Bangalore District Court
Jayasimha N vs R B Devaraj on 13 September, 2024
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Crl.Apl.No.235/2021 JUDGMENT
KABC010069102021
IN THE COURT OF LXIX ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE (CCH 70)
Present: Smt. Shirin Javeed Ansari, B.A.,LL.B (Hon's) LL.M.,
LXIX Additional City Civil and
Sessions Judge, Bengaluru.
Dated this the 13th day of September, 2024
Crl.A.No.235/2021
Appellant : Mr. Jayasimha.N,
S/o Narasimhaiah Swamy,
Aged about 52 years,
R/At No.67, 2nd Cross,
Vijay Bank Layout,
Bilekahalli, Bannerghatta Road,
Bangalore.
(By Sri. Chetan B Angadi, Advocate)
-V/s-
Respondent : Devaraj. R.B,
S/o R.C. Basavaraju,
Aged About 37 Years,
R/At No.90/D,
Choudeshwari Chicken centre,
100 feet ring road, Near PES College,
Veerabhadranagara,
BSK 3rd Stage, Bangalore-560085.
(By Sri. N.M.Parameswara., Advocate)
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Crl.Apl.No.235/2021 JUDGMENT
JUDGMENT
This The present appeal arises from the judgment and order dated 01.02.2021 passed by the learned Magistrate in C.C. No.15712/2017, wherein the appellant was convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the "NI Act").
2. The accused in cc number 15712/2017 before the trial Court having preferred the instant appeal against the appellant as the appellant and the respondent are hereby assigned with their original ranks before the trial court that is the appellant as the accused and the respondent as original complainant in CC 15712/2017 in the instant discussion for the purpose of Brevity and convenience to avoid the confoundation and perplexity.
3. The epitomized facts of the case of the complainant in CC No. 15712/2017 before the trial court run thus;
That the accused, along with his father, approached the complainant in June 2016, seeking financial assistance to the extent of Rs.15,00,000/-(Rupees Fifteen Lakhs only) for addressing personal and legal issues. The complainant, trusting the accused due to their longstanding relationship, extended a loan of Rs.15,00,000/-(Rupees Fifteen Lakhs only), duly 3 Crl.Apl.No.235/2021 JUDGMENT formalized through a loan agreement dated 17.10.2016, with an understanding that the amount would be repaid within three months. Upon the failure of the accused to repay the loan, he issued a cheque dated 15.03.2017 for Rs.15,00,000/-(Rupees Fifteen Lakhs only), drawn on Karnataka Bank, Uttarahalli Branch, Bengaluru, in favor of the complainant. The complainant, upon presenting the cheque on 15.04.2017, found it dishonored with the endorsement "Funds Insufficient." A legal notice was sent on 28.04.2017, but the accused failed to make payment, which led to the filing of the complaint under Section 138 of the NI Act.
4. The accused, in his defense before the trial court, contended that the cheque in question was not issued in favor of the complainant but was part of a set of cheques issued to one Mr.Ramesh in 2016. The accused claimed that Mr. Ramesh had misused the cheque, leading to the present case. Additionally, the accused argued that he had no legally enforceable debt towards the complainant and filed a counter -complaint alleging kidnapping by the complainant.
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Crl.Apl.No.235/2021 JUDGMENT
5. Being aggrieved by the impugned judgment passed by the trial court, the appellant being accused before the trial court has preferred the instant appeal against the respondent who was the complainant before the trial court on the following;
GROUNDS i. i).That the impugned order is not based on legal principals and the material on record. In view of the same the impugned judgment is liable to be set aside.
ii. 6. That the trail court proceeded to pass the impugned judgment though the complaint has not complied with the provision of Negotiable instrument act. i.e section 139 of NI act and hence the judgment is liable to be set aside. iii. The impugned judgment is passed though the complaint has filed to discharge his initial burden to prove that the cheque in question was issued against a legally enforceable debt and therefore the impugned judgment is liable to be set aside.
