IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF FEBRUARY 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY CRIMINAL APPEAL No.952 OF 2007 BETWEEN:
Mr.Ramachandra Rai S/o. Shivanna Rai, Aged about 54 years, The Proprietor, Gayathri Stores, Ganesh Mahal Complex, K.S.Rao Road, Mangaluru-575 001. …Appellant (By Sri. K.Ranjan Kumar, Advocate) AND:
Sri. G.Chandrashekara Salian, Prop: Shivashakthi Engineering, Vas Building, Balmatta Road, Mangaluru-1. …Respondent (By Sri. Y.Rajendra Prasad Shetty, Advocate) This Criminal Appeal is filed under Section 374(2) of Cr.P.C praying to set aside the judgment in CC No.1270/2006 dated:18.04.2007 on the file of the V JMFC, Mangaluru D.K. acquitting the accused of the offence 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 V J.M.F.C., Mangaluru, Dakshina Kannada, (hereinafter for brevity referred to as `trial Court’), in C.C.No.1270/2006, pronounced the judgment of acquittal on 18.04.2006. 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 a known person to him and that in the month of April 2003, the accused approached him with a request for a hand loan of a sum of `50,000/- to meet his emergent financial needs. Accordingly, he lent a loan of `50,000/- to the accused, which the accused had agreed to repay within six months with interest as agreed. However, he did not repay the said loan and prolonged the repayment on one or the other false reasons. Thereafter, again on 6.5.2005, the accused approached him and demanded another hand loan of a sum of `30,000/- to meet his urgent financial needs and to get the clearance of a release of housing loan which he was said to have applied with his banker. As such, considering the demand, he (complainant) lent him once again a loan of a sum of `30,000/-. The accused had promised to repay the said loan immediately after receiving the housing loan amount from the bank. Thus, in total, the accused had taken hand loan of a sum of `80,000/-.
It is the further case of the complainant that since the accused did not repay both the loans, it had constrained him to issue a legal notice on 12.1.2006, calling upon him to pay the entire amount of `80,000/-. The said notice was duly served to the accused, who for complying the demand made by the complainant, issued two blank cheques bearing No.502866 and No.706444, both dated 17.1.2006, for `50,000/- and `30,000/- respectively and one of the cheque was drawn on Canara Bank, Collectors Gate Branch, Mangaluru and another on Karnataka Bank, Balmatta Road Branch, Mangaluru, respectively. When both the cheques were presented for realisation, they were returned dishonoured with endorsements “exceeds arrangements/ insufficient funds”. Thereafter, he (complainant) issued legal notice to the accused on 25.1.2006, demanding the payment of the cheque amount, for which, the accused sent an untenable reply, but, did not comply the demand. This constrained the complainant to institute a 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 documents from Exs.P-1 to P-13. The accused got himself examined as DW-1 and got marked one document as Ex.D-1. After hearing both side, the trial Court by its impugned judgment dated 18.4.2006, acquitted the accused of the alleged offence.
4. Challenging the said judgment of acquittal passed by the trial Court, the complainant has preferred this appeal before this Court. This appeal was earlier disposed of by this Court on its merits by its judgment dated 4.9.2008, wherein it had allowed the appeal and convicted the accused for the offence punishable under Section 138 of N.I.Act and sentenced him accordingly.
5. Challenging the judgment passed by this Court in this matter on 4.9.2008, the accused preferred a Criminal Appeal No.1425/2009, before the Hon’ble Supreme Court of India, which Court by its order dated 13.9.2018, was pleased to set aside the judgment passed by this Court on 4.9.2008 and remanded the matter for passing a reasoned order in accordance with law. As such, the matter is again continued on the file.
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, including the impugned judgment and lower Court records.
8. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.
