Karnataka High Court
Smt T R Radhamma vs Sri Munigowda on 9 February, 2024
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CRL.A.No.824 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 09TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE ANIL B KATTI
CRIMINAL APPEAL No.824 OF 2014 (A)
BETWEEN:
SMT.T.R.RADHAMMA
W/O.LATE T.K.DASS RAJ URS
AGED ABOUT 55 YEARS
OCCUPATION: GOVT. SERVANT
R/AT NO.6, GROUND FLOOR
BYRAVESHWARA NILAYA
1ST CROSS, MARUTHI LAYOUT
DASARAHALLI
BANGALORE-560 024.
...APPELLANT
Digitally signed (BY SRI.M.R.BALAKRISHNA, ADVOCATE)
by SUMITHRA
R
Location: HIGH AND:
COURT OF
KARNATAKA
SRI.MUNIGOWDA
FATHER'S NAME NOT KNOWN
AGED ABOUT 48 YEARS
OCCUPATION: PEON
OFFICE OF THE ASST. EXECUTIVE ENGINEER
NO.4, IRRIGATION INVESTIGATION
SUB- DIVISION, 2ND FLOOR,
SWDC BUILDING, ANANDA RAO CIRCLE,
BANGALORE-560 009
...RESPONDENT
(BY SRI.VISHRUTH B.R., ADVOCATE FOR
SRI.P.BASAVARAJU, ADVOCATE)
THIS APPEAL FILED U/S.378 (4) CR.P.C, PRAYING TO SET
ASIDE THE ORDER DATED: 8.9.14 PASSED BY THE XV ADDL.
C.M.M., BANGALORE IN C.C.NO.13744/2011- ACQUITTING THE
RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I.
ACT.
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CRL.A.No.824 of 2014
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
30.01.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
JUDGMENT
Appellant/complainant feeling aggrieved by judgment of Trial Court on the file of XV ACMM, Bengaluru in C.C.No.13744/2011, dated 08.09.2014 preferred this appeal.
2. Parties to the appeal are referred with their ranks as assigned in the Trial Court for the sake of convenience.
3. Heard the arguments of both sides.
4. After hearing arguments of both sides and on perusal of Trial Court records, so also the impugned judgment under appeal, the following points arise for consideration:
1) Whether the impugned judgment under appeal is perverse, capricious and legally not sustainable?
2) Whether interference of this Court is required?-3- CRL.A.No.824 of 2014
5. On careful perusal of oral and documentary evidence placed on record, it would go to show that complainant and accused are colleagues working in the same department for the last ten years. Accused to meet out his financial crises approached complainant for hand loan of Rs.1,00,000/- in the month of September 2010. Complainant has paid the said amount to accused and agreed to repay the same on or before 22.03.2011. Accused has issued post dated cheque bearing No.903181 Ex.P.1 dated 22.03.2011 drawn on Corporation bank S.C.Road branch, Bengaluru for lawful discharge of debt. Complainant presented the said cheque for collection through his banker and the same was dishonoured for want of sufficient funds in the account of accused vide bank endorsement Ex.P.2. Complainant issued demand notice dated 24.03.2011 Ex.P.3. The same is duly served to accused vide acknowledgement card Ex.P.4. Accused has neither replied to the said notice nor paid the amount covered under cheque. Therefore, complainant filed complaint on 13.04.2011. If the aforementioned documents are perused and appreciated with the oral -4- CRL.A.No.824 of 2014 testimony of PW.1, then it would go to show that complainant has complied all the necessary legal requirements in terms of Section 138(a) to (c) of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as "N.I.Act"). Complainant has filed complaint on 13.04.2011 within a period of one month from the date of accrual of cause of action in terms of Section 142(1)(b) of N.I.Act. Therefore, statutory presumption will have to be drawn in favour of complainant in terms of Section 118 and 139 of N.I.Act.
