IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF DECEMBER, 2019 BEFORE THE HON’BLE MR.JUSTICE K.N. PHANEENDRA CRIMINAL APPEAL NO.799/2010 BETWEEN:
M/S.S.V. ENTERPRISES 2ND FLOOR, SUBEDAR CHATRAM ROAD CROSS, BEHIND KAPALI TAKIES GANDHINAGAR BENGALURU – 560 009 REPRESENTED BY PROPRIETOR SRI.M. SRINIVAS NAIDU … APPELLANT (BY SRI.C.VINAY SWAMY & SRI.S.K.SHETTY, ADVOCATES) AND:
SRI. TULASIRAM.V FRIENDS CINE CREATIONS 2/14, 6TH ‘A’ CROSS RIGHT SIDE MAGADI ROAD BENGALURU – 560 023 ... RESPONDENT (BY SMT. NETHRAVATHI K., ADVOCATE FOR M/S P.V. VASUDEVAN AND ASSOCIATES) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) CR.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 23.02.2010 PASSED BY THE XVIII ACMM & XX ASCJ., BENGALURU IN C.C.NO.26641/06-ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF NEGOTIABLE INSTRUMENTS ACT.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 14.11.2019 COMING ON FOR ‘PRONOUNCEMENT OF JUDGMENT, THIS DAY K.N. PHANEENDRA, J. DELIVERED THE FOLLOWING:
JUDGMENT The present appeal is filed by the aggrieved complainant against the judgment of acquittal passed by the XVIII ACMM and XX ASCJ, Bengaluru City in CC No.26641/2006 dated 23.2.2010 for the offence punishable under Section 138 of the Negotiable Instruments Act.
2. Heard and perused the records.
3. Before adverting to the grounds of appeal, it is just and necessary to bear in mind few facts of the case as per the complaint averments. The complainant has filed a complaint u/s.200 of Cr.PC. making allegations under section 138 of the Negotiable Instruments Act, stating that, the complainant is a businessman and accused was interested in Film production. As both are known to each other, the accused had borrowed a sum of Rs.75,000/- as loan from the complainant for the purpose of film production. In this connection, for the repayment of the said amount, the accused had issued a cheque bearing No.592344, dated 7.6.2006 for a sum of Rs.50,000/- drawn on The Hong Kong and Shanghi Banking Corporation Limited, Manipal Center, Dickenson road, Bengaluru. Accordingly, the complainant presented the said cheque to his Bankers - Union Bank of India, Malleshwaram Branch, Bengaluru. However, the cheque was dishonoured with the shara noted by the Banker “Funds insufficient” vide endorsement dated 8.6.2006. Thereafter, the complainant stated that he has issued a legal notice on 15.6.2006 calling upon the accused to make good the payment of Rs.50,000/-. Though the notice was served on the accused on 16.6.2006, the accused has issued an untenable reply to the said notice, but he has not complied with the notice by making the payment. Therefore, the complainant has filed the complaint within time i.e., on 18.7.2006. On appearance, the accused has contested the proceedings by taking various grounds. The plea of the accused was recorded and he denied the allegation made against him and claims to be tried.
4. The complainant examined himself as PW-1 and got marked exhibits P1 to P9 and accused also examined himself as DW1 and got marked Ex.D1. The trial Court after appreciating the oral and documentary evidence on record, has acquitted the accused mainly on the ground that the complainant had no licence for lending money and he is not a money lender. Therefore, the complainant has not proved the lending of money in accordance with law. Further, the cheque in question was issued not in respect of any legally enforceable debt and the complainant has not proved that there was existence of any legally recoverable debt as on the date of issuance of the cheque or earlier and therefore, the cheque was a stale cheque and it is a time barred debt claimed to be recovered by the complainant. Mainly, on these two grounds, the trial Court has acquitted the accused. The trial Court in fact, has raised a presumption in favour of the complainant u/s.139 of the Negotiable Instruments Act. The trial Court has formulated a point as to - “Whether the accused has rebutted the presumption or not?” Holding that the accused has rebutted the presumption on the above said two grounds, the trial Court has acquitted the accused.
5. The tenor of the cross examination of the complainant shows that there is no denial with regard to the issuance of the cheque and also there is no denial with regard to the presentation of the cheque to the Bank and it came to be dishonoured and also issuance of notice by the complainant and as well as issuance of reply notice. But, in the course of cross examination, it is elicited that the Complainant has not specifically stated that on which date, the said amount was given to the accused, though it is stated in the evidence that it was on 9.1.2003. He has also admitted that he has not shown any of this amount in his Income Tax Returns. He has also admitted that he has no licence under any law to give such amount by way of loan. It was suggested that the accused was not due in a sum of Rs.50,000/-, it is further suggested that the accused has returned the entire amount but in spite of payment of the entire amount, the cheque was not returned. It is also suggested that the contents of the cheque is not in the hand writing of the accused. But all those suggestions were emphatically denied by PW-1. Except the above said cross examination, nothing has been elicited that it was a stale cheque and the complainant was a regular money lender and he has been doing the business of money lending etc., Even in his evidence dated 6.4.2009, by way of an affidavit before the court, he has stated that - He was one of the Heroes in the film “Dhali” which was released on 10.1.2003. He was not the producer of the Kannada Film “Dhali”. He has not borrowed any money from the complainant and issued any cheque. The complainant is a total stranger to him etc., In the course of cross examination, he has categorically stated that Ex.P-1, the cheque and the Ex.P-9 documents was given to one Swaminathan and he has taken loan of Rs.50,000/- from Swamynathan. Therefore, he has issued a cheque to the said Swamynathan and he has repaid the said amount of Rs.50,000/- but the said cheque was not returned to him in spite of his request, therefore, borrowing of Rs.50,000/- and issuance of the cheque in favour of one Swamynathan is stated but the said Swamynathan has not been examined before the court. He has not denied in the course of cross examination that, the cheque does not belong to him and he has not signed the cheque etc., On the other hand, he has admitted the same in the course of cross examination.
