that the said cheque has been issued to Chinnamma and it has been misused. On the contrary, 13 the said Chinnamma has also filed a case under Section 138 of the Act and therein she has also contended that accused/respondent has availed a loan of Rs.9 lakhs from one Shivanna and he has issued a cheque. In that light, that the said Ex.D1 does not throw any light. It is well settled proposition of law that when once the complainant proves that he has lent a loan of Rs.9 lakhs and the accused has issued a cheque belonging to his account and the same has been dishonoured with 'insufficient funds' and thereafter, legal notice has been issued and the accused has failed to give reply or to repay the amount, then under such circumstances, offence under Section 138 of the Act is going to be proved. As could be seen from the Ex.D5 the said legal notice has been served to the accused on 13.02.2017. The said signature and service of notice has not been denied. Looking from any end, the finding given by the Court below is not in accordance with law and the same is liable to be set aside.
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12. Accordingly, I pass the following order. The petition is allowed. The judgment of the LVIII Additional Chief Metropolitan Magistrate, Mayohall Unit, Bengaluru in C.C.No.52387/2017 dated 31.01.2018 is set aside and the accused is convicted for the offence punishable under Section 138 of the Act and he is sentenced to pay a fine of Rs.10 lakhs and out of the said fine amount Rs.9 lakhs is ordered to be paid to the complainant on proper identification and acknowledgment. Remaining amount of Rs.1 lakh shall be vest in the State as a fine.
Accordingly appeal is disposed of.
Sd/-
JUDGE NS