Karnataka High Court
Smt H N Dhanalakshmi vs Sri K N Shankar on 31 August, 2018
Author: Mohammad Nawaz
Bench: Mohammad Nawaz
1
Crl.A. No.672/2010
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF AUGUST 2018
BEFORE:
THE HON'BLE MR.JUSTICE MOHAMMAD NAWAZ
CRIMINAL APPEAL No.672/2010
BETWEEN:
1. SMT. H.N. DHANALAKSHMI,
W/O LATE C. MARAIAH,
AGED ABOUT 49 YEARS,
RESIDING AT NO.85,
III MAIN, 3RD CROSS,
BHIKAASI PURA, ISRO LAYOUT,
BANGALORE - 560 061.
2. SRI. M.H. SANDESH,
S/O LATE C. MARAIAH,
AGED ABOUT 26 YEARS,
RESIDING AT NO.85,
III MAIN, 3RD CROSS,
BHIKAASI PURA, ISRO LAYOUT,
BANGALORE - 560 061.
3. SMT. M. HARSHA,
D/O LATE C. MARAIAH,
AGED ABOUT 31 YEARS,
RESIDING AT NO.85,
III MAIN, 3RD CROSS,
BHIKAASI PURA, ISRO LAYOUT,
BANGALORE - 560 061. ... APPELLANTS
[BY SRI. J. ARAVIND BABU, ADVOCATE]
AND:
SRI. K.N. SHANKAR,
S/O LATE NANJUNDA SASTRY,
AGED ABOUT 57 YEARS,
CIVIL ENGINEER,
RESIDING AT NO.570,
2
Crl.A. No.672/2010
SAJJAN RAO ROAD,
V.V. PURAM,
BANGALORE - 560 004. ... RESPONDENT
[BY SRI. M.K. VENKATARAMANA, ADVOCATE]
***
THIS CRIMINAL APPEAL IS FILED U/S 378(4) OF THE CODE
OF CRIMINAL PROCEDURE, PRAYING TO SET ASIDE THE
JUDGMENT AND ORDER DATED 05.04.2010 PASSED BY THE XXII
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE AND XXIV
ADDITIONAL SMALL CAUSES JUDGE, BANGALORE CITY ETC.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT, THIS DAY MOHAMMAD NAWAZ J.,
PRONOUNCED THE FOLLOWING:
DATE OF RESERVED THE JUDGMENT : 27.07.2018
DATE OF PRONOUNCEMENT OF THE JUDGMENT : 31.08.2018
JUDGMENT
This appeal is preferred challenging the Judgment and Order dated 05.04.2010, passed by the Court of XXII Addl. Chief Judicial Magistrate and XXIV Addl. Small Causes Judge at Bengaluru City in C.C. No.15328/2004, wherein the learned Magistrate dismissed the complaint filed under Section 200 of Cr.P.C. for the offences under Sections 138 r/w. 142 of the Negotiable Instruments Act, 1881 ['N.I. Act' for short].
3Crl.A. No.672/2010
2. The brief facts of the case are that;
The accused/respondent borrowed a sum of Rs.4,00,000-00 from the original complainant and in discharge of the same, the accused issued a cheque bearing No.941339 dated 28.12.2003 for the said sum, drawn on Indian Bank, Basvanagudi Branch, Bengaluru. When it was presented through his Banker i.e., State Bank of Mysore, Vikramnagar Branch, Bengaluru, the said cheque came to be dishonoured with an endorsement "payment stopped by drawer". The same was communicated to the complainant on 30.03.2004, which led to the issue of a notice to the accused on 12.04.2004 by RPAD which was said to be served on 27.04.2004. However, there was a failure of payment within the prescribed time even after receipt of the notice and hence the complaint was filed for prosecution of the accused under Section 138 of the N.I. Act.
In the course of the proceedings, the original complainant was reported to be dead and hence, the 4 Crl.A. No.672/2010 appellants herein were impleaded as legal representatives of the complainant and the proceedings were continued.