6. Therefore, on facts, issuance of the cheque, signature on the cheque have been admitted by the accused. Therefore, the only point that remains for consideration of this court is whether the non-production of any licence for providing loan is fatal to the complainant’s case and further, whether there was existence of any legally recoverable debt and how it has to be considered.
7. These two points are in fact covered by the judgment of this court, as cited by the learned counsel for the petitioner reported in 2007(1) KLJ 238 between H. Narasimha Rao. Vs. Venkataram, wherein this court has held in the following manner:
“Banking – Dishonour of Cheque – Time- barred debt – Section 138 of Negotiable Instruments Act, 1881 (the ‘Act’) – Complainant granted loan to Accused on Condition of repayment within short period – Accused issued two cheques in favour of Complainant towards discharge of loan – on presentation, cheques were bounced – Complainant issued demand notice, the receipt of which was acknowledged by Accused but untenable reply was sent along with – Therefore, Complainant had filed complaint under Section 138 of the Act against Accused – Magistrate, however, acquitted Accused on ground that Accused could not be held liable to pay any time barred debt – Hence, present appeal – Held, there was no legal bar for debtor agreeing to pay time barred debt – No fresh consideration was required for debtor’s promise to pay time barred debt – Moreover, undisputed signatures on cheques by Accused constitute agreement to pay time barred debt – Offence under Section 138 made out – Appeal allowed”
8. In view of the above said decision, once the cheque is proved that the same was issued with reference to any debt, even if it is a time barred debt, in such an eventuality such stand is not available to the accused that there is no existence of any debt or liability. Therefore, on the said ground, the acquittal recorded by the trial court is not proper.
9. In another decision reported in 2007(2) KLJ 19 between S. Parameshwarappa S/o. late Sannasiddegowda and P. Ratna W/o.S.Parameshwarappa Vs. S.Choodappa S/o.M.A. Shankarappa, wherein, this court has observed in the following manner:
“a. NEGOTIABLE INSTRUMENTS ACT, 1881 – Section 138-Once the cheque issued the accused cannot contend that it is not issued in respect of legally enforceable debt or else proper procedure has not been followed according to the provisions of Negotiable Instruments Act.
b. NEGOTIABLE INSTRUMENTS ACT, 1881 – Section 138-Under Section 138 Negotiable Instruments Act, the question of complainant having Money Lending License does not arise.
c. NEGOTIABLE INSTRUMENTS ACT, 1881 – Sections 138, 142 – Fine amount court is entitled to impose fine to the extent of double the cheque amount. In the present case, the amount of Rs.34,65,000-00 awarded by the Trial court wad reduced to Rs.28,25,000-00 out of which Rs.25,000-00 was ordered to be treated as fine and the remaining amount was ordered to be paid to the complainant as compensation.”
10. The Head Note B in the above said decision clearly discloses so far as the proceedings u/s.138 of the Negotiable Instruments Act is concerned, the question of the complainant having money lending licence does not arise. After considering various decisions of different High Courts and the Hon'ble Apex court, this court has come to such a conclusion. Therefore, acquittal of the accused on the above said ground by the trial court is also not proper and correct. The above said principles are also recognized by the Kerala High court in Criminal Revision Petition No.2622/2006 decided on 8.8.2006 between Ramakrishnan and Gangadharan Nair & Another with reference to the time barred debt and the cheque being issued covering even the time barred debt is valid.
11. In another ruling of the Bombay High court in Criminal Appeal No.57/2006 dated 21.7.2008 between Shyamsundar Babu Naik Dessai Vs. Baban Anant Naik, wherein the court has observed that time barred debt, can also be covered by acknowledgement by issuing a cheque.
12. Therefore, under the above said facts and circumstances, the order of the Trial court is illegal. On those grounds, the accused should not have been acquitted.
13. Though the learned counsel relied upon a decision reported in 2014 (12) SCC 539 between Indus Airways Pvt.Ltd., & Others Vs. Magnum Aviation Pvt.Ltd., & another wherein the Hon'ble Apex court has observed that the existence of legally enforceable debt or other liability is an essential condition for constitution of an offence u/s.138 of the Negotiable Instruments Act. The above said ruling lays down the general principles with regard to the existence of debt or liability. Therefore, once it is established that there was a transaction between the parties and the cheque was issued for payment of such liability in view of the above rulings noted in the above said cases rendered by our High court, there is no other reasons in order to deviate the principles laid down therein. Under the above said facts and circumstances, the appellant has to succeed in the appeal. Hence, the following:
ORDER The appeal is allowed. The judgment of acquittal recorded by the Trial Court in CC No.26641/2006 dated 23.02.2010 for the offence punishable under Section 138 of the Negotiable Instruments Act is hereby set aside.
Consequently, the respondent/accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act and the accused is sentenced to pay a fine of Rs.80,000/- in default to pay the said fine amount, he has to undergo simple imprisonment for six months. Out of the said fine amount, an amount of Rs.75,000/- is ordered to be paid to the complainant as compensation. The remaining amount of Rs.5,000/- shall be confiscated to the State towards litigation expenses.
Sd/- JUDGE PL*