9. In the trial Court, the complainant got himself examined as PW-1. In his examination-in-chief in the form of affidavit evidence, he has reiterated the contents of his complaint by stating that the accused had availed two hand loans from him, one in the year 2003 and another in the year 2005, however, he failed to repay the same. As such, upon a notice dated 12.1.2006, issued by him which is at Ex.P-9, the accused issued him two cheques, one for `50,000/- and another for `30,000/-, which are at Exs.P-1 and P-2 respectively, which cheques also came to be dishonoured for “insufficiency of funds/exceeds arrangements” when presented for realisation as could be seen vide bank memos marked at Exs.P-3 to P-6.
PW-1 has also stated that after return of the cheques at Exs.P-1 and P-2, he got issued a legal notice to the accused on 25.1.2006 as per Ex.P-7, which was served upon the accused, who, instead of meeting the demand made in the notice, sent an untenable reply as per Ex.P-11, which constrained him to institute the case.
The witness was subjected to a detailed cross- examination from the accused side wherein he adhered to his original version.
10. The accused led his evidence as DW-1 wherein he admitted the alleged loan transaction between the complainant and himself for a sum of `50,000/- in April 2003 and for another sum of `30,000/- in May 2005. However, it is the specific contention of DW-1 (accused) that at the time of availing the loan of `50,000/- in April 2003, the complainant had collected from him four blank cheques, two cheques pertaining to Karnataka Bank, Balamatta Branch and two cheques pertaining to Canara Bank, Collectors Gate Branch, and all the cheques were duly signed by him (accused). Similarly, while giving another loan of `30,000/- in May 2005 also, the complainant had collected four blank cheques duly signed by the accused, two cheques pertaining to Karnataka Bank, Balamatta Branch and two other cheques pertaining to Canara Bank, Collectors Gate Branch. It is the further evidence of DW-1 that he has cleared both the loans completely and had requested for return of 4 + 4 i.e., in total 8 cheques given to the complainant as a security.
However, the complainant stating that those cheques were misplaced by him, did not return those cheques, on the other hand, he has misused the two cheques out of those eight cheques by filling them by himself and presenting them to the bank for realisation, which cheques are at Exs.P-1 and P-2. DW-1 has also stated that he had sent his reply dated 14.2.2006 to notice dated 12.1.2006 sent by the complainant, which the witness got marked as Ex.D-1.
DW-1 also was subjected to a detailed cross- examination from the complainant side wherein the witness adhered to his original version.
11. From a perusal of the evidence led from both side, it is clear that the accused has admitted that he was a known person to the complainant and had financial transactions with him. The accused has also admitted that in April 2003 and May 2005, he had availed a hand loan of a sum of `50,000/- and `30,000/- respectively from the complainant. Further the accused also has not denied that the cheques at Exs.P-1 and P-2 are the cheques issued by him and bears his signature.
12. It is in the light of the above undisputed fact, it is the argument of the learned counsel for the appellant that when issuance of the cheques and the availment of loan by the accused is not in dispute, harping that there was misquoting of date of issuance of cheque at Exs.P-1 and P-2 which was inadvertently made by the complainant ought not to have been considered as a ground for acquitting the accused of the alleged offence by the trial Court. He also submitted that doubting the case of the complainant by the trial Court that when the previous loan was still outstanding, why did the complainant gave second loan to the accused also leads to a doubt in the case of the accused, who has stated that, when his alleged four cheques were said to be pending with the complainant unreturned to him, still, why did the accused gave four more cheques while availing the second loan. With this, learned counsel for the complainant submits that the finding of the trial Court is thus erroneous.
He further submitted that the trial Court also did not consider the fact that the accused had not given any stop payment instruction to his banker despite he claiming to have cleared the loan long back.