iv. That the trail court failed to adhere to the principal under section 139 of NI act and as such filed to consider the fact that the appellant/ complaint has discharge his burden and the burden has been shifted upon the complaint according to section 139 of Negotiable 5 Crl.Apl.No.235/2021 JUDGMENT instrument act. Hence the impugned judgment is liable to be set aside.
v. That the trail court failed to take into
consideration the admission made by the
complaint in his cross examination that he is not income tax assess and also he has not produced before the trial court and the any documents regarding his income tax returns. vi. That the trial erred in convicting the appellant based on the Ex. P-8 & P-9 which are the bank pass book and the bank statement pertaining to the account of the respondent.
vii.Further the trial court has not properly verified the said documents as they do not refer to the ear of transaction alleged by the respondent. viii. Hence, the respondent has utterly failed to prove that he had sufficient amount to advance the same to the petitioner herein as on the date of transaction. Without taking into consideration ix. The fact that the respondent never had the capacity such a huge amount, erroneously, convicted the apple and therefore impounded judgement is liable to be set aside.
x. Viewed from any angle, the impugned judgment is not based on legal principals and the same is highly arbitrary and illegal. Hence the same is 6 Crl.Apl.No.235/2021 JUDGMENT liable to be set-aside.
WHEREFORE it is prayed by the appellant before this Court to set aside the judgment of conviction and sentence of the appellant passed by the XVIII ACMM, Bangalore, CC No.15712/2017, consequently acquit the appellant for an offence under Section 138 of N.I. Act, in the interest of justice and equity.
6. After carefully examining the records of the trail court and the materials available on record, this court proceeds to frame the fallowing points for consideration:-
1. Whether the trial court erred in holding that the cheque issued by the appellant was for the discharge of a legally enforceable debt under Section 138 of the NI Act?
2. Whether the trial court's conclusion based on the oral and documentary evidence is justified?
3. What Order?
7. Inspite of availing sufficient opportunities the appellant, and the respondent remained absent before this court the counsels for the appellant and the respondents have not come forward to submitted their arguments.
8. This court upon re-appreciation of available materials on record with reference to the prevailing law of the land, proceeds to 7 Crl.Apl.No.235/2021 JUDGMENT give findings to the above points as follows;
Point No. 1 :- In the Negative Point No. 2 :- In the Affirmative Point No. 3 :- As per final order for the following;
REASONS
9. The accused in cc 15712/2017 before the trial court having preferred the instant appeal against the complainant as the appellant and the respondent are hereby assigned with their original ranks before the trial court the appellant as accused and respondent as complainant in the instant discussion for the purpose of Brevity and the convenience to avoid the confrontation and perplexity.
10. Point No. 1 and 2:- These points are interrelated to each other in order to avoid the repetition of facts and evidence, they are taken up together for common discussion.
11. The present appeal primarily revolves around the crucial determination of whether the cheque in question was issued by the appellant in discharge of a legally enforceable debt, as required under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). Section 138 of the NI Act is designed to promote the efficacy of banking operations and to ensure that commercial transactions involving cheques are honored unless valid defenses 8 Crl.Apl.No.235/2021 JUDGMENT are raised. In the present case, the appellant has contended that the cheque was misused by one Ramesh, while the complainant asserts that the cheque was issued towards repayment of a loan. Therefore, the court is tasked with evaluating the competing claims of both parties based on the evidence adduced.
12. The trial court rightly observed that the complainant had discharged his burden by proving the existence of a legally enforceable debt through documentary evidence, including Ex.P.6 (loan agreement) and Ex.P.7 (the police complaint by the accused). These documents, coupled with the dishonor of the cheque and the statutory notice of demand, are sufficient to raise a presumption under Section 139 of the NI Act. As reiterated by the Hon'ble Supreme Court in Rangappa v. Sri Mohan (2010) 11 SCC 441, once the complainant proves the basic facts, the burden shifts to the accused to rebut the presumption that the cheque was issued for the discharge of a legally enforceable debt or liability.
