IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF FEBRUARY 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY CRIMINAL APPEAL No.981 OF 2010 BETWEEN:
D.A.Manjunatha S/o. Dyamanna, Aged about 38 years, R/o. MIG-246, HUDCO Colony, Vinobanagar, Shivamogga. …Appellant (By Sri. Nataraj C.D., Advocate for Sri. Pruthvi Wodeyar, Advocate) AND:
M.Govindaswamy S/o. Muniswamy, Aged about 49 years, Prop:Shalimar Hair Dresses, Opp:Ravi Polyclinic, Nehri Road, Durgigudi, Shivamogga. …Respondent (By Sri. P.N.Harish, Advocate) This Criminal Appeal is filed under Section 378(4) of Cr.P.C praying to set aside the impugned judgment of acquittal order dated:05.07.2010 passed by the III-Addl. Civil Judge and JMFC, Shivamogga in C.C.No.1393/2009 – acquitting the respondent/accused for the offence punishable under Section 138 of N.I.Act.
This Criminal Appeal coming on for Hearing, this day, the Court delivered the following:
JUDGMENT In the complaint filed by the present appellant under Section 200 of Code of Criminal Procedure, against the present respondent, for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as `N.I.Act’), the learned III Additional Civil Judge and JMFC, Shimoga (hereinafter for brevity referred to as `trial Court’), in C.C.No.1393/2009, pronounced the judgment of acquittal on 05.07.2010. It is against the said judgment of acquittal, the complainant has preferred this appeal.
2. The summary of the case of the complainant in the trial Court is that the accused approached him with a request for a hand loan of a sum of `2 lakhs to be advanced to his shop and its decoration. Considering the said request, the complainant advanced a hand loan of a sum of `2 lakhs to the accused. The said loan was promised to be repaid to the complainant within three months by the accused. On the same day, accused also issued a post-dated cheque to the complainant bearing No.171385, dated 15.5.2000, for a sum of `2 lakhs, favouring the complainant and drawn on State Bank of Mysuru, Shivamogga. When the said cheque presented for realisation on 15.5.2000, the same came to be dishonoured with the Banker’s endorsement “insufficient funds”. Thereafter, the complainant issued a legal notice to the accused through his counsel. The accused sent an untenable reply to the notice, however, did not repay the cheque amount which constrained the complainant to institute a complaint against him for the offence punishable under Section 138 of N.I.Act.
3. To prove his case, the complainant got himself examined as PW-1 and two other witnesses as PW-2 and PW-3 and got marked documents from Exs.P-1 to P-11. The accused got himself examined as DW-1 and two other witnesses as DW-2 and DW-3 and got marked documents from Ex.D-1 to D-4. After hearing both side, the trial Court by its impugned judgment dated 5.7.2010, acquitted the accused of the alleged offence. It is against the said judgment, the appellant has preferred this appeal.
4. The lower Court records were called for and the same are placed before this Court.
5. Heard the learned counsel from both side and perused the materials placed before this Court.
6. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.
7. The complainant got himself examined as PW-1.
In his examination-in-chief, he has reiterated the contents of the complaint stating that the accused had availed a hand loan of `2 lakhs and towards the repayment of the same, he had issued the cheque in question which was marked by him at Ex.P-1. When presented for realisation, the said cheque came to be dishonoured with the Banker’s endorsement at Ex.P-2 with the reason “insufficient funds”. Demanding the payment of the cheque amount, he issued a legal notice as per Ex.P-3. However, without meeting the demand, the accused sent an untenable reply as per Ex.P-5. PW-1 has also stated that the accused had issued him a notice dated 2.5.2000, demanding return of the Promissory Note and the cheques, which he has marked at Ex.P-7. His reply to the said notice, the complainant has marked as Ex.P-8.
8. The complainant also got examined one Sri Ramesh Kori, Manager of State Bank of Mysuru, Shivamogga, as PW-2, who has spoken about dishonour of the cheque at Ex.P-1 when presented for realisation and in this direction, his bank has issued an endorsement as per Ex.P-2.
9. PW-3 – Smt.Shobha, is another employee of D.C.C. Bank, Shivamogga, who has stated that the cheque at Ex.P-1 when sent for realisation was returned dishonoured along with endorsement at Ex.P-2.