6. In this context of the matter, it is useful to refer the judgment of Hon'ble Apex Court in APS Forex Services Pvt. Ltd. Vs. Shakti International Fashion Linkers and others reported in AIR 2020 SC 945, wherein it has been observed and held that once the issuance of cheque with signature on cheque is admitted, there is always a presumption in favour of complainant that there exist legally enforceable debt or liability. Plea by accused that cheque was given by view of security and same has been misused by complainant is not tenable. -5- CRL.A.No.824 of 2014
7. It is also profitable to refer another judgment of Hon'ble Apex Court in P. Rasiya vs. Abdul Nazer and another reported in 2022 SCC OnLine SC 1131, wherein it has been observed and held that:-
" Once the initial burden is discharged by the complainant that the cheque was issued by the accused and signature of accused on the cheque is not disputed, then in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for discharge of any debt or other liability. The presumption under Section 139 of N.I. Act is statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant/holder of the cheque, in that case it is for the accused to prove the contrary."
In view of the principles enunciated in the aforementioned two judgments of Hon'ble Apex Court, it is evident that when once issuance of cheque with signature of accused on the account maintained by him is admitted or proved then statutory presumption in terms of Section 118 and 139 of N.I. Act will have to be drawn.
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8. It is now up to the accused to place rebuttal evidence to displace statutory presumption available in favour of complainant. In the present case accused apart from relying on the material evidence produced by complainant also relied on his own evidence as DW.1 and the documents Ex.D.1 to Ex.D.12. Whether, the said rebuttal evidence placed on record by accused is sufficient to displace the statutory presumption available in favour of complainant or not has to be decided.
9. Learned counsel for complainant in support of his contention that failure of accused to reply to statutory notice inference can be drawn that there was merit in the complainant version relied on the judgment of Hon'ble Apex Court in Rangappa Vs. Mohan reported in 2010 AIR SCW 2946, wherein it has been observed and held in para 15 as under:
" A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Further more, the very fact that accused had failed to reply to the statutory notice under Section 138 of the -7- CRL.A.No.824 of 2014 N.I.Act leads to the inference that there was merit with the complainant's version".
Learned counsel for complainant relied on the judgment Hon'ble Bombay High Court in Yogendra Bhagatram Sachdev Vs. State of Maharashtra and another reported in III(2003) CCR 216, wherein it has been observed and held that:
"The failure of accused to reply to this 138 notice not being explained would raise a presumption that the accused had, in fact, no defence whatsoever".
Learned counsel for complainant also placed reliance on the judgment of Hon'ble Apex Court in Tedhi Singh vs. Narayan Dass Mahant reported in 2022 Live Law (SC) 275, para 9:
"9. xxxx The proceedings under Section 138 of the N.I. Act is not a civil suit. At the time, when the complaint gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent the Courts in our view were right in holding on those lines."-8- CRL.A.No.824 of 2014
In view of the principles enunciated in this judgment, the complainant was not expected to initially lead evidence that he had the financial capacity. The defence of accused in challenging the financial capacity was not known to the complainant and as such, the complainant was not expected to give evidence of his financial capacity when he led his evidence. However, in the very same paragraph, the Hon'ble Apex Court has further held as under :
"However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence. -9- CRL.A.No.824 of 2014 The Hon'ble Apex Court has held that though accused has not replied to the demand notice, the accused has the right to challenge the financial capacity during the cross- examination of PW.1 and the witnesses relied by the complainant. Therefore, it is open for the accused to challenge the financial capacity of complainant in giving loan amount covered under Ex.P.1.
10. Accused/DW.1 has deposed to the effect that for the last 12 years he knows the complainant, since both of them were working in the same department at different places. He has further deposed that in the month of January 2010 he has made money transaction with complainant and taken loan of Rs.40,000/-. Accused has issued blank signed cheque as a security for the said amount. Accused admitted his signature on Ex.P.1 and denies the contents are written by him. DW.1 further deposed to the effect that he did not know reading and writing English language and he has not taken hand loan of Rs.1,00,000/- from complainant. The demand notice of complainant is not served to him, he has further deposed
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CRL.A.No.824 of 2014to the effect that his daughter died on 31.07.2010 and produced death certificate Ex.D.1. On account of death of his daughter, he could not attend to his duty for about two months and never met the complainant in the month of September 2010. Complainant has also made several money transaction with others who are working in the same department and doing unauthorized money lending business. DW.1 also produced Exs.D.2 to 12 which are related to C.C.No.17314/2013. It has been elicited in the cross-examination of DW.1 that he has not filed any complaint against complainant for misusing the cheque. However, he has not issued any intimation to bank to stop the payment of cheque Ex.P.1 and he was having no difficulties to give such intimation.
