IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF FEBRUARY 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY CRIMINAL APPEAL No.1165 OF 2010 BETWEEN:
D.Rajkumar S/o. Late Duggappa, Aged about 36 years, R/at D.No.514, Sri. Devraj Urs Layout, ‘C’ Block, Kondajji Road, Davanagere. …Appellant (By Sri. R.Srinivasa Gowda, Advocate) AND:
M.C.Ranadeva S/o. Kasiraj, Aged about 63 years, Occ: Retired Railway Station, Master, R/at Door No.28, ‘A’ Block, D.C.M. Township, Davanagere. …Respondent (By Sri.M.Rajashekar, Advocate) This Criminal Appeal is filed under Section 378(4) of Cr.P.C praying to set aside the order dated:15.04.2010 passed by the III Addl. Sr. C.J. & JMFC, Davanagere in C.C.No.527/09 (old C.C.No.2446/07) – 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 Addl.Senior Civil Judge & JMFC, Davanagere, (hereinafter for brevity referred to as `trial Court’), in C.C.No.527/2009 (old C.C.No.2446/2007), pronounced the judgment of acquittal on 15.04.2010. 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 was acquainted with him and that at his request, he gave a hand loan of a sum of `3,25,000/- to him in the third week of November 2006 to enable him to meet his family urgent necessities. Having agreed to repay the loan amount within five months, the accused had given him a post-dated cheque bearing No.247977, for a sum of `3,25,000/- on the very same day of the loan, but, putting the date of the cheque as 11.4.2007. When the said cheque was presented for realisation, the same came to be dishonoured with a banker’s endorsement “funds insufficient”. Thereafter, a legal notice was issued by the complainant to the accused demanding the repayment of the cheque amount. Since the accused/respondent instead of paying the cheque amount, sent an untenable reply, the complainant was constrained to initiate legal proceeding by instituting a case 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 got marked the documents from Exs.P-1 to P-11. The accused got himself examined as DW-1 and other three witnesses as DW-2 to DW-4 and Exs.D-1 to D-4 were marked. After hearing both side, the trial Court by its impugned judgment dated 15.04.2010, acquitted the accused of the alleged offence. It is against the said judgment, the appellant has preferred this appeal.
4. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.
5. Even though the appellant was being represented by his counsel, considering that the said learned counsel for the appellant on record having remained absent on several dates of hearing in this appeal of the year 2010, this Court by its order dated 23.1.2019, appointed the present counsel Sri R.Srinivasa Gowda, panel advocate from the High Court Legal Services Committee, Bengaluru, as an advocate for the appellant to proceed with the appeal of the appellant. Even though on the very same day, for the respondent also, panel advocate from the High Court Legal Services Committee was appointed, however, by the appearance of the regular counsel for the respondent, on a subsequent date, the panel advocate appointed for the respondent was permitted to retire.
6. Heard the arguments of learned counsel from both side and perused the materials placed before the Court.
7. Learned panel advocate for the appellant in his argument submits that the parties were knowing each other and by oral, as well the documentary evidence, the complainant has proved the alleged loan transaction. It is not in dispute that the cheque in question was issued by the accused and the same came to be dishonoured for the reason “funds insufficient”. It is also not in dispute that a legal notice as required under Section 138(b) of N.I.Act was also issued by the complainant to the accused. Thus, the alleged issuance of cheque and its dishonour as “funds insufficient” has remained undisputed fact.
Learned counsel further submitted that DW-4 who is said to be a common friend of both parties has not supported the defence of the accused. A mention about the alleged loan transaction is also made by the complainant in a matrimonial proceeding before a different Court of law, as such, the genuineness of the loan transaction is further corroborated. He also submitted that not taking of any action against alleged Sri Chennakeshava and Sri Naveen by the accused for the alleged recovery of cheques from them also shows that the defence taken by the accused is untenable.
8. Learned counsel for the respondent in his argument submitted that complainant was totally stranger to the accused and the said stand was taken by the accused at the earliest point of time in his reply notice at Ex.P-4. It is made clear in the very same reply notice that no transaction, much less, as alleged in the legal notice, had ever taken place between them. The accused could also able to establish that the complainant had no capacity to lend such a huge amount. His statement as PW-1 and his deposition at Ex.D-1 in matrimonial case are at variance, which also raises a doubt in the case of the complainant.
Learned counsel further submitted that even according to PW-1 and admittedly, the cheque was issued as a security, as such, the complainant cannot proceed for the offence under Section 138 of N.I.Act. Learned counsel also stated that, even according to the Income-tax rules, any transaction more than `20,000/- should be through an account payee cheque or through bank, as such, the alleged hand loan of a huge sum cannot be believed.