13. Learned counsel for the respondent/accused in his arguments submitted that even though the cheques at Exs.P-1 and P-2 are given by the accused himself, but, he has made it very clear both in the cross-examination of PW-1, as well in his evidence as DW-1 that they were given only as a security while availing the previous loan in the year 2003-2005. Learned counsel further submitted that, had really the cheques in question were issued towards the clearance of the alleged existing loan, then, the complainant ought to have clearly and specifically stated the date of issuance of the cheques. However, the complainant has given three different dates in that regard which also leads to suspicion. Stating that the alleged demand and reply to Ex.P-9 by the accused in the form of Ex.D-1 would not by itself lead to any presumption that any plan was hatched in the meantime, learned counsel submitted that the judgment under appeal does not warrant any interference at the hands of this Court.
14. The accused has admitted the contention of the complainant that he had availed a hand loan of sum of `50,000/- in April 2003 and another sum of `30,000/- in May 2005 from the complainant. However, it is his specific contention that at the time of availing these two loans, at the demand of the complainant, he had issued 4 + 4, in total 8 blank cheques duly signed by him as a security. Even though he has cleared both the loans long back, the complainant has misused those two cheques and filled the contents by himself at his advantage and has presented the same to the bank. In that regard, the accused has also stated that he had issued a reply as per Ex.D-1 calling upon the complainant to return the cheques to him without misusing them.
15. Admittedly, the complainant has not maintained any documents or records in order to prove the alleged loan transaction or its alleged repayment, except what according to him is the two cheques in the form of repayment of the alleged loan which are at Exs.P-1 and P-2. According to the complainant, since the accused did not repay the total loan amount of `80,000/- till January 2006, he caused a notice to him on 12.1.2006, both under Registered Post Acknowledgement Due and under Certificate of Posting, calling upon the accused to repay the loan amount immediately. It is in response to the said notice, the accused in the form of repayment of the loan had issued two cheques to him at Exs.P-1 and P-2.
16. Both Exs.P-1 and P-2 which are the cheques for `50,000/- and `30,000/- respectively are dated 17.1.2006. Neither in his complaint nor in his examination-in-chief as PW-1, the complainant has stated on what particular day, the said cheques were given. However, the first reference regarding the date of issuance of those two cheques can be seen in his legal notice at Ex.P-7, which according to him, was issued after dishonour of those two cheques. In the said legal notice, the complainant has stated that the cheques in question were issued to him by the accused on 16.1.2006. The very same complainant in his cross- examination as PW-1 has at more than one place stated that those two cheques in question were given to him by the accused on 15.1.2006. Thus, in connection with the date of issuance of the cheques, three different dates appears i.e., 15.1.2006, 16.1.2006 and 17.1.2006. In that regard, now the question arise as to when according to the complainant those cheques were issued to him after he issued a notice calling upon for repayment of the loan amount as per Ex.P-9.
Then, the date of service of the notice upon the accused would be of some importance.
17. Admittedly, the said notice said to have been issued by the complainant calling upon the accused to repay the alleged loan amount is at Ex.P-9 and is dated 12.1.2006. To show that the said notice was sent to him both Registered Post Acknowledgement Due, which was duly served upon the accused and also under Certificate of Posting, the complainant has produced a postal acknowledgement card and got it marked at Ex.P-10 and Certificate of Posting (UCP) and got it marked at Ex.P-13. It is not in dispute that the postal acknowledgement at Ex.P-10 shows that the notice sent therein was served upon the addressee i.e., the accused on 19.1.2006. Even DW-1 also in his evidence has stated that he received the notice at Ex.P-9 under Registered Post Acknowledgement Due on 19.1.2006.
However, he has stated that, except the said notice under registered post, he has not got it under any other mode. According to the accused, he has not received a copy of Ex.P-9 under Certificate of Posting.
18. The complainant’s case is that, after he sending the said notice at Ex.P-9 to the accused, the cheques at Exs.P-1 and P-2 were given to him by the accused. Therefore, it is only after the said demand for payment communicated to the accused, those two cheques should have been issued, which is also the case of the complainant. When the postal acknowledgement card and the evidence of DW-1 clearly go to show that the notice under Ex.P-9 was served upon the accused only on 19.1.2006, then, the say of the complainant that the cheques in question were given to him on 15.1.2006 (or even on 16.1.2006 or 17.1.2006) becomes highly suspectable. To overcome that, learned counsel for the appellant in his argument canvassed a point that PW-1 in his evidence has also stated that after sending the notice under Registered Post Acknowledgement Due and under Certificate of Posting, the complainant also telephoned to the accused at 8.00 p.m. on 14.1.2006 and informed him about the same. As such, immediately on the very next day, the accused has approached him and issued the cheques.