11. It is true that evidence of DW.1 and the documents Exs.D.1 and 2 would go to show that, daughter of accused Jyothi died on 31.07.2010 and accused was on earned leave from 02.08.2010 to 25.08.2010 Ex.D.2. If these documents are perused, then it would go to show that accused was on duty in the month of September
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CRL.A.No.824 of 20142010. Therefore, there is no reason to disbelieve the evidence of complainant/PW.1 that she has given hand loan to accused during the lunch hour in front of Saibaba temple situated in the office premises.
12. Accused has next contended that demand notice issued by complaint Ex.P.3 is not served to accused. Indisputably, the demand notice Ex.P.3 was sent to office address of accused and the correctness of the said address has not been denied by accused. The defence counsel has subjected PW.1 to lengthy cross-examination on the issue of service of demand notice and the procedure followed in the office for receiving the post in the inward section. The demand notice is sent through RPAD, the signature of accused is appearing on the acknowledgement card which he has not denied. The mere fact that notice was not served to the residential address of accused, it cannot be the ground to hold that there is no service of demand notice to accused. Learned counsel for accused on the point of non service of demand notice relied on the judgment of Hon'ble Kerala High Court in Jayachandran
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CRL.A.No.824 of 2014Vs. Baburaj reported in 1998 Cri.L.J. 3671 and another judgment of Hon'ble Apex Court in M.D.Thomas Vs. P.S.Jaleel and another reported in 2009 (14) SCC
398. In view of the facts involved in the said case, the service of demand notice was held to be not proper. Whereas, in the present case the demand notice is duly served to the accused vide acknowledgement card Ex.P.4 and the signature of accused is appearing. Therefore, the aforementioned two decisions have no application to the facts of the present case.
13. Accused has contended cheque in question Ex.P.1 was issued as a security for the loan of Rs.40,000/- which was availed from complainant and the said cheque has been misused to file this false case. The contents of Ex.P.1 are not written by him. Learned counsel for complainant placed reliance on the judgment of Hon'ble Gujarath High Court in Sathish Jayantilal Shah Vs. Pankaj Mashruwala and another reported in 1996 Cri.L.J. 3099, wherein it has been observed and held that:
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"Thus the applicant clearly admitted
execution, hence this contention needs no
consideration and be rejected. Apart from this fact, no law provides that in case of any negotiable instrument entire body has to be written by maker or drawer only. What is material is signature of drawer or maker and not the body writing hence question of body writing has no significance".
14. Learned counsel for complainant also relied on the Co-ordinate Bench judgment of this Court in S.R.Muralidar Vs. Ashok G.Y. reported in 2001 (4) KAR.L.J 122, wherein it has been observed and held at para 8 as under:
" The fact that a document executed in inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorising the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as inadmissible nor it amounts to tampering with material particulars".
Therefore, in view of the principles enunciated in both the aforementioned judgment, the contention of accused that the contents of Ex.P.1 are not in his hand
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CRL.A.No.824 of 2014writing and he has not issued cheque Ex.P.1 cannot be legally sustained.
15. Learned counsel for accused in support of his contention that the loan transaction of accused is not shown in the income tax return relied on the judgment of Bombay High Court in Sanjay Mishra Vs. Ms.Kanishka Kapoor @ Nikki and another reported in 2009 Cri.L.J 3777. Wherein it has been observed and held that:
"amount advanced by complainant to accused was large amount was not repayable within few months. Delivered by complainant to disclose the amount in his income tax returns or books of accounts. Sufficient to rebut presumption". Learned counsel for appellant relied on the Co-ordinate Bench Judgment in Gajanan Kallappa Kadokar Vs. Appasaheb Siddamallappa Kaveri reported in 2022 Live Law (KAR) 483, wherein it has been observed and held that:
" the provision of 269SS of Income Tax Act does not make the alleged transaction void. The concerned authorities can take necessary action against the complainant for non compliance of 269 of the Income Tax Act".
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CRL.A.No.824 of 2014Therefore, the non showing of loan transaction of accused in income tax returns if at all it was availed by complainant being liable for assessment of income tax returns then also the non disclosure of loan transaction will not affect the transaction claimed by complainant.