10. The accused got himself examined as DW-1, wherein he has stated that he had taken a loan of `10,000/- only from the financial establishment that was being run by the complainant at that time. Apart from him, his elder brother by name M.Raju has also availed a loan of `55,000/- from the complainant. Their friend by name Govind had also availed the loan from the complainant. Mentioning those three loan transactions and outstanding liability, the complainant had written him a letter as per Ex.D-1. The witness has further stated that in order to repay those loan amount, an immovable property was pledged by his brother to the complainant and after clearance of the said loan, a Deed of Release was also got executed in their favour, which document the witness has marked as Ex.D-2 and Ex.D-3. He has also stated that, demanding the return of on demand Promissory Note and blank cheques, he had also issued a legal notice to the complainant, which he has marked as Ex.D-4. The witness has specifically stated that since twentyfive years, he has been running a Hair Cutting Saloon and has not availed the alleged loan of `2 lakhs from the complainant. He has specifically stated that the cheque at Ex.P-1 was the one issued during 1995 to the complainant when he availed a small loan from the complainant.
11. In his support, the accused got examined his elder brother Sri M.Raju as DW-2 and his alleged friend – Sri S.C.Govind as DW-3. Both these witnesses in their examination-in-chief in the form of affidavit evidence have supported the case of the accused stating that the accused had availed a loan only for a sum of `10,000/- from the complainant, while they too had availed some loan from the very same complainant. It is towards repayment of all the three loans raised by them from the complainant, an immovable property was conveyed to the complainant vide Ex.D-2. After clearance of the loan, vide Ex.D-3, a Release Deed was got executed in their favour. As such, there is no loan transaction as contended by the complainant in his complaint.
Both these witnesses were subjected to a detailed cross-examination.
12. Learned counsel for the appellant/complainant in his argument submitted that the very inaction on the part of the accused in not taking steps to recover the demand Promissory Note and alleged blank cheques, creates a doubt in his defence and further the undisputed fact of the accused executing the cheque at Ex.P-1 supports the case of the complainant. He also submitted that Ex.P-7 – notice by the accused is purely an after thought which has been suitably replied by the complainant in his reply notice at Ex.P-8. Learned counsel further submitted that DW-2 and DW-3 have not supported the case of the accused in their cross- examination. He also submitted, if DW-3 had cleared his loan, then, why he has to give a reply as per Ex.P-11 stating that he had given his cheque as a security to PW-1. This creates a doubt that DWs.1, 2 and 3 having hand-in-glove and clandestinely have practiced fraud on the complainant.
13. Learned counsel for the accused/respondent in his arguments submitted that irrespective of the evidence of DWs-2 and 3, the very evidence of DW-1 and PW-1 when it is read in its entirety, goes to show that complainant/PW-1 himself is not clear as to when the alleged loan was given to the accused. He has given contradictory statement in that regard. Further, PW-1 has admitted that there was loan transaction between accused and himself prior to the year 1998 which supports the contention of the accused as stated in his notice at Ex.P-7 and further in his evidence as DW-1. He also submitted that the accused was throughout vigilant and as such, apart from issuing a legal notice at Ex.D-1, much prior to the presentation of the cheque for payment, had also lodged a police complaint. On the other hand, the complainant being admittedly a financier, it is highly unbelievable that without any documentation, he lends a huge amount as a loan to anybody, including the accused. As such, the trial Court has rightly held that the evidence of PW-1 does not inspire any confidence and as such, has acquitted the accused of the alleged offence.
14. A careful scrutiny of the complaint, as well examination-in-chief of the complainant as PW-1 go to show that the complainant neither in his complaint nor in his examination-in-chief as PW-1 has any where stated the date of the alleged loan said to have been given by him to the accused. It is not in dispute that the complainant was at some point of time doing a finance business in the name and style of M/s.Navanidhi Finance Corporation (Regd.). Thus, being an experienced financier, PW-1 not disclosing the exact date or month and year of the alleged loan transaction for a sum of `2 lakhs with the accused at the inception, creates a doubt in the case of the complainant.
Secondly, PW-1 in his cross-examination has specifically stated that he had only one loan transaction with the accused and the said loan transaction is the one under question which is for a sum of `2 lakhs. However, he has admitted in his further cross-examination about he being the author and owner of Ex.D-1, a letter issued by M/s.Navanidhi Finance Corporation owned by him as on 11.7.1998, wherein he has mentioned about one more loan transaction with the present accused which is shown to be of the dated 2.8.1995, for a sum of `10,000/-. Thus, the complainant at one breadth has stated that the alleged loan of a sum of `2 lakhs in question is the only loan transaction, however, he has admitted about the previous loan transaction which is reflected in Ex.D-1. According to the accused, it is with respect to the said loan transaction of the year 1995 which is reflected in Ex.D-1, the cheque in question was issued by him in its blank form and as a security.