The said explanation given by the learned counsel for the complainant in his argument on that point is not acceptable for the reason that, had that been the case, at the earliest point of time the complainant should have clearly stated in his complaint that even though the notice sent under registered post reached the accused at a subsequent date, but, based on his alleged earlier information, the accused issued him the cheques at Exs.P-1 and P-2. The complainant neither in his complaint nor in his evidence as PW-1 whispered anything about the same. On the other hand, in his complaint, as well in his examination-in-chief as PW-1, he has stated that the he got issued a legal notice to the accused on 12.1.2006, calling upon him to pay the amount of `80,000/- and the said notice was duly served on the accused and accused on complying the demand made by the complainant, issued two blank cheques. (Emphasis supplied by me).
19. Thus, even according to the complainant, the issuance of cheques was in response to a demand made. The said demand is made only through the notice at Ex.P-9, which according to the complainant, was sent both under Registered Post Acknowledgement Due and under Certificate of Posting. The alleged telephonic communication to the accused said to have been made by the complainant at 8.00 O’Clock on 14.1.2006, even according to PW-1, was only an information. It is because, PW-1 in his evidence has stated that he had informed the matter to the accused over the phone. He has not stated that even over the telephone, he made the demand for the payment of the amount. Therefore, when no demand was made over the telephone, but, it was only an information communicated to the accused, but, issuance of cheques was as a compliance of demand made by the complainant under a notice dated 12.1.2006, then, according to the complainant’s version both in his complaint, as well in his examination-in-chief as PW-1, if at all the cheques at Exs.P-1 and P-2 were issued to him in response to his notice dated 12.1.2006, the same should have been only after the receipt of the said notice by the accused.
20. As discussed above, the date of receipt of the said notice i.e., the date at which for the first time accused came to know about the demand made towards the repayment of the loan, was when he received the notice at Ex.P-9, which is now proved to be the date 19.1.2006. Therefore, the question of issuance of cheques dated 17.1.2006, there being no demand communicated to the accused as on that day or any other earlier day, would not arise.
21. Learned counsel for the appellant also canvassed an argument that, apart from Registered Post Acknowledgement Due, the notice at Ex.P-9 was also sent under Certificate of Posting, which has reached the addressee on the very next day i.e., on 13.1.2006. To support his argument, he has also drawn the attention of this Court to an admission made by DW-1 in his cross-examination to the effect that a letter posted in Mangaluru would reach him within a day. No doubt, such a statement has been made by DW-1 stating that the postal authorities would take only a day’s time for local delivery of postal letters addressed to him, however, by that itself, it cannot be inferred that the letters sent under Certificate of Posting through Ex.P-13 has also reached the addressee i.e., the accused, on 13.1.2006 itself. It is for the said reason, the accused has specifically and clearly stated that he has not received the copy of the legal notice at Ex.P-9 under Certificate of Posting, but, he has received it only under registered post, the acknowledgement towards to it is at Ex.P-10.
Further, had really the complainant believed that the notice at Ex.P-9 sent to the accused under Certificate of Posting had reached him, then, necessarily PW-1 should have stated that the copy of the legal notice sent under Certificate of Posting also has reached the accused. On the contrary, PW-1 in his cross- examination has clearly stated that he does not know whether the notice sent to the accused under Certificate of Posting has been delivered to him and if it is delivered, he does not know when it is delivered. Therefore, what is not the case of the complainant that the notice sent under Certificate of Posting has positively delivered to the accused, cannot for the first time canvassed in the argument, that too, when the said argument is against the evidence and material placed by the complainant himself.