16. Learned counsel for accused in support of his contention that material alterations in drawing the cheque Ex.P.1 will not attract penal action in terms of Section 138 of N.I.Act relied on the following three judgments:
1) AIR 1986 AP 120 - Jayantilal Goel -Vs-
Smt.Zubeda Khanum
2) 2005 Cri.L.J.1237 - Ramachandran -Vs-
K.Dineshan
3) LAWS (APH) - 2003-7-143 -Avon Organics Ltd.(A Company Incorporated Under Companies Act, 1956) -Vs- Pioneer Products Ltd.
I have gone through the principles enunciated in these decisions regarding the document Ex.P.1 is held to be void on account of material alteration in the cheque. In the present case accused did not dispute the issuance of cheque Ex.P.1 with his signature on the account maintained by him drawn on Corporation bank. In view of
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CRL.A.No.824 of 2014the aforementioned judgment relied by the counsel for complainant in Satish Jayantilal Shah and Sanjay Mishra case referred supra the writing in cheque Ex.P.1 is not material and only the signature of accused that matters that it was drawn by accused.
17. Learned counsel for accused has also argued that when actually the money was paid has not been pleaded by complainant and also no evidence is produced to prove the said fact. In support of such contention reliance is placed on the Co-ordinate Bench Judgment of this Court in H.Manjunath Vs. Sri.A.M.Basavaraju reported in ILR 2014 KAR 6572. In the said case before this Court complainant authoritively contended that it is the accused who filled up cheque thereby creating/shifting burden upon to prove it is in the hand writing of accused. The said facts are not the one involved in the present case. The non mentioning of specific date cannot take away the case of complainant, but the same will have to be appreciated with the other evidence available on record.
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CRL.A.No.824 of 2014
18. Learned counsel for accused in support of his contention that even according to complainant, she is a Government servant and she has given hand loan to the accused. The alleged transaction entered into between complainant and accused was illegal and without consideration. Relied on the Co-ordinate Bench Judgment of this Court in Jagadeesh Hiremath Vs. R.Venkatesh in Crl.A.No.907/2017 a/w 908/2017 dated 13.02.2020. This Court having found on the material evidence on record that complainant being Government servant was involved in money lending business without there being any license and the transaction entered between complainant and accused was illegal and without consideration and the same is hit by Section 23 of Indian Contract Act. In the present case the complainant has never pleaded that she is doing money lending business and given loan of Rs.1,00,000/- to accused with interest. It is the accused who has taken that defence and relied on the documents at Exs.D.3 to 12. The proceedings between complainant and one R.Ranga in C.C.No.17314/2014 who is also the D group employee working in the same
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CRL.A.No.824 of 2014department of complainant. The lending of money to colleagues working in the same department itself cannot be a ground to hold that complainant was doing money lending business in contravention of her service conditions. In the aforementioned judgment relied by learned counsel there was enough material evidence that on demand promissory note and five cheques were issued in favour of complainant and accused has agreed to pay interest at 1.5% per month. The said conduct of complainant was held to be illegal contract falling within the ambit of Section 23 of Indian Contract Act and also against rule 21 of Karnataka Civil Service (conduct) Rules, 1966 (i) 1956. As such, this Court has held that debt was in existence as on the date of presentation of the cheque for encashment, the accused cannot be held liable for consequences of dishonour thereof. The mere lending of money to the colleagues itself may not amount to misconduct of the complainant. If at all there is any such misconduct, it is for the competent authority to take action against complainant in accordance with law.
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CRL.A.No.824 of 2014
19. Learned counsel for accused in support of his contention that there was no any legally enforceable debt relied on the Co-ordinate Bench Judgment of this Court in Shiva Murthy Vs. Amruthraj reported in ILR 2008 4629. This Court in view of the material evidence on record in the said case has recorded finding that "it is only after satisfying that the complainant has proved existence of legally enforceable debt or liability, the Courts could have proceeded to draw presumption under Section 139 of N.I.Act and thereafter find out as to whether or not the accused has rebutted the said presumption. Learned counsel for accused also relied on the judgment of Hon'ble Apex Court in G.Pankajakshi Amma and others Vs. Mathai Mathew (Dead) through LRs. and Another reported in (2004) 12 SCC 83, wherein it has been observed and held that unaccounted transaction between the parties is a illegal transaction and no penal action in terms of Section 138 of N.I.Act can be sustained. In the present case accused has failed to demonstrate that it is case of unaccounted money or transaction was illegal. The passing of consideration has to be presumed in terms of
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CRL.A.No.824 of 2014Section 118(a) of N.I.Act. Therefore, aforementioned both judgments have no application to the facts of the present case.