The 2nd appellant, one of the sons of the original complainant gave evidence as P.W.1 and relied on 5 documents i.e., Exs.P1 to 5. The accused was examined himself as D.W.1. The trial Court by Judgment and Order dated 05.04.2010 dismissed the complaint, which is impugned herein.
3. I have heard the learned counsel Sri. J.Aravind Babu, appearing for the appellants and the learned counsel Sri. M.K. Venkataramana, appearing for the respondent.
4. Learned counsel appearing for the appellants would contend that the complainant Sri. C. Maraiah and the accused were friends. The accused was in need of a sum of Rs.4,00,000-00 as his tenant was vacating the house. So, he approached the complainant, who 5 Crl.A. No.672/2010 provided that amount and the accused promised him that he will repay when another tenant occupies the building and in discharge of the said liability, the cheque in question was handed over to the complainant. However, subsequently since the payment was stopped by the drawer of the cheque, the cheque was returned which amounts to an offence punishable under Section 138 of the N.I. Act. He further contended that, the learned trial Judge erred in not convicting the accused though it was found that the accused had issued the cheque-Ex.P1 to the complainant, which fact is admitted by the accused himself and the evidence on record establishes that the cheque was issued in discharge of legally enforceable debt. That even if it is to be accepted that the cheque was issued as security, then a presumption arises in favour of the complainant. He further contends that since the cheque was returned with an endorsement "payment stopped by the drawer", it is clear that the accused had the knowledge of issuance of the cheque. According to the learned counsel, the 6 Crl.A. No.672/2010 reasons assigned for dismissing the complaint are not in accordance with law. In support of his argument, the learned counsel relied on the following citations:
1. AIR 2015 SUPREME COURT 2240; T. Vasanthakumar Vs. Vijayakumari.
2. AIR 2006(NOC) 1420 (KANT.); Smt. Umaswamy Vs. K.N. Ramanath.
3. ILR 2007 KAR 311; Mr. Umraz Khan Vs. Mr. A. Jameel Ahmed and Another.
4. (2001)8 Supreme Court Cases 458; K.N. Beena Vs. Muniyappan and Another.
5. ILR 2006 KAR 1730; Dr. B.V. Sampathkumar Vs. Dr. K.G.V. Lakshmi.
6. ILR 2008 KAR 3865; Sri. Ashok Kumar Vs. Dr. T.R. Bhageerathi.
7. AIR 2000 KARNATAKA 169; H. Maregowda and etc. Vs. Thippamma and others.
On the other hand, learned counsel appearing for the respondent would contend that there is no legally enforceable debt existing between the parties. The notice said to have been issued by the complainant was not at all received by the accused. He further submits 7 Crl.A. No.672/2010 that there is absolutely no document to show that the accused received such a huge sum from the complainant and there is no proof with regard to deposit/withdrawal of the said amount in any bank. It is his contention that there is no money transaction between the accused and the complainant. Hence, he sought to dismiss the appeal and in support of his submission, the learned counsel for the respondent relied on the following citations.
1. AIR 2009 SUPREME COURT 1518; M/s.
Kumar Exports Vs. M/s. Sharma Carpets.
2. 2014 CRI.L.J. 2304; John K. Abraham Vs. Simon C. Abraham and another.
3. 2014(2) Bankers' Journal 721; Ramdas Vs. Krishnanand.
4. 2015 CRI.L.J. 912; K. Subramani Vs. K. Damodara Naidu.
5. 2011 CRI.L.J. 552; Amzad Pasha Vs. H.N. Lakshmana.
6. 2016(1) KCCR 196; Shriram Transport Finance Company Limited, Bangalore Vs. Mahadevaiah.
5. That the averments made in the complaint are to the effect that the accused was the friend of the 8 Crl.A. No.672/2010 complainant and he borrowed a sum of Rs.4,00,000-00 from the complainant and in discharge of the legally enforceable debt, issued a cheque bearing No.941339 dated 28.12.2003 for Rs.4,00,000-00 drawn on Indian Bank, Basavanagudi Branch, Bengaluru. The said cheque was deposited by the complainant through his Banker i.e., State Bank of Mysore, Vikramnagar Branch, Bengaluru and the same came to be dishonoured with an endorsement "payment stopped by the drawer". It was communicated to the complainant on 30.03.2004 and a legal notice was issued on 12.04.2004 to the accused by RPAD demanding him to pay the value of the cheque together with interest within 15 days from the date of receipt of the said notice. Though the notice was served on 27.04.2004, there was failure on the part of the accused to make the payment.
