IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF FEBRUARY 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY CRIMINAL APPEAL No.1219 OF 2010 BETWEEN:
Gurumallesh S/o Mallaiah, Major, R/at No.924, 3rd Main, 4th Cross, Vijayanagara, Bengaluru – 560 040. .. Appellant ( By Sri M.Shashidhara, Advocate ) AND:
G.Ramesh, Major, R/at No.166, 10th Block, KSRTC Quarters, Shanthinagara, Bengaluru. .. Respondent ( By Sri P.D.Subramanya, Advocate) This Criminal Appeal is filed under Section 378(4) of Cr.P.C praying to set aside the order dated 26.2.2010, passed by the Presiding Officer, FTC-X, Bengaluru City, in Criminal Appeal No.832/2008, and restore the judgment dated 7.12.2007, passed by the XII Addl.CMM, Bengaluru, in C.C.No.2243/2007, convicting 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 XII Addl.Chief Metropolitan Magistrate, Bengaluru City, (hereinafter for brevity referred to as `trial Court’), in C.C.No.2243/2007, pronounced the judgment of conviction, convicting the present respondent/accused on 7.12.2007. Against the same, the present respondent, as an accused, preferred Criminal Appeal No.832/2008, before the learned Addl.Sessions Judge, FTC-X, Bengaluru, (hereinafter for brevity referred to as `lower Appellate Court’), which by its impugned judgment dated 26.02.2010, allowed the appeal and set aside the judgment of conviction passed by the trial Court. It is challenging the judgment of acquittal passed by the lower Appellate Court, the appellant/complainant has preferred this appeal.
2. The summary of the case of the complainant in the trial Court is that the accused had borrowed a sum of `1,50,000/-, on 10.5.2005 as loan. Towards the dischargal of the said liability, the accused had also issued a cheque bearing No.288736, dated 28.4.2006, drawn on National Co-operative Bank Ltd., Bull Temple Road, Bengaluru, in favour of the complainant. When the said cheque was presented for realisation, the same came to be dishonoured with a banker’s shara “funds insufficient”. Thereafter, the complainant got issued a legal notice to the accused demanding the payment of the cheque. Despite the receipt of the notice, the accused neither paid the cheque amount nor replied to the notice, which constrained the complainant to initiate a criminal case against him for the offence punishable under Section 138 of N.I.Act.
3. In order to prove his case, the complainant got himself examined as PW-1 and got marked the documents from Exs.P-1 to P-8. The accused got himself examined as DW-1 and got marked the documents from Ex.D-1 to D-7. After hearing both side, the trial Court by its impugned judgment dated 7.12.2007, convicted the accused for the alleged offence.
4. Being aggrieved by the judgment of conviction passed by the trial Court, the accused preferred an appeal before the lower Appellate Court in Criminal Appeal No.832/2008. The said Court after hearing both side, by its judgment dated 6.2.2010, allowed the appeal and set aside the judgment of conviction passed by the trial Court and acquitted the accused of the alleged offence. It is against the said judgment of lower Appellate Court, the appellant/complainant has preferred this appeal.
5. Inspite of granting sufficient opportunity, since the learned counsel for the respondent neither appeared in the matter nor addressed his arguments, this Court by the order dated 14.2.2019, appointed learned counsel Sri P.D.Subramana, a panel advocate from the Legal Services Committee of this Court as a counsel to appear and represent the respondent in the matter.
6. The lower Court records were called and the same are placed before this Court.
7. Heard the arguments from both side and perused the materials placed before this Court.
8. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.
9. The learned Counsel for the appellant/ complainant in his argument submitted that the accused has taken an inconsistent stand about the cheque at Ex.P-1, as such, his contention as to how the said cheque is said to have been slipped from his possession cannot be believed. On the other hand, it has to be considered that there is issuance of cheque by the accused in favour of the complainant. Once the said issuance of cheque is established, a presumption under Section 139 of N.I.Act operates in favour of the complainant, which the accused has failed to rebut it. The learned counsel further submitted that the source for the loan is also explained by the complainant as the amount which he had received as his service retirement benefits. He also submitted that the contention of the accused that signature in the cheque does not belong to him is not acceptable since the banker has not dishonoured the said cheque for the reason of alleged difference in signature.
