IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR.JUSTICE B.A. PATIL CRIMINAL APPEAL NO.550/2019 BETWEEN:
Mr. S. Balamurugan, S/o. Late S. Sundaram, Aged about 42 years, R/at No.114, 5th Cross, Milk Colony, Malleshwaram, Bengaluru – 560 055.
(By Sri. R. Nagendra Naik, Advocate for Sri. Santhosh, Advocate) AND:
Mr. C. Kumar, S/o. T. Chinnappiyan, Aged about 55 years, R/at No.253, 1st Stage, 1st Phase, 5th Main Road, Manjunatha Nagara, West of Chord Road, Rajaji Nagara, Bengaluru – 560 010.
AND ALSO AT:
M/s. Kumaran Industries, No.44/45, 3rd Cross, 11th Main Road, Kalanagara, Kammagondanahalli, ... Appellant Jalahalli West, Bengaluru – 560 015.
(By Sri. Yathish J. Nadiga, Advocate) ... Respondent This Criminal Appeal is filed under Section 378(4) of Cr.P.C., praying to set aside the judgment and order of acquittal dated 14.02.2019 passed by the XIII A.C.M.M., Bangalore in C.C. No.17653/2017, acquitting the respondents/accused for the offence p/u/s 138 of the N.I. Act.
This Criminal Appeal coming on for admission, this day, the Court delivered the following:
J U D G M E N T The present appeal has been preferred by the appellant/complainant challenging the judgment of acquittal passed by the Court of XIII Additional Chief Metropolitan Magistrate, Bengaluru in C.C. No.17653/2017 dated 14.02.2019.
2. I have heard the learned counsel for the appellant and the learned counsel for the respondent.
3. Though this case is listed for admission, with the consent of learned counsel appearing for both the parties, the same is taken up for final disposal.
4. The case of the complainant in brief is that during the month of May-2016 for business activities, accused approached and offered to sell the property bearing No.74G/8/465 formed in Sy. No.46/2 situated at Vajarahalli, Kasaba Hobli, Nelamangala Taluk. The complainant agreed to purchase for a total consideration of Rs.10,00,000/- and an agreement was also entered into in this behalf. Immediately, complainant arranged an amount of Rs.8,00,000/- and he has paid another sums of Rs.4,25,000/-, Rs.2,00,000/-, Rs.1,75,000/- respectively. Accused failed to perform and execute the sale deed and requested the complainant not to go for litigation. Finally, the settlement has been arrived and he has issued a cheque bearing No.827211 dated 21.04.2017 for a sum of Rs.10,88,000/- drawn on Indian Bank. When the said cheque was presented for encashment through the banker of the complainant, the same was returned with an endorsement as Drawers’ signature differs. Intimated the same to the accused and he gave a vague answer. Hence, the complainant caused legal notice dated 28.04.2017. But in-spite of service of notice, accused did not give reply and has not paid the amount as such, the complaint was filed.
5. Learned Magistrate took cognizance and secured the presence of the accused and also his plea was recorded. The accused/complainant got examined himself as PW.1 and got marked 20 documents and thereafter, the statement of the accused was recorded under Section 313 of Cr.P.C. Accused got examined himself as DW.1 and got marked Ex.D1. Thereafter, after hearing the learned counsel appearing for both the parties, the trial Court dismissed the complaint by acquitting the accused. Challenging the legality and correctness of the judgment, the complainant is before this Court.
6. It is the submission of the learned counsel for the appellant that the judgment of acquittal passed by the trial Court is contrary to law, facts and materials placed on record. It is his further submission that the earlier agreement entered into between the parties for selling the property and receiving the consideration is admitted. Even the signature on Ex.P1 is also admitted by the accused, under such circumstance, the trial Court ought to have drawn the presumption as contemplated under Sections 118 and 139 of the Negotiable Instruments Act, 1881 (hereinafter referred as “the Act”). Thereafter, the accused has to rebut the said presumption on preponderance of probabilities. Without looking into the said legal aspect, the trial Court has passed a cryptic order holding that the accused has proved his case and the contents of the complaint indicates that a civil suit will lie. The said observation itself is not in accordance with law. It is his further submission that all the factual matrix have been narrated in the notice and notice has been served on the respondent – accused but he has not given any reply and non giving of the reply itself, is going to accept the case of the complainant. When he has failed to perform the specific performance and has agreed to return the amount, under such circumstance, the trial Court ought to have convicted the accused. On these grounds, he prayed to allow the appeal and to set aside the impugned order and to convict the accused.
7. Per contra, learned counsel appearing on behalf of the respondent vehemently argued and submitted that the transaction between the complainant and the accused is not a legal transaction and the said documents have been created and concocted. It is his further submission that he has obtained a loan of Rs.3,75,000/-, as a security, a signed blank cheque, a stamp paper and the sale deed have been given. But even in spite of repayments of Rs.3,00,000/- and Rs.75,000/- dated 07.09.2016 and 19.09.2016 respectively the said documents have not been returned. The same have been misused by the complainant. The trial Court has rightly come to the conclusion that the complainant has not clearly established his case. In that light, it has dismissed the complaint. The complainant has not made out any good grounds so as to interfere with the judgment of the trial Court. On these grounds, he prayed to dismiss the appeal.
8. I have carefully and cautiously gone through the submissions made by the learned counsel appearing for both the parties and perused the records including the trial Court records.