13. The defense of the appellant primarily rests on the contention that the cheque was issued in favor of Ramesh as part of a separate transaction and was subsequently misused. This 9 Crl.Apl.No.235/2021 JUDGMENT court finds that the appellant has failed to substantiate this defense. It is a settled principle of law that mere allegations or pleas are insufficient to discharge the burden of rebutting the statutory presumption under Sections 118 and 139 of the NI Act. In Bir Singh v. Mukesh Kumar (2019) 4 SCC 197, the Hon'ble Supreme Court reiterated that the presumption under Section 139 of the NI Act can only be rebutted by credible evidence, not by mere denials.
14. The appellant has not examined Ramesh or produced any other corroborative evidence to prove that the cheque in question was issued to Ramesh and not the complainant. The appellant's failure to examine this crucial witness weakens his defense and lends credence to the complainant's version. The Hon'ble High Court of Karnataka, in S. Krishna Murthy v. S. Nanjappa, ILR 2010 KAR 3825, emphasized that if the accused fails to produce cogent evidence to rebut the presumption under Section 139, the complainant's case remains unimpeached.
15. Furthermore, the appellant admitted during his cross- examination that Ex.P.1, the cheque in question, bears his signature. This admission strengthens the presumption that the 10 Crl.Apl.No.235/2021 JUDGMENT cheque was issued in favor of the complainant for the discharge of a debt. The Hon'ble Supreme Court, in Triyambak S. Hegde v. Sripad (2021) 6 SCC 750, held that once the execution of the cheque is admitted, the onus is heavily placed on the accused to prove that there was no legally enforceable debt or liability.
16. The appellant's argument that he was a victim of misuse is further weakened by his own admissions regarding the execution of Ex.P.6 (loan agreement) and Ex.P.7 (the complaint given to the police). These documents clearly establish a financial relationship between the appellant and the complainant, wherein the appellant sought and obtained a loan of Rs.15,00,000/- (Rupees Fifteen Lakhs only) and undertook to repay the same within three months. The Hon'ble Supreme Court, in Vasantha Kumar R. v. Ameerjan (2017) 8 SCC 421, held that the admissions made by an accused under cross-examination are sufficient to draw adverse inferences unless they are disproved by independent evidence.
17. The appellant's defense of lack of financial capacity on the part of the complainant was raised but not effectively proved. The complainant demonstrated his financial capacity through 11 Crl.Apl.No.235/2021 JUDGMENT Ex.P.8 (bank passbook), Ex.P.9 (bank statement), and Ex.P.10 (sale deed). These documents indicate that the complainant had the financial means to extend the loan to the appellant. The Hon'ble Supreme Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Pyarelal (1999) 3 SCC 35, observed that the financial capacity of the complainant can be inferred from the surrounding circumstances if properly supported by documents.
18. The appellant also raised the contention that the legal notice issued by the complainant under Section 138 N.I.Act was never served, as it was returned with the endorsement "no such person." However, this court finds that the trial court correctly applied the legal principle of "deemed service." The Hon'ble Supreme Court, in C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555, held that when a notice is sent to the correct address and returned with an endorsement of "unclaimed" or similar reasons, it is presumed to have been served. In the present case, the address used by the complainant in the legal notice and the address provided by the appellant in his defense were identical, affirming the presumption of service.
19. The appellant attempted to rely on Ex.D.1 (complaint) 12 Crl.Apl.No.235/2021 JUDGMENT and Ex.D.2 (FIR) to suggest that the complainant and others had been involved in a kidnapping case filed against him. However, as correctly pointed out by the trial court, these documents pertain to a separate incident that is still under investigation and are insufficient to rebut the presumption of liability under Section
138. The Hon'ble High Court of Bombay in K.N. Beena v. Muniyappan, 2001 Cri.L.J 4747, held that proceedings related to criminal complaints unconnected with the dishonor of cheques do not absolve the accused of their liability under Section 138.