Therefore, the finding of the trial Court that the alleged issuance of cheques at Exs.P-1 and P-2 by the accused to the complainant on 15.1.2005 or 16.1.2006 is highly suspicious, cannot be termed as an erroneous finding.
22. The other argument of the learned counsel for the appellant that when the accused is said to have issued the second set of four blank cheques while availing the second loan, why he did not ask for return of first set of cheques and also his another point of argument that why he did not give instructions to his banker to stop the payment of the alleged eight blank cheques said to have been given by him to the complainant as a security, though remains unanswered, but, it would not come to the fore-guard as the alleged discrepancy in the date of delivery of the cheques in question has come on the fore-guard. Therefore, no doubt, the accused has not issued any stop payment instructions to his banker, but, at the same time, it cannot be forgotten that both accused and complainant being very close friends and having business dealings since several years and that the accused at more than one place and since beginning is telling that despite his demand for return of those blank cheques, the complainant was telling to him that those cheques were misplaced by him, in such circumstances, the mere non-instructing his banker to stop payment of those cheques, by itself would not give any advantage to the complainant to hold that the cheques in question were given by the accused towards the discharge of the loan.
23. The above point that the cheques at Exs.P-1 and P-2 cannot be considered as issued towards discharge of any legal liability towards the complainant, also gains support upon one more point that, even according to PW-1/complainant, the lending of two loans i.e., `50,000/- in the year 2003 and another sum of `30,000/- in the year 2005, were not interest-free loans. As admitted by PW-1 himself at more than one place, he had several monetary transactions, whereunder, the accused depending upon his necessities, once in a week or once in fifteen days, was availing hand loans from the complainant and was repaying the same along with interest calculated at `1/- per `1,000/- per day or at any other agreed rate. The evidence on this point has clearly come in the cross-examination of PW-1. Even according to PW-1, as has come out in his cross- examination, the alleged loan of `50,000/- was also agreed to carry interest upon it payable by the accused at the rate of `5/- per every `1,000/- per month. If it is so, then, why did not the complainant wrote the cheques at Exs.P-1 and P-2 for that amount, including the interest amount agreed and payable till the date of issuance of the cheques, also creates a doubt, which has remained unanswered any where by the complainant.
According to the complainant, the contents of Exs.P-1 and P-2 were written by himself though at the request of the accused. In such a case, when the complainant showing himself to be a regular money lender to the accused, that too, repayable with interest on the principal amount, then, how come he ignores the calculation of the interest on huge amount of `50,000/-
+ `30,000/- for several years, remains a question. In that regard, not even a whisper is made by the complainant either in his complaint or in his evidence. This also thickens the cloud of suspicion in the version of the complainant that towards the alleged repayment of the loan of the year 2003 and 2005, the cheques in question were issued by the accused to him.
24. Therefore, when the entire evidence led by both side are weighed, the laches on the part of the accused would be only with regard to not taking a legal action against the complainant for his non-return of the eight blank cheques said to have been given to him as a security and also not giving a stop payment instruction to his banker. On the other hand, the weakness in the case of the complainant commences from the very initial stage of the date of alleged issuance of the cheques at Exs.P-1 and P-2. Since the said issue regarding the very issuance of the cheques being the very basic issue, the same results as a sufficient rebuttal of the presumption of legally enforceable debt that had formed in favour of the complainant.
25. Since the trial Court after appreciating the evidence placed before it has rightly come to the conclusion that the complainant has failed to prove the alleged guilt against the accused beyond reasonable doubt, I do not find any perversity or illegality or irregularity in the said finding of the trial Court.
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 V J.M.F.C., Mangaluru, Dakshina Kannada, in C.C.No.1270/2006, dated 18.04.2007, is confirmed.
The Registry is directed to transmit a copy of this judgment along with lower Court records to the lower Court immediately.
Sd/- JUDGE bk/-