9. According to the complainant, accused was known to him since fifteen years prior to the alleged loan transaction. Both in his complaint, as well in his evidence as PW-1, he has stated the same. Even though the accused in his reply at Ex.P-4, as well in his evidence as DW-1 has stated that complainant was stranger to him, but, in the cross-examination of PW-1, he has not made any specific suggestion to that effect. On the other hand, he has elicited some more details about their acquaintance wherein PW-1 has stated that though he is unable to say as to from which particular date the accused was acquainted with him, but, he has stated that accused was acquainted with him since fifteen years as he was visiting their college and at that time, the accused was residing in Railway quarters at Davanagere. The said statement of PW-1 has not been denied.
It was also suggested to PW-1 in his cross- examination from the accused side that one T.Chennakeshava, Naveen, Sandeep, Satish and Shadakshari, were good friends of the complainant, however, the complainant/PW-1 has stated that, except Chennakeshava and Naveen, others are persons known to him. Incidentally, the said Sandeep was examined as DW-4 from accused himself. In his evidence also, it was not brought out that complainant and accused were strangers and they were not knowing each other. The said DW-4 has not supported the case of the accused though he was summoned from the accused. He was not even treated as hostile and was cross-examined from the accused side who summoned him to the witness box. This go to show that even though the accused had an opportunity to elicit from DW-4, the friend of the complainant, about the alleged acquaintance of the complainant with the accused, the said effort was not made by the accused.
10. Accused in his support also got examined one Sri H.Malleshi as DW-2. The said witness in his cross- examination has stated that he knows the accused since fifteen years. He has also stated specifically that in the year 2004, the accused had issued four to five blank cheques to the complainant. By stating that, by none else than the witness who was brought and examined by none else than the accused, it is shown that accused was a person known to the complainant. Otherwise, DW-2 would not have said that accused had issued blank cheques to the complainant. Thus, the contention of the accused that the complainant was stranger to him cannot be believed.
11. It is not in dispute that the cheque at Ex.P-1 is drawn by the accused and the said cheque when presented for realisation by the complainant came to be returned with the reason “funds insufficient” as per Banker’s memo at Ex.P-2, in which regard, the complainant issued a legal notice to the accused as per Ex.P-3, calling upon the accused to make good the cheque amount within the stipulated period. Admittedly, to the said notice, the accused has sent a reply as per Ex.P-4 denying the alleged loan transaction and taking a defence that few cheques, including the one in question was given by him (accused) to one Sri Chennakeshava and Naveen, the building contractors, as a blank cheque, duly signed by him, but, due to the dispute between them, they got a false case instituted by the present complainant against the accused. However, by sending a rejoinder as per Ex.P-5, the complainant has denied the said defence even prior to the institution of the complaint against the accused.
12. In the above circumstances, when the issuance of cheque, its dishonour and issuance of notice by the payee of the cheque to the drawer of the instrument, has remained not in dispute, then, the legal presumption under Section 139 of N.I.Act starts operating in favour of the complainant. Our Hon’ble Apex Court in Rangappa –vs- Sri Mohan, reported in {2010 (11) SCC 441}, has also held that, once the issuance of cheque is established, the legal presumption about the existence of legally enforceable debt starts operating in favour of the complainant, however, the said presumption is rebuttable. As such, in the instant case, when the legal presumption has formed in favour of the complainant, what is to be seen is that whether such legal presumption has been successfully rebutted by the respondent/accused. The rebuttal of such legal presumption need not necessarily be proved beyond reasonable doubt. Suffice for the respondent to show that preponderance of probabilities suspects about the existence of legally enforceable debt.
13. According to PW-1, the loan was given to the respondent/accused in the third week of November 2006 at his house out of the money kept by him at his house. The accused in order to overcome the said evidence, has questioned the source of income of the complainant at the relevant point of time. No doubt, the complainant has stated that he was working in Bapuji Dental College at Davanagere since five to ten years and his initial salary at the time of joining was at a sum of `1,000/-. Though in the cross-examination of PW-1, no question was put to the witness about his income at the relevant date i.e., in the year 2006, but, PW-1 by leading his further evidence, has also produced his pay slip and marked it as Ex.P-13, which shows that, as on the date of the said document, the gross salary was `14,175/- and after deductions, he was taking the net pay of `5,636/-. Apart from this, PW-1 has also stated that he has eight houses and from each, he gets rental income also.
In his further evidence, he has produced few documents at Ex.P-12, which are katha certificate and two copies of absolute Sale Deeds, which speaks about he purchasing couple of immovable properties and he being a katha holder of a residential building. Thus, it shows that, apart from his regular salary, he had other source of income also.