20. It is also pertinent to note that the appellant admitted in his cross-examination that he was residing at the address mentioned in the legal notice and return cover. This further strengthens the case for deemed service of the notice and reinforces the complainant's efforts to comply with statutory requirements. The Hon'ble High Court of Kerala, in M.M.T.C. Ltd. v. Medchl Chemicals & Pharma (P) Ltd., (2002) 1 SCC 234, held that when the accused admits to receiving the notice at the address provided in the complaint, the statutory requirements under Section 138 of N.I. Act are deemed to be fulfilled.
21. Moreover, the appellant has not produced any 13 Crl.Apl.No.235/2021 JUDGMENT documentary evidence to challenge the claim of the complainant of advancing the loan or the subsequent issuance of the cheque. The loan agreement (Ex.P.6) and the cheque (Ex.P.1) were admitted by the appellant during cross-examination. In Laxmi Dyechem v. State of Gujarat (2012) 13 SCC 375, the Hon'ble Supreme Court reiterated that once the issuance of the cheque is admitted, the onus shifts entirely to the accused to provide convincing evidence to the contrary, which the appellant has failed to do in this case.
22. The submission of the appellant that he had filed a counter-complaint before the police alleging that the complainant misused the cheque also falls flat. Merely filing an FIR or a counter-complaint does not disprove the issuance of the cheque for the discharge of a legally enforceable debt. The Hon'ble Supreme Court, in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd. (2016) 10 SCC 458, observed that unless a final adjudication is made in the counter- complaint or FIR, the accused cannot use it as a defense to avoid liability under Section 138.
23. The principles laid down in Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 make it clear that a mere denial of the 14 Crl.Apl.No.235/2021 JUDGMENT debt does not absolve the accused of liability. The accused must lead cogent and reliable evidence to displace the presumption of enforceable liability. In the present case, the appellant's defense rests solely on unsubstantiated allegations and fails to meet the burden required to rebut the presumption under Sections 118 and 139 of the NI Act.
24. Therefore, this court finds that the trial court has rightly evaluated both the oral and documentary evidence presented by the parties. The complainant's case is bolstered by the admissions of the appellant, the documentary evidence such as Ex.P.1 (cheque), Ex.P.6 (loan agreement), and Ex.P.7 (complaint), and the statutory presumptions under the NI Act. The appellant's defense is unsubstantiated, and no credible evidence has been presented to rebut the presumption of liability.
25. In conclusion, the appellant has failed to rebut the presumption under Section 139 of the NI Act, and the complainant has successfully established that the cheque was issued in discharge of a legally enforceable debt. The findings of the trial court are based on sound legal principles, and there is no reason to interfere with the conviction and sentence imposed. 15
Crl.Apl.No.235/2021 JUDGMENT Hence in view of this, I answer Point No.1 in the Negative and 2 in the Affirmative.
26. Point No.3:- in view of the reason assigned above and findings arrived at on Point No.1 to 3, I proceed to pass the following:-
ORDER The Criminal Appeal filed by the appellant under section 357(3) of Cr.P.C is hereby dismissed.
The judgment and order of conviction dated 01.02.2021 passed by the XVIII ACMM is confirmed and upheld.
The appellant shall pay the fine amount as directed by the trial court.
The of fice is hereby directed to forward a copy of this judgment to the trial court for further needful action. (Dictated to the Stenographer Grade-1, typed by her, corrected, signed and then pronounced by me in open court on this the 13th day of September 2024) (SHIRIN JAVEED ANSARI) LXIX Addl.C.C. & Sessions Judge, Bengaluru.
13.09.2024 16 Crl.Apl.No.235/2021 JUDGMENT Judgment pronounced in the open court (vide separate Judgment ORDER The Criminal Appeal filed by the appellant under section 357(3) of Cr.P.C is hereby dismissed.
The judgment and order of conviction dated 01.02.2021 passed by the XVIII ACMM is confirmed and upheld.
The appellant shall pay the fine amount as directed by the trial court.
The of fice is hereby directed to
forward a copy of this judgment to the
trial court for further needful action.
(SHIRIN JAVEED ANSARI)
LXIX Addl.C.C. & Sessions Judge,
Bengaluru(CCH-70).
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Crl.Apl.No.235/2021 JUDGMENT