Karnataka High Court
T Venkataramaiah vs Esha G S/O Sri Gangadhar on 25 September, 2020
Crl.R.P.No.498/2011
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF SEPTEMBER 2020
BEFORE
THE HON'BLE MRS. JUSTICE K.S.MUDAGAL
CRIMINAL REVISION PETITION No.498/2011
BETWEEN:
T.VENKATARAMAIAH
S/O. SRI THIMMAIAH
AGED ABOUT 61 YEARS
R/AT NO.157/5, 8TH CROSS
BHAHUBALINAGAR
JALAHALLI VILLAGE & POST
BENGALURU- 560 013 ...PETITIONER
(BY SRI SRINIVASA.D.C., FOR
SRI C.G.GOPALASWAMY, ADVOCATES)
AND:
ESHA.G
S/O. SRI GANGADHAR
AGED ABOUT 33 YEARS
R/AT NO.16, 1ST MAIN
1ST CROSS, GAYATHRINAGAR
6TH PHASE, J.P.NAGAR
BENGALURU- 560 021 ...RESPONDENT
(BY SRI H.A.MANJUNATHA PRASANNA, ADVOCATE)
THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 OF CR.P.C. PRAYING TO SET ASIDE THE
JUDGMENT AND SENTENCE DATED 05.02.2011 PASSED BY
THE FAST TRACK COURT-I, BENGALURU CITY IN CRIMINAL
APPEAL NO.655/2002 AND TO SET ASIDE THE JUDGMENT
AND SENTENCE DATED 24.10.2002 PASSED BY THE III
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE,
BENGALURU IN C.C.NO.31589/2000.
THIS CRIMINAL REVISION PETITION COMING ON FOR
ORDERS THIS DAY, THE COURT THROUGH VIDEO
CONFERENCE MADE THE FOLLOWING:
Crl.R.P.No.498/2011
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ORDER
"Whether the impugned order of conviction and sentence passed by the XIII Additional Chief Metropolitan Magistrate, Bengaluru in C.C.No.31589/2000 as confirmed by the Fast Track Court I, Bengaluru City in Criminal Appeal No.655/2002 suffers infirmity, incorrectness and illegality"? is the question involved in this case.
2. Petitioner was the accused and respondent was the complainant in C.C.No.31589/2000. For the purpose of convenience the parties will be referred to henceforth with their ranks before the trial Court.
3. The complainant filed the complaint as per Ex.P8 in P.C.R.No.1080/2000 against the accused alleging that the accused borrowed loan of Rs.3,50,000/- from him for his business purpose and towards discharge of the said debt he issued cheque Ex.P1 dated 15.07.2000 drawn on State Bank of India, Dollars Colony Branch, Bengaluru. The said cheque was presented by the complainant to the petitioner's Bank at Crl.R.P.No.498/2011 3 State Bank of Mysuru, Gayathrinagar Branch on 15.07.2000. On 17.07.2000, the bank dishonored the cheque with an endorsement "insufficient funds". The complainant issued notice dated 24.07.2000 as per Ex.P4 calling upon the accused to pay the cheque amount. The said notice sent through registered post was returned with endorsement "not claimed". The notice was sent under certificate of posting also as per receipt Ex.P6.
4. On filing the complaint, the trial Court summoned the accused and tried him. The accused admitted that the cheque Ex.P1 relates to his account and his signature on Ex.P1. But he denied availment of loan from the complainant. His defence was that he had purchased lathe machines from Sri Meenakshi Industries of which one Murthy was the Proprietor. He further claimed that towards the sale proceeds of lathe machines, as security he had issued three cheques including Ex.P1. He further claimed that Murthy misusing the said cheques set up the complainant and got filed false complaint. His further defence was that Crl.R.P.No.498/2011 4 the complainant had no capacity to lend Rs.3,50,000/-. His third defence was that the complainant works with one Tulsiram a money lender as recovery agent and Tulsiram got filed several similar complaints through the complainant against some other persons as he had lent un-accounted money.
5. The complainant was examined as PW.1 and on his behalf Ex.P1 to Ex.P11 were marked. Ex.P9 to Ex.P11 were the cheques issued by the accused in favour of Sri Meenakshi Industries which were also dishonoured. On confronting them to the accused, he admitted issuance of Ex.P9 to Ex.P11 and that they were dishonoured.