6. During the course of the proceedings, since the original complainant passed away, his legal representatives came on record. P.W.1 is one of the 9 Crl.A. No.672/2010 sons of the original complainant, who gave evidence by way of affidavit, reiterating the complaint averments. During the further examination, the dishonoured cheque was marked as per Ex.P1 along with the bank endorsement as per Ex.P2, copy of the demand notice as per Ex.P3, postal acknowledgement as per Ex.P4 and the death certificate of his father as per Ex.P5.
7. P.W.1 has deposed in his evidence that the accused neither replied to the notice nor paid the cheque amount. In the cross-examination, he has stated that his father was working as a Labour Inspector and retired in the year 2002 and his father was not doing any money transaction business. He further deposed that the accused was working as a Civil Engineer and he was known to his father. It was elicited that the accused was not doing any contract work in the Labour Department. His father died on 25.05.2005 and later applications were filed to continue the proceedings on behalf of his father. He has further stated that there was money transaction 10 Crl.A. No.672/2010 between his father and the accused. Since the tenant of the accused was vacating the house and in this regard, the accused approached his father and requested for the amount stating that the said amount will be returned as soon as another tenant occupied the house.
8. It is pertinent to see that P.W.1 in the cross- examination has also stated that his father i.e., the complainant had given Rs.4,00,000-00 to the accused in the month of June or July, 2003 in cash. However, no document was executed. But, subsequently it was done. He has further stated that on 21.12.2003 the accused gave the cheque to his father for a sum of Rs.4,00,000-00. His father got the said amount at the time of his retirement. He has also stated that for the said sum of Rs.4,00,000-00 there was no bank account opened and he has not produced any document to show that there was a sum of Rs.4,00,000-00 available in the bank account of his father. It is further elicited from P.W.1 that his father was an income tax assessee and he 11 Crl.A. No.672/2010 was not aware as to whether it was reflected in the income tax returns regarding the payment of Rs.4,00,000-00 to the accused.
9. P.W.1 has further stated that the entire amount was given in one instalment and apart from the accused, his father had not lent any amount to any other person. The said amount of Rs.4,00,000-00 was not drawn from the bank. However, he has denied that the writing on the cheque was not in the handwriting of the accused. He further denied the suggestion that his father was giving contract work to the accused and in the year 2000, for receiving commission from the accused his father received a signed blank cheque as a security and because of misunderstanding, the said cheque-Ex.P1 was misused by his father.
10. The accused, who gave evidence as D.W.1 has stated that he has not borrowed the amount of Rs.4,00,000-00 from the complainant at any point of time and therefore, there is no question of issuing the 12 Crl.A. No.672/2010 cheque as per Ex.P1. He has deposed that there was no money transaction between him and the complainant. The complainant took a blank signed cheque during 2001 as a security because he used to give some contract work. Ex.P1 is one of the said blank signed cheque which has been filled up and presented through his Banker and a false case was filed against him. In the cross-examination, he has stated that Ex.P1-cheque was given to the original complainant. It was elicited that he has not lodged any complaint with regard to misuse of the cheque by the complainant and there is nothing to show that the said cheque-Ex.P1 was given as a security to the complainant.