10. Learned panel advocate for the respondent in his argument submitted that the presumption under Section 139 of N.I.Act would be available, provided it is established that there was issuance of cheque from the accused to the complainant. In the case on hand, there is no issuance of cheque at all, as such, no presumption would operate in favour of the complainant. He also submitted that details as to when, where and under what circumstances the alleged loan is given is not explained and established by the complainant. The signature on the cheque when has been specifically denied and disputed irrespective of the fact whether the drawee banker has returned the cheque for the said reason or not, still the burden would be upon the complainant to prove the signature of the drawer of the instrument, which he has not done in the instant case.
Finally stating that the complainant has utterly failed to prove that he had source or capacity to lend such a huge amount as loan, the learned counsel for the respondent submitted that the judgment of the lower Appellate Court does not warrant any interference at the hands of this Court.
11. The complainant has stated that accused was a known person to him since several years prior to the alleged loan transaction and as such, in the month of May 2005, at his request, he lent a loan of `1,50,000/- to him. According to PW-1 – the complainant, towards dischargal of the said loan amount, the complainant had issued the cheque in question, which came to be dishonoured subsequently.
12. The defence of the accused as suggested to PW-1 in his cross-examination and in his evidence as DW-1 is of multifold. At the first instance, the accused has taken a defence that the cheque in question has never been issued by him to the complainant, who was stranger to him, but, the said cheque was issued to one Devaraju, a co-brother of the complainant at the time when he borrowed loan from him. However, despite repayment of the loan amount, the said cheque was not returned by said Devaraju. Since said Devaraju died, at that time, the accused could not collect the cheque from the family members of Devaraju. Taking undue advantage of the same, the wife of Devaraju, joined with her sister, who is the wife of the complainant herein and the complainant, have filed a false complaint in the name of the complainant after misusing the said cheque. However, the said suggestion made to PW-1 on these lines have not been admitted as true by him. Similarly, the statement made by the accused as DW-1 on line of this defence was also denied as false by making a suggestion to DW-1 in his cross-examination.
13. Another defence taken up by the accused was that the complainant was a stranger to him. In that regard, a suggestion was made to PW-1 in his cross- examination, as well stated by DW-1 in his examination- in-chief, however, the complainant has not admitted the said suggestion as true.
14. The accused also has taken a defence with respect to the cheque in question that he had lost that cheque and had lodged a complaint in that regard. Apart from alleged loss of cheque, the accused also has taken a contention in his examination-in-chief as DW-1 that the said cheque was misplaced by him and was kept in the house drawer along with other cheque books, however, while shifting his house from one place to another place, all those cheque books were found lost. In that regard, he had lodged a police complaint and also issued letters to his various bankers through registered post. In that regard, he had got produced the postal receipts and marked them as Exs.D-1 to D-4. He has also produced a photocopy of his alleged intimation said to have been given to the drawee banker in the instant case about the alleged loss of the cheque books, which he has produced at Ex.D-6. Stating that he has also lodged a complaint with the police in that regard, he has also produced a photocopy of his alleged complaint with the police and got it marked as Ex.D-7. Thus, according to the accused, the cheque in question had never been issued to the complainant.
15. In addition to the above, the accused has also taken a stand that the signature found on the cheque as the signature of the drawer is not his signature. In that regard, a suggestion was made to PW-1 in his cross- examination, however, PW-1 has not admitted the said suggestion as true. Apart from the same, the accused as DW-1, has also in his evidence stated that signature in Ex.P-1 is not his signature.
16. Section 139 of N.I.Act speaks about presumption in favour of holder of negotiable instrument. It says that, unless contrary is proved, it shall be presumed that the holder of a cheque receives the cheque of the nature referred to under Section 138 of N.I.Act for the discharge in whole or in part of any debt or other liability. The Hon’ble Apex Court in Rangappa –vs- Sri Mohan, reported in {2010 (11) SCC 441}, while analysing Section 139 of N.I.Act, was also pleased to observe that once the issuance of the cheque in favour of the complainant is established, a presumption about the existence of legally enforceable debt forms in favour of the complainant, however, the said presumption is rebuttable.
