Karnataka High Court
Sri Naveen Chandra S/O Chikkamallaiah vs Sri S Ramesh S/O Sathyanarayana Shetty on 28 May, 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF MAY, 2018
BEFORE
THE HON'BLE MR. JUSTICE N.K. SUDHINDRARAO
CRL.A.No.277/2010
BETWEEN:
SRI NAVEEN CHANDRA
S/O CHIKKAMALLAIAH
AGED ABOUT 30 YEARS
R/OF VIDHYANAGAR
SIRA TOWN
TUMKUR DISTRICT.
...APPELLANT
(BY SRI V B SIDDARAMAIAH, ADVOCATE)
AND:
SRI S RAMESH
S/O SATHYANARAYANA SHETTY
AGED ABOUT 58 YEARS
R/O MAIN ROAD, SIRA TOWN
TUMKUR DISTRICT.
...RESPONDENT
(BY SRI H MUJTABA, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) CR.P.C BY THE ADVOCATE FOR THE APPELLANT
PRAYING TO SET ASIDE THE JUDGMENT DATED
22.1.2010 PASSED BY THE C.J.(JR.DN.) & JMFC., SIRA IN
CASE BEARING C.C.No.633/2006 ACQUITING THE
OFFENCE P/U/S 138 OF N.I.ACT. AND TO CONVICT THE
ACCUSED/RESPONDENT.
2
THIS CRIMINAL APPEAL COMING ON FOR HEARING
THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
The appeal is directed against the judgment and order passed in CC No.633/2006 by Civil Judge (JD) & JMFC, Sira wherein the complaint presented by one Naveen Chandra came to be rejected and the accused stood acquitted on 22.01.2010.
2. In order to avoid confusion and overlappings, the parties hereafter are referred to in accordance with the rankings held by them in the Trial Court.
3. A criminal complaint under Section 200Cr.P.C. came to be filed by the complainant on 21.6.2006 claiming that the accused borrowed an amount of Rs.2.00 lac from the complainant and issued a cheque bearing No.594104 for the amount of Rs.2.00 lac dated 6.12.2005 drawn on State Bank of Mysore, Chitradurga in favour of the complainant. On presentation, it came 3 to be dis-honoured by the bank for 'insufficient funds'. The complainant came to know about the dishonour on 9.12.2005 when memo was issued by the bank. The complainant issued a notice on 9.12.2005 through RPAD and COP and received by the accused. But the amount was not paid. The complainant initiated the proceedings claiming that the accused committed an offence under Section 138 of Negotiable Instrument Act in issuing a cheque for Rs.2.00 lac in the name of complainant in discharge of a debt that was legally recoverable.
4. The complainant presented the complaint on 21.1.2006 as the accused failed to comply with the legal obligations. The oral evidence that was available to the learned Trial Judge is, the oral evidence of complainant himself as PW1 and that of R. Ranganath as PW2. The documents that were exhibited are Exs.P1 to P7. Incidentally, accused neither filed the written statement 4 nor adduced oral evidence. With the said materials on hand, the Trial Judge acquitted the accused under Section 255 (1) Cr.P.C. for the offences punishable under Section 138 of NI Act.
5. The lower court records were received. I have perused the same.
6. Heard Sri.V.B.Siddaramaiah, learned counsel for appellant and Sri. H. Mujtaba, learned counsel for respondent.
7. Learned counsel Sri.V.B.Siddaramaiah submits that signature on the cheque is not disputed. The accused has not led oral evidence nor furnished documentary evidence. Thus, the complainant is strongly accompanied by the presumption available to a holder in due course.
8. The complainant has reiterated the averments made in the complaint in his sworn testimony in the 5 Chief examination. He speaks regarding friendship existed between the complainant and the accused, request by the accused for financial assistance towards the education of the later and the occupation of his father. Further portion in the cross examination relates to the employment, status of his father as an Assistant and source of finance and complainant claim that he had kept Rs.90,000/- in the Bank and Rs.1.10,000/- at house.
9. Learned counsel for complainant submit that complainant is a Money Lender and he has not issued any forms and declaration and related documents.
10. In the circumstances and the facts of the case, the main point for consideration would be, whether debt is legally recoverable and the cheque was issued in discharge of an existing debt.