9. On close reading of the evidence of PW.1, he has reiterated what has been stated in the complaint and he has been cross-examined in length. In the cross-examination, it has been suggested that the hand writing found on Ex.P1 differs and even the ink used is also differing and also it has been suggested that a blank cheque has been given to him. But as could be seen from the evidence of the accused, he has contended that the complainant was known to him since four to five years and has taken an amount of Rs.3,75,000/- on 12.05.2016 and 14.05.2016 through two cheques. As a security to the said amount, he has given a sale deed pertaining to Nelamangla site and a blank cheque signed by him and has also given a stamp paper signed by him. Further it is stated with regard to the repayment of the said amount that during the course of cross-examination, he has admitted that the cheque Ex.P1 pertains to his account and the signature found thereon belongs to him. Under such circumstance, even if he has issued a signed cheque without filling up of the other contents of the cheque then thereby, it indicates that he has permitted the holder of the cheque to fill up the same and to make it a negotiable instrument and Even Section 20 of the Act provides an authority to the holder of the cheque to complete the same and to honour. In that light, the contention taken up by the accused that a blank cheque has been given and the other contents have been written without his notice or knowledge is not acceptable in law.
10. As could be seen from the records and the evidence, accused has admitted the signature on Ex.P1. When once, he has admits the signature on the cheque Ex.P1 then, the Court is duty bound to draw a presumption as mandated under Section 139 of the Act, it includes a presumption that there exists a legally enforceable debt or liability. Of course, this is in the nature of rebuttal presumption and it is open to the accused to raise a defense wherein, he can be contested the existence of legally enforceable debt or liability. This proposition of law has been laid down by the Hon’ble Apex Court in the case of Rangappa Vs. Sri.Mohan reported in (2010) 11 SCC 441, wherein at paragraph 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.”
11. On going through the ratio laid down by the decision quoted supra, the accused has to raise a defense wherein, he can prove that there was no legally enforceable debt or liability. On going through the evidence of DW.1, he has contended that he has taken a loan of Rs.3,75,000/- and has returned the said amount on 07.09.2016 and 19.09.2016. In order to substantiate his contention, he has produced Ex.D1 – the pass book of the Indian Bank. No doubt, the said Ex.D1 shows that an amount of Rs.3,00,000/- has been withdrawn on 07.09.2016 and an amount of Rs.2,00,000/- has been withdrawn on 19.09.2016. But merely withdrawing the amount from his account, it will not prove the fact that the said amount has been paid to the complainant in satisfaction of the loan admittedly, which he has taken from the complainant. When he has returned the said loan as contended by him as per the dates contained in Ex.D1, under such circumstance, when the notice has been served on him for demand of the cheque amount, then under such circumstances, he could have contended and stated by giving a proper reply that the amount, which has been claimed, has already been paid for the reason best known to him but he has kept quite. No prudent man will keep himself silent while a person has been alleged that some amount is due from him.
12. Be that as it may. The contention of the accused if it is taken, he is said to have given the sale deed of a site of Nelamangla and one blank stamp paper signed by him along with blank cheque. If the amount has been repaid as contended by him, then immediately he could have asked for return of the said documents, which have been given as a security. Though during the course of argument, the learned counsel for the respondent-accused submitted that orally, it was requested to return the said documents, the same have not been returned and the same have been misused but when the notice has been served as contemplated under Section 138 of the Act then under such circumstance, immediately he could have reacted and call for said documents along with intimation that the said amount has been paid.
13. In the absence of such material, it cannot be inferred that the said sum of Rs.3,75,000/-, which is said to have been taken, has been returned by accused. When once the complainant establishes the fact that there exists a legally recoverable debt or liability and the same has been admitted by the accused, then under such circumstance, he has to prove the same by cogent and acceptable evidence. Mere denial or rebuttal by the accused was not enough to substantiate his case. Section 139 of the Act has been introduced as an exception to the general rule as to the burden of proof and it shifts on the accused to prove by cogent evidence that there was no debt or liability and whatever the contentions and the reasons, he has contended if he fails to prove the same, then under such circumstance, the accused is liable to be convicted under Section 138 of the Act. This proposition of law has been laid down 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 reads 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.”
14. Taking into consideration of the ratio laid down in the above decisions and the factual matrix of the case on hand, it clearly shows that the accused though taken up a specific contention but the same contentions have not been established on preponderance of probabilities.
15. I am conscious of the fact that the accused is not bound to rebut the said presumption on strict proof but it has to be proved on preponderance of probabilities. But even it is taken at the face of it, the case of the accused if it is accepted even then, the contention taken is not going to convince that there was no debt or liability and the documents, which are said to have been taken as a security have been misused by the complainant. In that light, the trial Court has committed an error.
16. I have carefully and cautiously gone through the judgment of the trial Court. The judgment of the trial Court does not taken into consideration a provisions of law and has given a wrong premise and has also come to its own conclusion that as per the contents of the complaint, the complainant instead of filing a civil suit, he has filed a present case. It is nobody’s case that even the accused has also not contended the case in which, the Court has made an observation. That itself goes to show that the trial Court has not applied its mind to the facts of the case and legal propositions of law. When once the accused admits the signature on the cheque, at that time, as mandated by Section 139 of the Act a presumption ought to have been drawn and the same has also not been over-looked. In that light, the judgment of the trial Court appears to be not in accordance with law and an illegal judgment has been passed. In that light, it requires to be interfered with.
17. Taking into consideration of the above said facts and circumstances of the case, the appellant has made out a case to interfere with the judgment of the trial Court. Accordingly, appeal is allowed and the judgment of the Court of XIII Additional Chief Metropolitan Magistrate, Bengaluru in C.C. No.17653/2017 dated 14.02.2019 is set aside and the respondent-accused is convicted and sentenced to pay a fine of Rs.11,00,000/- with default sentence. In the event, if he fails to pay the said amount, he has to undergo simple imprisonment for a period of one year. Out of the said fine amount, an amount of Rs.10,88,000/- has to be paid to the complainant on proper identification and acknowledgement. The remaining amount has to be forfeited to the Government to meet out the cost.
Sd/- JUDGE VBS