6. Accused himself got examined as DW.1 and got marked Ex.D1 and Ex.D2, the correspondence between himself and Mr.Murthy, the Proprietor of Sri Meenakshi Industries regarding purchase of machineries worth Rs.1,05,000/- and issuance of the cheques regarding that transaction. In the cross-examination of Crl.R.P.No.498/2011 5 PW.1 as well in the evidence, accused set up the same defence.
7. The trial Court on hearing the parties rejected the defence of the accused on the following grounds:
(i) When the accused admitted that the cheque belongs to his account and his signature on the same, presumption under Section 139 of the Negotiable Instruments Act, 1881 ('NI Act' for short) that the cheque was issued towards discharge of some legal liability arises.
(ii) Accused has failed to rebut the said presumption available under Section 139 of the NI Act by examining Murthy.
(iii) Three cheques allegedly issued to Murthy were Ex.P9 to Ex.P11 and therefore that defence fails.
8. Holding so the trial Court convicted the accused for the offence punishable under Section 138 of the NI Act and sentenced him to pay fine of Rs.4,75,000/-, in default, to undergo simple Crl.R.P.No.498/2011 6 imprisonment for four months. Out of fine amount of Rs.4,75,000/-. Rs.4,50,000/- was ordered to be paid to the complainant as compensation.
9. Accused challenged the said judgment before Fast Track Court-I, Bengaluru in Criminal Appeal No.655/2002. Learned Sessions Judge by the impugned judgment and order confirmed the order of conviction. However, modified the order of sentence reducing the fine amount to Rs.3,55,000/- and in default, sentenced to undergo simple imprisonment for four months. Further, the First Appellate Court awarded Rs.3,50,000/- to the complainant as compensation.
10. The grounds of confirmation of conviction by the First Appellate Court were as follows:
(i) Accused failed to place convincible evidence that the complainant had no lending capacity.
(ii) According to the accused himself, the complainant is doing money lending business without valid licence. Therefore, his defence regarding lending capacity is inconsistent.Crl.R.P.No.498/2011
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(iii) Accused has failed to prove that Ex.P1 was issued to Murthy towards purchase of machinery.
(iv) Fact of the accused not initiating any legal action against Murthy for misusing the cheque improbabalizes his defence.
(v) Notice Ex.P4 was issued to the admitted address of the accused. Therefore the same is presumed to be served. Non-controverting the allegations in the notice regarding lending of the money operates adversely against the accused.
(vi) By the circumstances listed above, the accused has failed to rebut the presumption under Section 139 of NI Act. Therefore, the trial Court was justified in convicting him.
11. Reiterating the grounds urged in the petition and by referring to the deposition of PW.1, Sri Srinivasa.D.C, learned Counsel for the accused seeks to assail the order of conviction and sentence passed by the Courts below on the following grounds:
(i) As per the evidence of PW.1 himself, at the time of the incident, he was hardly 26 years old. Crl.R.P.No.498/2011 8
(ii) Though PW.1 claims that he was working as Real Estate Agent and Travel Agent, he did not produce any material like certificate of registration with professional tax authorities to show that he was working as such and had any income.
(iii) As per the evidence of PW.1 himself he had with him only Rs.1,50,000/- and borrowed Rs.2,00,000/- from his father and lent Rs.3,50,000./- to the accused.
(iv) As per the evidence of PW.1, his father was a tailor. Absolutely, no evidence was placed to show that the father or the son had that much income to lend the money.
(v) Though PW.1 claimed that he had funds in his account, he did not produce his bank account statement. The evidence of PW.1 itself rebuts the presumption under Section 139 of NI Act.
(vi) When the complainant claims to have borrowed Rs.2,00,000/- from his father and lent Rs.3,50,000/-, simultaneously he claims to have lent Rs.2,35,000/- to Shashidhara Desai and another loan to Crl.R.P.No.498/2011 9 Prashanth and filed similar complaints against them.
That falsifies his case of lending money to the accused.
(vii) When the accused in the cross-examination of the complainant improbabalized the lending capacity of the complainant, the presumption under Section 139 of the NI Act stands rebutted. He can rely on such evidence of the complainant itself and need not lead defence evidence in that regard.