20. Learned counsel for accused also relied on another judgment of Hon'ble Apex Court in Dalip Singh Vs. State of Uttara Pradesh and others reported in (2010) 2 SCC 114, in support of his contention regarding dishonest intention of parties. In the present case accused has failed to produce any evidence on record to meet the legal requirement to establish the dishonest intention of complainant in lending loan amount to accused. Therefore, the said decision has no application to the facts of the present case.
21. Lastly, learned counsel for accused in support of his contention that Appellate Court could not interference with the judgment of acquittal when two views are possible, relied on the following three judgments of Hon'ble Apex Court:
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1) (2016) 16 SCC 418 - Harbeer Singh Vs. Sheeshpal and others. 2) (2003) 1 SCC 1 C - C.Antony Vs. K.G. Raghaven Nair. 3) (2006) 6 SCC 39 M.S.Narayana Menon @ Mani Vs. State of Kerala and Another. In have carefully gone through the principles enunciated in all these three decisions that another golden thread which runs through the web of
administration of justice in criminal case is that if two views are possible on evidence adduced in the case, one pointing to the guilt of accused and other to his innocence, the view which is favorable to accused should be adopted.
It has been further held that in an appeal against the acquittal cannot substitute its' finding merely because another contrary opinion was possible on the basis of material on record. Unless the finding of Trial Court are perverse or contrary to the material on record.
22. In the present case in view of the reasons recorded as above none of the contention raised by accused during course of cross-examination of PW.1 or out
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CRL.A.No.824 of 2014of the evidence of DW.1 with the documents Exs.D.1 to 12 are held to be unsustainable and the said evidence cannot be accepted as rebuttal evidence to displace the statutory presumption available in favour of complainant.
23. When once issuance of cheque Ex.p.1 with signature of accused on the account maintained by him is either admitted or proved by complainant, further rebuttal evidence placed on record by accused found to be insufficient to displace the statutory presumption, then the statutory presumption in favour of complainant in terms of Section 118 and 139 of N.I.Act continues to operate in favor of complainant. The contrary finding recorded by Trial Court for the reasons recorded as above held to be not sustainable in law. Therefore, it will have to be held that complainant has proved that accused has committed the offence punishable under Section 138 of N.I.Act.
24. The question now remains is imposition of sentence. The Court while imposing sentence must take into consideration the offence committee by accused, nature of evidence placed on record, the circumstance
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CRL.A.No.824 of 2014under which the transaction has been entered and the cheque Ex.P.1 was issued for lawful discharge of debt has to be taken into consideration. In the present case complainant and accused are colleagues working in the same department and the loan was granted by complainant to meet the financial crises of accused. There was no any commercial transaction that involved in this case. Therefore, looking to the facts and circumstances of the case and the evidence on record, so also by keeping in mind the above referred requirements, if the accused is sentenced to pay a fine of Rs.1,10,000/- and in default of payment of fine shall undergo sentence of imprisonment for three months is ordered will meet the ends of justice. Consequently, proceed to pass the following:
ORDER Appeal filed by appellant/complainant is hereby allowed.
The judgment of Trial Court on the file of XV ACMM, Bengaluru in C.C.No.13744/2011, dated 08.09.2014 is hereby set aside.
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Accused is convicted for the offence punishable under Section 138 of N.I.Act and sentenced to pay fine of Rs.1,10,000/- and in default of payment of fine shall undergo simple imprisonment for 3 months.
In exercise of power under Section 357 of Cr.P.C., out of the fine amount of Rs.1,05,000 is ordered to be given to complainant as compensation and remaining amount of Rs.5,000 is ordered to be defrayed as prosecution expenses.
Registry to send back the records to Trial Court with a copy of this order.
Sd/-
JUDGE GSR List No.: 1 Sl No.: 5