14. Learned counsel for the respondent/accused in his argument while drawing the attention of this Court to a copy of the deposition of the present complainant in a matrimonial case instituted by the complainant against his wife and which document was marked at Ex.D-1, submitted that, in the said document, the complainant as PW-1, in his cross-examination, has stated that, joined by his friends, he has lent a sum of `3,25,000/- to the present accused Sri M.C.Ranadeva, who was working in Railway Department. According to the learned counsel for the respondent, the said statement is contrary to his evidence in the cross-examination as PW-1 in the case on hand, where he has stated that he has lent a sum of `3,25,000/- to the accused which amount he had kept in his home.
The said contention of the respondent that these two statements are contradictory to each other cannot be accepted for the reason that, if both statements are read together, the statement of PW-1 made in the cross-
examination in the instant case that amount was kept in the house, would not negate or goes against his statement made in Ex.D-1 that, he, joined by his friends, had lent a sum of `3,25,000/-. Had really been the accused was desirous in showing that this statement is contradictory to his another statement, then, his statement made at Ex.D-1 should have been put in the mouth of PW-1 in the instant case and suggested to the witness that his statement that he got the said fund of `3,25,000/- from his source and through his friends, was a false statement. Such an attempt was not made from the accused side. However, the trial Court without analysing this aspect of the alleged existence of presumption in favour of the complainant and without appreciating the evidence led by PW-1 to show his capacity to lend money, has relying upon the judgment of Krishna Janardhan Bhat –vs- Dattatraya G. Hegde, reported in AIR 2008 SC 1325, expected the complainant to prove beyond reasonable doubt the existence of legally enforceable debt.
The second contention taken up by the learned counsel for the respondent is that, even according to PW-1, the cheque in question was issued to him as a security. No doubt, PW-1 in his cross-examination at one place has stated that the accused had issued the said cheque as a security. No doubt, the said statement is not being denied by either side. By making a suggestion and eliciting an admission on that point, it is to be noticed that accused had admitted the issuance of cheque in favour of the complainant, which he calls it as a security. According to the complainant, the said cheque was issued to him by the accused on the date when the loan was raised by him by mentioning a future date in the instrument. According to PW-1, the accused/borrower had promised to repay the loan amount within five months from the said date. From the alleged period of the transaction to the date of the cheque, which is 11.4.2007, the said five months period stands expired. Therefore, in view of the judgment of Hon’ble Apex Court in Sampely Satyanarayana Rao – vs- Indian Renewable Energy Development Agency Limited reported in (2016) 10 SCC 458, once the loan becomes due, the instrument given as a security ripe for its presentation. As such, the accused cannot take defence that there was no existence of legally enforceable debt and the cheque won’t fall within the purview of Section 138 of N.I.Act.
15. The accused has taken a defence at the earliest point of time in his reply notice at Ex.P-4 that the cheque in question, including few other cheques, were given by him to one Chennakeshava and Naveen, the building contractors, on trust and that those cheques were blank and duly signed by him, however, due to some dispute between them, which ultimately came to be compromised with Chennakeshava, the matter was settled for a sum of `60,000/-. The said Chennakeshava failed to return the cheque in question, but, the same was presented through the complainant and got instituted the present case. In order to rebut the presumption that has been formed in favour of the complainant, it is not just enough for the accused to take such defence, but, he should show to the Court that in all probabilities, the said defence is more nearer to the truth or appears to be reliable. If the same is satisfied, then, the presumption was considered as successfully rebutted by the accused.
16. In order to rebut the said presumption formed in favour of the complainant, the accused got himself examined as DW-1, wherein he reiterated the contention taken up by him in his reply notice. However, in his cross-examination from the complainant side, denial suggestions were made denying all the statements made by DW-1 in his examination-in-chief.
17. The accused also got examined three more witnesses on his side. One Sri H.Malleshi as DW-2 and one Sri Ningappa Kandgal as DW-3, have deposed to the effect that there was loan transaction between the complainant and the accused and that accused had issued few blank cheques in favour of Chennakeshava, who has got the said cheque misused through complainant.
They were cross-examined from the accused side, wherein denial suggestions were made to them.
18. Even after taking the examination-in-chief evidence of these two witnesses i.e., DW-2 and DW-3, on its facial value, then also it can be noticed that both the witnesses in their affidavit evidence have uniformly stated that the accused had given some few blank cheques to Chennakeshava and Naveen, which they got misused. But interestingly, neither of them no where in their evidence have mentioned that the alleged blank cheques said to have been issued to Chennakeshava, also includes the cheque in question with its specific number. Merely because few cheques were said to have been given by the accused to the said Chennakeshava or Naveen does not necessarily include the cheque in question also which has come in the hands of the complainant. Had really DW-2 and DW-3 were aware of the entire transaction of the accused with said Chennakeshava or with the present complainant, they should have necessarily come up with those necessary and basic details, which they have not given.
