IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR.JUSTICE B.A. PATIL CRIMINAL REVISION PETITION NO.651/2019 BETWEEN:
1. M/s. Klean Well Hygiene Pro A Propriety Concern Office at No.1038, 12th Main, HAL II Stage, Indiranagar, Bengaluru-38 Represented by its Proprietrix Mrs.Yamuna Ramesh.
2. M/s. Klean Well Hygiene Pro A Propriety Concern Office at No.B-19, KIADB Industrial Area Doddaballapur Bengaluru-561 203 Represented by its Proprietrix Mrs. Yamuna Ramesh 3. Yamuna Ramesh W/o Ramesh At No.2372 16th Main HAL II Stage, Indiaranagar, Bengaluru-560 038.
(By Sri P.B. Ajit, Advocate) ...Petitioners AND:
Vishwa Kutumb Private Limited A Company having its Registered office at No.132, Palace Road Cross, Bengaluru-20, Represented by its Authorized Signatory & Manager Sri K. Narasimha Shenoy S/o late Krishnaiah Shenoy Aged about 54 years At No.132, Palace Road Cross, Bengaluru-20.
(By Sri B.S.Sathyanand, Advocate) ...Respondent This Criminal Revision Petition is filed under Section 397 r/w 401 of Cr.P.C praying to set aside the judgment dated 08.04.2019 in Criminal Appeal No.882/2018 on the file of the LIX Additional City Civil and Sessions Judge, at Bengaluru and the judgment dated 17.04.2018 in C.C.No.26780/2011 on the file of the VIII Additional Small Causes Judge and XXXIII ACMM at Bengaluru.
This Criminal Revision Petition coming on for Orders this day, the Court made the following:
O R D E R This petition has been filed by the petitioners/accused Nos.1 to 3 challenging the judgment passed by the Court of the LIX Additional City Civil and Sessions Judge, Bangalore City (CCH-60) in Crl.A. No.882/2018 dated 08.04.2019 where under, the judgment of conviction and order of sentence passed by the Court of the XXXIII Additional Chief Metropolitan Magistrate, Bengaluru City (SCCH-5) in C.C. No.26780/2011 dated 17.04.2018 was confirmed.
2. I have heard the learned counsel for the petitioners/accused Nos.1 to 3 and the learned counsel for the respondent.
3. The factual matrix of the case as per the case of the complainant before the Court below is that the complainant is a dealer of Kraft Paper and other allied products and accused persons are its customers. They had purchased goods from the complainant on credit basis and carried on the business in the name and style of M/s. Klean Well Hygiene Pro and they have agreed to make payment within 15 days from the date of the respective invoices, failing which, they are liable to pay 30% interest per annum. The total amount due as on 27.01.2011 was Rs.10,09,482/- inclusive of the principle amount and interest. In order to discharge the said outstanding debt, four cheques have been issued by the accused dated 27.01.2011 and they also requested to make the remaining balance of Rs.59,482/- after the clearance of the chques. Further it is the case of the complainant that based on the assurance of the accused, he presented the cheques through his banker and all the cheques were dishonored with an endorsement “account closed” on 29.01.2011 and this fact was brought to the notice of the accused by causing a notice dated 11.02.2011. After service of notice, accused did not make the payment nor given any reply. When accused failed to make payment, a complaint was registered against the accused.
4. Learned Magistrate took cognizance. After recording the sworn statement of the complainant, secured the presence of the accused and thereafter, the plea of the accused was recorded. Accused pleaded not guilty. He claimed to be tried and as such, the case was fixed for trial.
5. In order to prove the case of the prosecution, it has got examined one witness as PW.1 and got marked 30 documents. Accused No.3 herself got examined as DW.1 and got marked 14 documents. After hearing the learned counsel appearing for the parties, the Court below convicted the accused. Being aggrieved by the same, an appeal was preferred. The appellate Court dismissed the appeal by confirming the order of the trial Court.
6. It is the submission of the learned counsel for the petitioners/accused Nos.1 to 3 that both the Courts below have erred in not appreciating the facts and law in its right perspective. It is his further submission that though the presumption has been rebutted as contemplated under law on preponderance of probabilities, the trial Court without properly appreciating the factual matrix has wrongly convicted the accused. It is his further submission that the complainant has not produced the full invoice so as to come to a conclusion that he has supplied the goods and the amount has not been paid. It is further submitted that the payments, which have been made have not been accounted for to the same amount, but which have been paid, have not been shown in the ledgers and not adjusted to the loan amount but have adjusted to other accounts. It is further submitted that the said cheques, which have been given to the complainant as a security, after payment of the entire due amount, the same have been misused and the present complaint has been filed. It is further submitted that heavy burden lies on the complainant to establish by producing cogent and acceptable evidence that there exist legally recoverable debt. Without considering the said aspect, the trial Court has come to a wrong conclusion and has wrongly convicted the accused. On these grounds he prays to allow the petition and set aside the judgment of conviction.