12. In support of his contention, he relies upon the following judgments:
(i) Basalingappa vs. Mudibasappa1
(ii) APS Forex Services Private Limited vs.
Shakti International Fashion Linkers & Ors.2
13. Per contra, Sri H.A.Manjunatha Prasanna, learned Counsel for the respondent-complainant seeks to justify the impugned order of conviction and sentence on the following grounds:
(i) When the accused admits that the cheque belongs to his account and his signature on the cheque, presumption under Section 139 and 118 of NI Act arise. 1
[2019] 5 SCC 418 2 [2020] AIR (SC) 945 Crl.R.P.No.498/2011 10 Therefore, the burden was on the accused to rebut the said presumption by examining Murthy which the accused did not do.
(ii) Even after filing of the complaint, the accused did not take action against Murthy for misuse of the cheque. That demolishes the defence of the accused regarding misuse of cheque by Murthy.
(iii) The alleged three cheques issued by the accused to Murthy were returned as Ex.P9 to Ex.P11 as admitted by the accused himself. Therefore, the accused failed to rebut the presumption.
(iv) When the presumption under Section 139 of NI Act is not rebutted, the defence of lending capacity looses significance. Even otherwise, the First Appellate Court rightly relied upon the suggestion of the accused himself to the complainant that he is doing money lending business.
14. In support of his contentions, he relies upon the following judgments of the Supreme Court:
(i) K.Bhaskaran v. Sankaran Vaidhyan Balan3 3 (1999) 7 SCC 510 Crl.R.P.No.498/2011 11
(ii) K.N.Beena vs. Muniyappan and Anr.4
(iii) APS Forex Services Private Limited vs. Shakti International Fashion Linkers & Ors.
15. As already pointed out, the facts that the cheque belonged to the account of the accused and his signature on the same were not disputed. Therefore, the only question in the case is whether presumption available under Section 139 of the NI Act stood rebutted.
16. Section 139 of the NI Act reads as follows:
"139. Presumption in favour of holder It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability."
17. Reading of the above provision makes it clear that on proof of receipt of cheque by holder a legal presumption that the cheque was received for discharge of debt or any liability has to be raised. How that burden has to be rebutted was dealt in Basalingappa's case referred to supra.
4AIR 2001 SC 2895 Crl.R.P.No.498/2011 12
18. Both the Courts below proceeded on the premise that when the accused contended that the cheques were issued to Murthy, it was incumbent on the accused to examine said Murthy to rebut the said presumption. The Courts below lost sight of the defence that the said Murthy has turned hostile to the accused and set up the complainant to file the complaint. Therefore, it was totally onerous to expect the accused to prove the role of Murthy in the transaction by examining him.
19. Whether the accused is bound to lead the defence evidence to rebut the presumption or he can rely on the evidence of the complainant himself to rebut the presumption has been dealt by the Hon'ble Supreme Court in Basalingappa's case referred to supra at para 23 of the judgment which reads as follows:
"23. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:-
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a Crl.R.P.No.498/2011 13 presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence.
The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden,
(v) It is not necessary for the accused to come in the witness box to support his defence."
(Emphasis supplied)
20. In the light of the above judgment, it is clear that the accused can rely on the evidence of the Crl.R.P.No.498/2011 14 complainant himself to rebut the presumption and to probabalize his defence.
21. In the case on hand, the accused had seriously disputed the lending capacity of the complainant-PW.1. PW.1 as on 16.12.2000 the date of sworn statement was stated to be hardly 26 years old. The cheque was allegedly issued on 15.07.2000. In his chief examination, PW.1 did not whisper anything about his lending capacity. In the cross-examination though he claimed that he was working as Real Estate Agent and Travel Agent and earning Rs.15,000/- to Rs.20,000/- per month from such business and he has bank statement to that effect, he did not produce that. He admits that he did not get himself registered for such professions with the concerned authorities by paying professional tax etc.
22. When in the notice and in the complaint, PW.1 claimed that he had lent his own funds, in his cross-examination he says that he borrowed Rs.2,00,000./- from his father. But he himself admits Crl.R.P.No.498/2011 15 that his father is running small tailoring shop and no evidence was adduced to show his father's lending capacity.