11. Relying on the decision reported in AIR 2015 Supreme Court 2240 in the case of T.Vasanthakumar Vs. Vijayakumari, learned counsel appearing for the appellant contended that the respondent/accused has not disputed the signature and therefore presumption under Section 139 of the N.I. Act would be attracted and 13 Crl.A. No.672/2010 therefore, the burden is on the accused to disprove the same. Relying on the decision reported in AIR 2006(NOC) 1420 (KANT.) in the case of Smt. Umaswamy Vs. K.N. Ramanath and the decision reported in ILR 2006 KAR 1730 in the case of Dr. B.V.Sampathkumar Vs. Dr. K.G.V. Lakshmi, learned counsel would contend that even if the cheque is issued as a security for payment, it is not a ground to exonerate the penal liability under Section 138 of the N.I. Act. Relying on the decision reported in (2001)8 Supreme Court Cases 458 in the case of K.N. Beena Vs. Muniyappan and another, learned counsel contends that in view of Sections 118 and 139 of the N.I. Act, the Court has to presume that the cheque had been issued for discharging a debt or liability. Further, relying on the decision reported in AIR 2000 KARNATAKA 169 in the case of H. Maregowda and etc. Vs. Thippamma and others, learned counsel contended that the instrument may be wholly blank or incomplete and the holder had the authority to make or complete the instrument as a 14 Crl.A. No.672/2010 negotiable one. Relying on the decision reported in ILR 2007 KAR 311 in the case of Mr. Umraz Khan Vs. Mr. A. Jameel Ahmed and Another, learned counsel contended that the accused has not led in any contra evidence to prove that he has not received any notice. Further, relying on the decision reported in ILR 2008 KAR 3865 in the case of Sri. Ashok Kumar Vs. Dr. T.R. Bhageerathi, learned counsel for the appellants submitted that the legal representative of the deceased payee or holder in due course are entitled to file a complaint under Section 142 of the N.I. Act for the offence punishable under Section 138 of the N.I. Act.
12. Learned counsel appearing for the respondent relying on the decision reported in AIR 2009 SUPREME COURT 1518 in the case of M/s. Kumar Exports Vs. M/s. Sharma Carpets contended that from the evidence on record it can be gathered that the debt did not exist and to rebut the statutory presumption, accused is not expected to prove his defence beyond 15 Crl.A. No.672/2010 reasonable doubt. He submits that in the present case since cheque was not issued for discharge of any liability, the trial Court has rightly passed the order of acquittal. Further, relying on the decision of the Hon'ble Supreme Court reported in 2014 CRI.L.J. 2304 in the case of John K. Abraham Vs. Simon C. Abraham and another, he contends that even in the present case it is not shown as to who wrote the contents of the cheque and where the transaction took place. Further relying on the decisions of the Hon'ble Supreme Court reported in 2014(2) Bankers' Journal 721 in the case of Ramdas Vs. Krishnanand and 2011 CRI.L.J. 552 in the case of Amzad Pasha Vs. H.N. Lakshmana, learned counsel for the respondent contended that the complainant giving hand-loan to the accused is not at all supported by any material on record and the complainant had no source of income and therefore, adverse inference can be drawn against the complainant. Further relying on the decision of the Hon'ble Supreme Court in 2015 CRI.L.J. 912 in the case of K. Subramani Vs. K. 16 Crl.A. No.672/2010 Damodara Naidu, contended that the complainant had failed to prove that there is a legally recoverable debt payable by the accused as the complainant himself had no source of income to lend a sum of Rs.4,00,000-00. Learned counsel for the respondent further relying on the decision reported in 2016(1) KCCR 196 in the case of Shriram Transport Finance Company Limited, Bangalore Vs. Mahadevaiah, contends that the penal provision of Section 138 of N.I. Act could be attracted only when the complainant proves that the cheque was issued for discharge of any debt or other liability and in the present case since it is not established by the complainant, the Judgment and Order of acquittal passed by the trial Court does not suffer from any illegality.