Demanding the return of the said cheque, the accused has also issued a legal notice to the complainant as per Ex.P-7, which the complainant himself has produced and marked as Ex.P-7. In the said notice dated 2.5.2000, the accused at the very first opportunity has stated that the cheque in question was issued by him in their previous transaction between 1994-1997 and has sought for return of the cheque, as well as the demand Promissory Note and other documents executed by himself and his brother M.Raju and their friend one Sri Govinda. The same stand was also taken by the accused in his reply notice dated 26.5.2000 sent to the complainant as per Ex.P-5 as a reply to the legal notice sent by the complainant which is dated 22.5.2000 and marked it at Ex.P-3. Even in the said reply notice also, the accused apart from specifically denying that he had availed the loan of `2 lakhs from the complainant, has stated that all the amounts due to the complainant though had been repaid and he was requested for return of the cheque and all the documents, still the complainant had not returned the same. Thus, even in his reply notice also the accused has continued the same defence of categorically denying the alleged loan transaction of a sum of `2 lakhs said to have been lent to him by the complainant. The contents of Ex.P-5 and Ex.P-7 have not been specifically confronted to DW-1 in his cross-examination and denied by the complainant.
Thirdly, as observed above, the complainant neither in his complaint nor as PW-1 has stated as to when the loan was given to the accused by him. However, for the first time in his affidavit evidence as PW-1, he has stated that the loan in question was given by him in March 2000. He has further improved it in his cross-examination by adding that the said loan was given in the first week of March 2000. Interestingly, the very same witness in subsequent paragraph of very same cross-examination has specifically stated that the said loan was granted after the closure of M/s.Navanidhi Finance Corporation, which business he was running. He has also stated in the very same cross examination that the closure of said M/s.Navanidhi Finance Corporation was in June 2001. If the version of PW-1 has to be considered, then, the loan in question for a sum of `2 lakhs should be subsequent and after June 2001, whereas, according to PW-1 himself, it was in the month of March 2000 or first week of March 2000. Therefore, the very contradictory statement made by PW-1 himself in his evidence at different places injects more suspicion in his case in that regard.
Fourthly, the accused apart from issuing a notice at Ex.P-7 which was prior to the complainant presenting the cheque in question for realisation, has also continued the same stand in his reply notice at Ex.P-5. As already observed above, in both the notices, he has made it very clear that there was no such transaction of loan of a sum of `2 lakhs between him and the complainant. On the other hand, the conduct of the complainant who in his evidence at one place stated that the alleged loan of `2 lakhs in question was only a transaction between them, has subsequently admitted that there was one more loan transaction as evidenced in Ex.D-1. Thus, once again the complainant has shown that he has not approached the Court with clean hands and has suppressed main facts.
Fifthly, the accused apart from issuing legal notice as per Ex.P-7 and reply as per Ex.P-5, also has lodged a police complaint. No doubt, as contended by the learned counsel for the appellant, no documents evidencing lodging of the police complaint has been produced by the accused, but, the admission on the part of PW-1 in his cross-examination that the accused had lodged a complaint before the Superintendent of Police, Shivamogga, itself shows that the accused apart from taking legal recourse of issuing legal notice and demanding the return of the cheque, had also lodged a police complaint is a fact. PW-1 has also stated that in that connection, the police had summoned him and advised him to settle their dispute in the Court instead of complainant going to the house of the accused demanding for money.
The said statement made by none else than PW-1 go to show that the accused since beginning and much prior to the presenting of the cheque in question for realisation has been putting all his lawful efforts in securing the alleged blank cheque said to have been given by him to the complainant during the earlier loan transaction. However, the complainant has not returned the same. Thus, irrespective of the evidence of DW-2 and DW-3, who appears to have not supported the case of the accused in full in their cross-examination, the case of the accused could stand on its own leg in rebutting the presumption that was formed in favour of the complainant. As such, merely non-denial of the execution of the cheque at Ex.P-1 would not by itself establish the existence of legally enforceable debt. No doubt, the issuance of the cheque at Ex.P-1 may form a presumption in favour of the complainant under Section 139 of N.I.Act, however, in the light of the discussion made above, since the said presumption that was formed in favour of the complainant has been successfully rebutted by the accused, I do not consider that the complainant could able to establish the alleged guilt against the accused beyond reasonable doubt. The trial Court since has arrived at the same conclusion by properly appreciating the evidence led before it, I do not find any reason to interfere in it.
15. Accordingly, I proceed to pass the following order:
ORDER The Appeal stands dismissed as devoid of merits. The judgment of acquittal dated 5.7.2010, passed by the learned III Additional Civil Judge and JMFC, Shivamogga, in C.C.No.1393/2009, is confirmed.
The Registry is directed to transmit a copy of this judgment to the trial Court along with Lower Court Records without delay.
Sd/- JUDGE bk/-