7. Per contra, learned counsel for the respondent/complainant vehemently argued and submitted that immediately after issuance of the invoice, the goods has been supplied and there was a balance amount of Rs.10,09,482/-. It is his further submission that the said cheques, which have been issued are in respect of payment of the amount due. If really, he has paid the amount, then under such circumstance, he could have given reply to the notice given to him. Further it is submitted that if accused failed to reply to the statutory notice then, it leads to the inference that there was merit in the version of the complainant. In order to substantiate his contention, he has relied upon the decision of the Hon’ble Apex Court in the case of Rangappa Vs. Sri.Mohan reported in (2010) 11 SCC 441. It is his further submission that the documents, which have been produced, have not been disputed by the accused and he has also admitted the signatures on the cheques. When once the signature has been admitted, then under such circumstance, the Court has to draw a presumption that their exists legally enforceable debt or liability and then the burden shifts upon the accused to rebut the presumption on preponderance of probabilities. It is further submitted that there were two accounts were maintained. One is in the name of the firm and another one is in the name of individual. In that light the payments, which have been made and the other things have been accepted by giving E-mail reply, the same documents have been produced. After considering the said documents, the trial Court as well as the First Appellate Court have come to a right conclusion and have rightly convicted the accused. It is his further submission that the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability. If the same has not been established, then the case of the complainant stands proved. In order to substantiate his contention, he relied upon the decision of the Hon’ble Apex Court in the case of Uttam Ram Vs. Devinder Singh Hudan reported in AIRONLINE 2019 SC 1285. It is further submitted that the petitioners/accused persons have not made out any good grounds so as to interfere with the judgment of the trial Court. The judgment of the trial Court deserves to be confirmed. On these grounds, he prayed to dismiss the petition.
8. I have carefully and cautiously gone through the submissions made by the learned counsel appearing for the parties and perused the parties.
9. As could be seen from the records, in order to prove the case of the complainant, he got examined himself as PW.1 and in his evidence, he has reiterated what has been stated in the complaint. It is the specific case of the accused that the business transaction was in existence and payments have been made. But the same has not been accounted and no invoice has been produced. The amount paid was not deducted and the cheques, which have been given as a security, have been misused by the complainant. In order to substantiate the case of the accused, accused No.3 got examined herself as DW.1. In her examination-in-chief itself, she has admitted that she issued three blank cheques signed by her in favour of the complainant towards security but the contents were not filled by her and started the business in the 2009.
10. It is well settled proposition of law that when once the cheque is signed either wholly blank or half filled and if it is given to the holder, then as per Section 20 of the Negotiable Instruments Act, 1881 (hereinafter referred as “the Act”) it empowers the holder of the cheque can fill in to complete the negotiable instrument. In that light, three blank cheques have been issued by signing and the same have not been filled up but it is not going to enure the benefits to sthe accused.
11. It is further admitted fact that she has issued the cheque and it bears her signature. When once the accused admits the signature on the cheque under such circumstance, the presumption mandated under Section 139 of the Act has to be drawn. It includes a presumption that there exists a legally enforceable debt or liability. However, I am conscious of the fact that the said presumption is a rebuttable presumption. It is open to the accused to raise a defense wherein, the existence of legally enforceable debt or liability can be contested. This proposition of law has been laid down in the case of Rangappa (quoted supra) at paragraph No.26, it has been observed as under:
“26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat[(2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.”
12. Keeping in view the above said facts and ratio, it is the specific contention of the accused that the payments have been made and the said amount, which has been paid has not been accounted for. When the payment has been made, under such circumstance, the accused has to produce relevant document for having paid the said amount. In this behalf, they have relied upon Exs.D1 to D14.
13. On perusal of the said records, they will not substantiate the fact of full payment of the amount, which is said to be due to the complainant. If really, the amount, which is due to be paid to the complainant as contended, under such circumstance, it is a proprietary concern and it might have maintained the account. The accounts could have been maintained in the said firm for having paid the amount, such amounts have been suppressed for the reasons best known to the accused. When notice has been issued to the accused for demanding the cheque amount, under such circumstance, the reply could have been given by contending the defense. Now it has been taken up in the case for the reasons best known to the accused, no such reply has been given. If accused failed to reply to the statutory notice, it leads to an inference that there was merit in the case of the version of the complainant. This proposition of law has also been laid down in the case of Rangappa quoted supra wherein at paragraph Nos.29 and 30, it has been observed as under:
“29. Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the “stop payment” instructions to his Bank. Furthermore, the instructions to “stop payment” had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability.
30. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, insofar as it was not clear whether the accused had asked for a hand loan to meet the construction- related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant.”
14. Be that as it may. Even Exs.P26 to P30 are the E-mail sent by the complainant to accused No.3, in the said E-mails, it has been specifically mentioned that all payments released will be accounted against trading purchasers in the name and style of M/s. Klean Well Hygiene Pro and once the principle and interest is received, they will close the account and maintain only the new account.
15. It is the specific contention of the accused that the amount paid has not been taken into account and it has been adjusted to the accounts of another company. If it is the case of the accused that the said amount has been adjusted with other accounts, then the burden lies upon the accused to establish the fact that he was not having any other transaction other than the trading transaction with the complainant and the amount paid has been paid towards the trading transaction, which was existed with the complainant company. In the absence of such material, it clearly goes to show the existence of the transaction between the complainant and the accused and the amount paid is only in respect of the loan transaction and full amount has not been paid in this behalf.
16. Even to the said E-mails, no reply has been given as and when the E-mails have been sent. They have shown the total amount of the goods supplied and the payments made in this behalf. If really, the accounts have not been adjusted and the amount has been adjusted to a different account, then nothing was prevented the accused to issue notice calling upon the same to adjust the amount to the loan account. In that light also, there is no proper explanation by the petitioners/accused.
17. I am conscious of the fact that the presumption has to be drawn and the same has to be rebutted by the accused on preponderance of probabilities and the strict proof of the same is not necessary but the case of the accused has to be viewed from the point of the circumstances on which the transactions have taken place and if all the transactions together if they are taken in its right prospective, the accused has not given any reply to the notice when demand has been made. When he has contended that the payments have been made and it is not accounted for and it has been accounted for the accounts of another and that the said cheques have been issued as a security, then under such circumstance, all these facts together, it must show that the contention taken up by the accused is clear and established. Mere denial or rebuttal by the accused was not enough. Section 139 of the Act introduces an exception to the general rule as to the burden of proof and onus sift on the accused to prove by cogent and acceptable evidence that there was no debt or liability and the same has to be proved, the same has been paid. In her evidence, she has not made out a specific case as to what was the amount due and what was the amount paid and how the amount was taken. In that light also, there is no proper explanation. This proposition of law has been laid by the Hon’ble Apex Court in the case of Bir Singh v. Mukesh Kumar reported in (2019) 4 SCC 197, wherein at paragraphs 18, 20 and 24, it read as under:
18. In passing the impugned judgment and order dated 21-11-2017 [Mukesh Kumar v. Bir Singh, 2017 SCC OnLine P&H 5352] , the High Court misconstrued Section 139 of the Negotiable Instruments Act, which mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Needless to mention that the presumption contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque.
19. xxxxxxx 20. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the prosecution to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact as held in Hiten P. Dalal [Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 :
2001 SCC (Cri) 960] .
21. xxxxxx xxxxxx xxxxxx 22. xxxxxx xxxxxx xxxxxx 23. xxxxxx xxxxxx xxxxxx 24. In K.N. Beena v. Muniyappan [K.N. Beena v. Muniyappan, (2001) 8 SCC 458 : 2002 SCC (Cri) 14] , this Court held that in view of the provisions of Section 139 of the Negotiable Instruments Act read with Section 118 thereof, the Court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was rebuttable and could be rebutted by the accused by proving the contrary. But mere denial or rebuttal by the accused was not enough. The accused had to prove by cogent evidence that there was no debt or liability. This Court clearly held that the High Court had erroneously set aside the conviction, by proceeding on the basis that denials/averments in the reply of the accused were sufficient to shift the burden of proof on the complainant to prove that the cheque had been issued for discharge of a debt or a liability. This was an entirely erroneous approach. The accused had to prove in the trial by leading cogent evidence that there was no debt or liability.”
18. Taking into consideration of the ratio laid down in the above decisions and on ascertaining the factual matrix of the case, the accused has failed to prove the fact that the amount has been paid and the same has not been adjusted to the account and the said cheques have been issued for the purpose of security not in discharge of debt or liability. In that light, the trial Court as well as the First Appellate Court after considering all the factual matrix have come to a right conclusion and have rightly convicted the accused. The petitioners/accused Nos.1 to 3 have not made out any good grounds so as to interfere with the judgments of the trial Court as well as the First Appellate Court.
The revision petition is being devoid of merits, the same is liable to be dismissed and accordingly, it is dismissed.
I.A. No.3/2019 does not survive for consideration.
Accordingly, the same is disposed off.
Sd/- JUDGE VBS