17. In the instant case, as already observed above, when the complainant has stated that the cheque in question was issued to him, the accused has taken a different stand and denied that the cheque in question has never been issued by him to the complainant. To show that the said cheque in question was not issued to the complainant, but, to one Devaraju, who was said to be the co-brother of the complainant when he is said to have availed a loan from him, the accused has not produced any material or any document in that regard. Had really the accused issued the said cheque not to the complainant, but, to the said Devaraju, then, nothing had prevented him from producing any document with regard to his alleged chit transaction with said Devaraju. It is also not the specific case of the accused that there were no documents with respect to his alleged chit transaction with Devaraju as a security. Had there really been any transaction between Devaraju and the accused, nothing had prevented the accused from producing any documents pertaining to their business relationship in a chit transaction. Admittedly, no documents on those lines have been produced by the accused.
The second defence taken up by the accused is about theft of the cheques, which defence is not in consonance with other defence. Except suggesting to PW-1 that there was theft of cheques, the accused has not mentioned when, where and in what manner the said theft had taken place and when he came to know about the alleged theft. Though he says that in that regard he has lodged a complaint with the Wilson Garden Police Station, Bengaluru, but, a perusal of Ex.D-7 does not say that there was any theft of the cheques, but, it only show that while shifting of the house, the cheque book was found to be lost. The said complaint does not even say the cheque numbers which the alleged cheque book was containing.
The third defence taken by the accused is about the alleged misplacement of the cheque books at the time of shifting of the house. Though the accused had contended that he had kept cheque books of several banks in the drawer and while shifting the house, all those cheque books were lost, in that regard, he had issued letters to various bankers, but, he has not produced copies of those letters issued to the banks duly acknowledging the receipt of the same by the banks. Merely by the production of postal receipts at Exs.D-1 to D-4, it cannot be inferred that they are with respect to the alleged misplace or loss of the cheque books, including the cheque in question. Even the alleged letter to the banker at Ex.D-6 also does not mention that the cheque in question which is at Ex.P-1 was lost by him in any manner. Therefore, the multifold defence taken up by the accused that the cheque was not issued by him to the complainant since has failed short of proof, the contention of the accused that the cheque was not issued by him to the complainant cannot be taken as proved.
18. According to the accused, the signature on Ex.P-1 is not his signature. A suggestion to that effect has been made from the accused side to the complainant in his cross-examination as PW-1. Though the said suggestion was not admitted as true by PW-1, but, by that itself, it cannot be taken that the signature in Ex.P-1 has stood proved as that of the accused. It is because, the same stand has also been taken by DW-1 in his evidence also. Merely because the drawee banker in his endorsement for dishonour of the cheque at Ex.P-2 has not mentioned about the differences in the cheque, by that itself it cannot be stated that the signature at Ex.P-1 was that of accused alone. Some effort in that regard about proving the signature of the accused on Ex.P-1 could have been made by the complainant, which he has not done.
19. Assuming for the time being that the cheque in question has been issued by the accused to the complainant, as such, the presumption under section 139 of N.I.Act about the existence of legally enforceable debt forms and operates in favour of the complainant, still, it cannot be forgotten that the said presumption is a rebuttable one. According to the accused, he has rebutted the said presumption, which the complainant has seriously denied and disputed.
20. According to the accused, the complainant had no source or capacity to lend the cheque amount of `1,50,000/-. That being the case, the complainant having no capacity to pay the amount and under no circumstances could have lent such a huge amount to him.
Per contra, learned counsel for the appellant drew the attention of the Court to a statement made in the cross-examination of PW-1 which says that PW-1/complainant had received the retirement benefits of `10 lakhs at the time of his retirement and submitted that the said statement shows that the complainant had capacity to lend the money.