23. Though PW.1 admits that he has lent the loan to one Shashidhara Desai and Prashanth, in the cross-examination, he states that he does not know how much amount he advanced to Shashidhara Desai in 1999 which probabalizes the defence that the complainant is only a dummy holder of the cheques for the transactions of other money lenders. Further, he admitted that he lent Rs.2,35,000/- in December 1999 to Shashidhara Desai. On pooling Rs.3,50,000/-, how he could lend Rs.3,50,000/- to the accused and others simultaneously was neither explained nor proved. He claims to have lent some money to one Prashanth also. He admits that he filed similar cases against Prashanth & Shashidhara. At another breath he claims he lent Rs.3,50,000/- to the accused and some amount to Shashidhara Desai alone.
Crl.R.P.No.498/201116
24. PW.1 admits that Tulsiram is carrying on money lending business and licence is essential for doing money lending business. However, the First Appellate Court misinterpreted such suggestions of PW.1 as the admissions of the accused that the complainant is money lender. Whereas the defence of the accused was that the complainant was proxy to Tulsiram to recover the loan lent by him to others. PW.1 further states that he does not remember that in the year 1999 how much amount was involved in that money transaction.
25. The aforesaid admissions of PW.1 themselves raised doubts about his lending capacity and lending of the loan, consequently, the presumption under Section 139 of the NI Act stood rebutted by the admissions of the complainant in his cross-examination. In such event, the burden reversed to the complainant to prove his lending capacity as held by Hon'ble Supreme Court in Basalingappa's case referred to supra.
Crl.R.P.No.498/201117
26. In APS Forex Services Private Limited's case referred to supra in para 6.4 of the judgment, the Hon'ble Supreme Court has held as follows:
"6.4 Now so far as the reliance is placed by Learned Counsel appearing on behalf of the accused on the decision of this Court in the case of Basalingappa (supra), on going through the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand and/or the same shall not be of any assistance to the accused. In that case before this Court, the defence by the accused was that the cheque amount was given by the complainant to the accused by way of loan. When the proceedings were initiated under Section 138 of the N.I. Act the accused denied the debt liability and the accused raised the defence and questioned the financial capacity of the complainant. To that, the complainant failed to prove and establish his financial capacity. Therefore, this Court was satisfied that the accused had a probable defence and consequently in absence of complainant having failed to prove his financial capacity, this Court acquitted the accused. In the present case, the accused never questioned the financial capacity of the complainant. We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 of the N.I. Act about the presumption of Crl.R.P.No.498/2011 18 legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque. That is not a case here."
(Emphasis supplied)
27. Therefore, this case is fully covered by the judgments of the Hon'ble Supreme Court in Basalingappa's case and APS Forex Services Private Limited's case referred to supra.
28. Learned Counsel for the complainant submits that APS Forex Services Private Limited's case, presumption was raised in favour of the complainant. The reading of the judgment shows that in that case defence of lack of lending capacity of the complainant was not raised. Therefore, the Hon'ble Supreme Court distinguished the judgment of Basalingappa's case and held that presumption under Section 139 of NI Act was not rebutted.
Crl.R.P.No.498/201119
29. In K.Bhaskaran's case relied upon by the learned Counsel for the complainant, the defence was that the complainant had snatched the cheques and misused them and there was no defence about lending capacity. Similarly K.N.Beena's case referred to supra does not indicate that any defence regarding lending capacity of the complainant was raised. Therefore the said judgment is also not applicable.
30. In the light of the discussions made above, the order of sentence passed by the trial Court and the First Appellate Court are contrary to the evidence on record and the judgments of the Supreme Court in Basalingappa's case and APS Forex Services Private Limited's referred to supra regarding the principle of rebuttal of presumption available under Section 139 of NI Act. Therefore, the petition is allowed.
The impugned orders of conviction and sentence passed by the trial Court and the First Appellate Court are hereby set aside.
Crl.R.P.No.498/201120
The petitioner accused is acquitted of the offence punishable under Section 138 of NI Act.
Fine amount, deposited by the accused if any, shall be refunded to him.
Sd/-
JUDGE ND/KSR