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11. Learned Trial Judge has also observed regarding the plea advanced by the accused (may be through addressing arguments). It is the claim of the accused that the accused forwarded the defence that, somewhere during 2005 borrowed Rs.1.00 lac from the father of the complainant and had issued a cheque for Rs.1,34,500/- to the mother of the complainant. The said cheque was issued in the circumstances when two sites were sold by the accused to the mother of the complainant and she insisted that cheque was required as a security for performance of obligation of procuring signature of the brother of the accused to the sale deed. But the brother of the accused did not give his consent nor signed the documents. Hence, the scores are settled by the complainant by resorting to file complaint under Section 138 of Negotiable Instrument Act. However, this defence comes for the first time in the evidence, when the complainant was cross examined by the learned counsel for the accused. Regard being had to 7 the fact that the said version through suggestions was denied by the complainant. As a proof of such suggestion, the accused has not produced any documents nor has entered the witness box to substantiate his stand as a response to complaint.
12. Learned counsel for accused would submit that when the legal notice Ex.P4 was issued date of lending and issuance of cheque are mentioned as 6.12.2005 which is surprising and lie revealing statement. Thus, the counsel for accused submitted that the version which are contradictory by themselves disregard the entire complaint and the version. With all the events which surface the concept of legally recoverable debt takes its position be it cheque, promissory note or will as a negotiable instruments. The right has to be exercised within the time stipulated or expiry of the cause of action as when it becomes time barred which losses its enforceable nature and claim 8 for debt ceases to be legally recoverable debt. In the same way, it is necessary to peruse the Karnataka Money Lenders Act, wherein Section 11 of the Act is as under:
[xxxxx] Suits by money lenders not holding licence-(1)After the expiry of six months from the date on which this Act comes into force, no court shall pass a decree in favour of a money lender in any suit to which this Act applies, filed by a money lender, unless the court is satisfied that at the time when the loan or any part thereof to which the suit relates was advanced (and on the date such suit was filed), the money lender held a valid licence.
[(2)xxxxxx.
(3)xxxxx (4)xxxxx] (5) Nothing in this section shall affect.9
(a) Suits in respect of loans advanced by a money lender before the date on which this Act comes into force;
(b) the powers of an official receiver, an administrator or a court under the provisions of the Karnataka Insolvency Act, 1925, or other corresponding law in force in any area of the State, or of a liquidator under the Companies Act, 1956, to realize the property of a money lender.
13. It is well known concept that where there is right, remedy is there obijus ibi remedium. When right is established or identified it carries the remedy which is the means of enforcement otherwise right has no value. On the other hand, in commercial transaction, certain rights looses their efficacy and enforceability because of the happening of certain events. For example, in a money transaction right to recover a debt by the lender is also a duty to repay of the borrower. However, when 10 a period of three years is completed, right to recover debt gets expired and it would no more remain to be legally enforceable right. However, under Section 25(b) of the Indian Contract Act, 1872, it can be validated and terms to pay time barred debts is an exception to the Rule of consideration.
14. But when there is no acknowledgement of debt becomes time barred and not enforceable. In the same way, for a person who lends money and carries on the business of money lending, he is termed to be a money lender and it is mandatory on his part to possess a valid money lending licence issued by the competent authority i.e. the Assistant Registrar of Money Lenders.
15. This may not be applicable for an isolated transaction of lending or friendly borrowing which are totally not connected to money lending. 11
16. Where it is regular money lending requires valid licence. It is in this segment, the complainant is slated on loosing platform as he has admitted himself to be a regular money lender in positive terms during cross examination dated 26.2.2009 which is in Kannada version and he states that he was doing money lending transaction and he had money because of this money lending transaction and he is doing money lending alone and he also has obtained money lending licence and has produced the same before the Court. However, he has not shown the payment of money in the Income Tax returns filed under the Income Tax Act.
17. Insofar as documents filed by the complainant are concerned, they are Exs.P1 to P6.Ex.P1-cheque; Ex.P2-Memo of TGMC Bank Limited; Ex.P3- Endorsement; Ex.P4-Legal Notice, Exs.P5 and P6- Postal receipts and Ex.P7-acknoweldgement. Thus the stand of the complainant gets weekend because of the 12 discrepancy in the legal notice Ex.P4 and in the complaint Ex.P1. On perusal of the documents filed by the complainant clearly goes to show that he has not produced money lending licence issued by the competent authority and learned counsel for appellant Sri. Siddaramaiah on query submits that money lending licence was not filed. Thus, in the circumstances, it is loud and clear that the complainant is a money lender and if he has lent money of Rs.2.00 lac which stands as a part of his money lending business. But he did not possess money lending licence. Thus, by virtue of Section 11 of the Money Lenders Act, I hold that debt is not recoverable and in view of non establishing of legally recoverable debt, the proceeding under Section 138 of Negotiable Instrument Act losses its efficacy and validity. Hence, I do not find that the findings or the order passed by the learned Trial Judge warrants for interference. The appeal is devoid of merits and it is 13 liable to be rejected. Hence, I proceed to pass the following ORDER Appeal is rejected.
Send back records to the Trial Court immediately.
Sd/-
JUDGE tsn*