21. As admitted by and as come out in the cross-examination, PW-1/complainant took voluntary retirement from his service under Hindustan Machine Tools (HMT) factory in the year 2001 and after his retirement, he is at home without pursuing any job or occupation, which means, the retirement benefits what he received is in the year 2001 and the alleged loan transaction is in the year 2005 and the retirement benefits received by him is `10 lakhs, which was the only amount he had with him from the year 2001 onwards. The same witness has also stated in his cross-examination that while working in Hindustan Machine Tools, his gross salary was `13,000/- and net salary was `10,000/- per month, which salary was just managable for his domestic expenses and he was unable to make any savings. He has also stated that, except his job in HMT factory, he had no other source of income. Accordingly, it is clear that, except his salary out of his services, the complainant had no source of income and that even from out of his salary, he could not save any amount. The only amount he received was his retirement benefits.
22. On the contrary, the very same witness has also stated that accused was borrowing a loan from him now and then and was returning to it. It becomes unbelievable as to when a salary of `10,000/- was just meeting the requirement of family maintenance of the complainant and he could not able to save any amount, how come he was able to lend money to accused now and then. Further, even if it is taken that he had received a sum of `10 lakhs in the year 2001, nothing is placed on record to show that he had saved a sum of `1,50,000/- out of the said amount and had kept that amount in cash with him for more than four years and the same amount has been utilised by him in lending to the accused. Normally, a retired person who has no savings from out of his salary and expected to maintain his family only out of the retirement benefits received by him, is not expected to retain huge amount of lakhs of rupees in cash form in his house for several years. Assuming for a moment that some amount was retained by him in his house, still a person having no source of income lending the same to another person a huge amount without any documentation and sacrificing the requirement of his family, is also highly unbelievable.
23. Therefore, though the presumption of the alleged existence of legally enforceable debt could have been formed in favour of the complainant, by the above analysis, it has to be held that the said presumption has been successfully rebutted by the accused in the form of cross-examination of PW-1, as well leading his evidence as DW-1. Once such a presumption stands rebutted, the burden would be upon the complainant to prove the existence of legally enforceable debt.
24. Admittedly, except the cheque at Ex.P-1, the complainant has got no other documents to prove the alleged loan transaction which was said to have been in existence between himself and the accused. Therefore, in the absence of any other cogent evidence, either oral or documentary, merely based upon the cheque at Ex.P-1, it cannot be concluded that after the rebuttal of presumption, the complainant has been able to establish the existence of legally enforceable debt.
When once the accused could able to show that there was no legally enforceable debt and simultaneously once the complainant has failed to prove the existence of legally enforceable debt, the alleged act would not attract Section 138 of N.I.Act, as it won’t constitute as an offence. However, the trial Court without analysing these aspects in detail, merely because Ex.P-1 was marked and represented as a cheque issued by the accused in favour of the complainant, proceeded on the assumption that there existed a legally enforceable debt and without appreciating the rebuttal evidence, has erroneously ended in pronouncing the judgment of conviction. However, the said judgment though was set aside by the lower Appellate Court, but, the same was for different reason. Those reasons given by the lower Appellate Court for setting aside the judgment of the trial Court may not on the same lines as what has been observed in the present appeal by this Court.
However, the finding arrived at by the lower Appellate Court for setting aside the judgment of conviction and acquittal of the accused for the offence punishable under Section 138 of N.I.Act, cannot be found fault with.
25. Accordingly, I proceed to pass the following order:
ORDER The Appeal stands dismissed as devoid of merits. The judgment of acquittal passed by the learned Addl.Sessions Judge, FTC-X, Bengaluru, in Criminal Appeal No.832/2008, dated 26.02.2010, is confirmed.
The Registry is directed to transmit a copy of this judgment along with lower Court records to the lower Appellate Court immediately.
Considering the effort put by the learned counsel for the respondent from the panel of High Court Legal Services Committee, it is recommended to the Committee to consider the remuneration/ honorarium payable to the learned counsel at not less than `5,000/.
Sd/- JUDGE bk/