13. From the evidence and the material on record it is seen that the complainant was not doing any money lending business. However, according to P.W.1, there was money transaction between the complainant and the accused. According to P.W.1, the complainant had paid 17 Crl.A. No.672/2010 a sum of Rs.4,00,000-00 in cash in the month of June or July, 2003. However, admittedly, there was neither any written document nor any cheque issued on the said date by the accused. Even according to P.W.1 the cheque is said to be issued on 21.12.2003. However, Ex.P1- cheque is dated 28.12.2003. According to P.W.1, the said amount of Rs.4,00,000-00 was received by his father at the time of his retirement but, he has admitted that his father has not opened any bank account and there is no document to show that his father had a sum of Rs.4,00,000-00 in any bank account. If the said amount of Rs.4,00,000-00 which was paid to the accused was received by the complainant at the time of his retirement and the said money was given to the accused, then there would not have been any difficulty for the complainant to establish the same and to show that there was a legally enforceable debt. P.W.1 has further stated in his cross-examination that he has not aware as to whether his father had shown the payment of Rs.4,00,000-00 to the accused in the income tax returns. 18 Crl.A. No.672/2010
14. According to the accused, the complainant had received a blank signed cheque as a security for the purpose of receiving commission as he was given contract work to the accused and the said cheque was misused by the complainant. To attract an offence under Section 138 of the N.I. Act, it has to be established that there was a legally enforceable debt or other liability existed between the parties. It is no-doubt the Court can presume that the cheque had been issued for discharging debt or liability. However, the said presumption could be rebutted by the accused by proving the contrary as has been done in the present case. This Hon'ble Court in the case of Shriram Transport Finance Company Limited, Bangalore Vs. Mahadevaiah [Supra] at para 10 has held as under:
"The presumption contained in Section 139 of N.I. Act is rebuttable one. It can be rebutted either by direct evidence or by the attendant circumstances. The complainant has to prove that the cheque which bounced was issued for discharging a 19 Crl.A. No.672/2010 debt or legal liability in whole or in part. The penal provision of Section 138 of N.I. Act could be attracted only when the complainant proves that the cheque in question was issued "for discharge in whole or in part of any debt or other liability".
Failing to prove the debt or legally enforceable liability on the part of the accused satisfactorily, the complainant-
financier had not made out the offence against the accused. When the complainant was not forthcoming with definite evidence, the penal provisions would not be attracted. The dishonour of
cheque issued in consideration of future liability would not constitute an offence under Section 138 of N.I. Act. The material words in Section 138 of N.I. Act, "a cheque drawn for discharge of whole or in part of any debt or liability" should be interpreted to mean only the past or current liability existing at the time when the cheque is issued. The complainant did not produce hire purchases document and the documents sought by the accused. In the instant case, some facts are missing.
20Crl.A. No.672/2010
Though the presumptions weigh in favour of the drawee of the cheque, yet the complainant is required to present his case by cogent evidence. In this case, the complainant has not produced all the relevant documents before the Court. The essential requisites of a debt are i) an ascertained or readily calculable amount;
ii) an absolute qualified and present liability in regard to that amount with the obligation to pay forthwith or in future within a time certain; iii) the obligation must have accrued and subsisting and should not be that which is merely accruing."
The complainant has failed to establish that the cheque was issued by the accused for discharging legally enforceable debt. The payment of Rs.4,00,000-00 to the accused has not been established by acceptable material. The accused had not only denied having borrowed the said amount, but also rebutted the presumption by proving the contrary. According to P.W.1, the amount was paid in the month of June or July, 2003. Admittedly, 21 Crl.A. No.672/2010 the cheque is dated 28.12.2003. It is no-doubt even if the cheque was issued as a security for repayment, it cannot be said that no prosecution would lie. However, issuance of the cheque in respect of a legally enforceable debt has to be proved in accordance with law. As observed by the Hon'ble Supreme Court in the case of Ramdas Vs. Krishnanand [supra], even in the present case, claim of the complainant giving hand loan to the accused is not supported by any other material on record. Further, the complainant has failed to prove that there was any legally enforceable debt payable by the accused. The complainant has not placed any evidence to show that he had financial capacity to lend an amount of Rs.4,00,000-00 as admittedly no document evidencing the loan transaction has come into existence. As the complainant has failed to prove that the cheque in question was issued for discharge in whole or in part of any debt or liability, it cannot be held that the trial Court was in error in dismissing the complaint. 22 Crl.A. No.672/2010
Considering the entire evidence and material on record, I am of the view that there is no merit in this appeal and accordingly the same is dismissed as devoid of merits.
Sd/-
JUDGE Ksm*