Secondly, when according to the accused, the complainant was totally a stranger to him, but, as already observed above, DW-2 i.e., the witness of the accused himself has stated in his cross-examination that in the year 2004, accused had issued four to five blank cheques to the complainant. That means, apart from the witness of the accused himself stating that accused and complainant knew each other, as already stated above, there was issuance of cheque from the accused to the complainant. Therefore, the evidence of DW-2 would be of no help to the accused.
Thirdly, DW-3 also in no way improved his version than DW-2. On the other hand, the said witness in his cross-examination has clearly stated that he does not know about the transaction that had taken place between the accused and the complainant said to have taken place in the third week of November 2006. According to the complainant, the loan transaction in question had taken place in the said third week of November 2006. According to DW-3, he has no knowledge of the said transaction. Therefore, when the evidence of DW-2 is not worth believing and DW-3 admits that he does not know the transaction details, then, it is not acceptable as to on what basis that they say that the alleged transaction has not taken place. Therefore, the evidence of DW-2 and DW-3 would be of no benefit to the accused.
19. As already observed above, among DWs.2, 3 and 4, it is only DW-4, who, as admitted by PW-1 in his cross-examination, is his friend. The said witness when brought by the accused as his witness, has not supported the case of the accused. As already observed above, he was not even subjected to cross-examination from the accused side. Therefore, the only friend as suggested to PW-1 in his cross-examination by none else than by the accused, also has not supported the case of the accused.
20. Added to the above, had really the case of the accused being that the cheque in question was issued to the said Chennakeshava or Naveen when the accused was said to have putting up the construction of his house at Davanagere, then, nothing had prevented him from summoning them and examining them. When the accused is expecting from the complainant in addition to the cheque in question, other corroborative documents for proving the alleged loan transaction, nothing had prevented the very same accused to produce any documents or correspondences or statement of accounts maintained by him while constructing his house spending huge amount of money to show that or evidencing that the cheque in question was issued by him to said Chennakeshava and Naveen and not to the complainant. No effort was made by the accused in that regard. In these circumstances, merely because the loan amount being more than `20,000/- and said to have not been made through a bank account or cheque, the entire loan transaction cannot be suspected. As such, the presumption formed in favour of the complainant further crystalises and an attempt made by the accused to rebut the said presumption has not yielded any result for him. However, the trial Court without going through the evidence led before it and materials placed before it in its proper perspective, as already observed above, proceeded on the basis of Judgment in Krishna Janardhan Bhat’s case (supra) and shifted the entire burden of proving the alleged transaction like a money recovery suit upon the complainant and which made it to pronounce the judgment of acquittal. Since the said judgment has now been clarified in Rangappa’s case (supra), it has to be held that the complainant has proved the guilt of the accused under Section 138 of N.I.Act beyond reasonable doubt. Thus, the impugned judgment under appeal deserves to be set aside and appeal deserves to be allowed.
21. Accordingly, I proceed to pass the following order:
ORDER The Appeal stands allowed. The judgment of acquittal dated 15.04.2010, passed by the learned III Additional Senior Civil Judge and JMFC, Davanagere, in C.C.No.527/2009 (old C.C.No.2446/2007), is set aside. The respondent/accused by name – M.C.Ranadeva, S/o Kasiraj, residing at No.28, `A’ Block, D.C.M.Township, Davanagere, is convicted for the offence punishable under Section 138 of N.I.Act.
Heard the learned counsel from both side on sentence part.
While the learned counsel for the appellant/ complainant submits for awarding maximum sentence for the offence for which the respondent/accused is convicted, the learned counsel for the respondent/accused submitting that accused is a family holder and a respectable person in society, prays for taking a lenient view.
It is the sentencing policy that the sentence ordered should not be either exorbitant nor for name sake for the proven guilt. It must be proportionate to the guilt for which the accused is found guilty of.
Considering the facts and circumstances of the case, the accused is sentenced to pay a fine of `3,50,000/- (Rupees Three lakhs fifty thousand only) within four weeks from today, and in case of default of payment of fine, to undergo a simple imprisonment for a period of six months. In case of payment of fine amount, a sum of `3,25,000/- (Rupees Three lakhs twentyfive thousand only) be paid to the complainant – D.Rajkumar, s/o late Duggappa, and remaining sum of `25,000/- (Rupees Twentyfive Thousand only) be taken to the account of the State.
The Registry is directed to transmit a copy of this judgment to the trial Court forthwith, to enable it to proceed further in the matter for issuance of warrant of conviction, if necessary and proceed in accordance with law.
An entire copy of this judgment also be delivered to the respondent/accused, immediately free of cost.
Considering the effort put by the learned counsel for the appellant from the panel of High Court Legal Services Committee, it is recommended to the Committee to consider the remuneration/ honorarium to be paid to the learned counsel at not less than `5,000/-.
Sd/- JUDGE bk/-