IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR. JUSTICE B.A. PATIL CRIMINAL REVISION PETITION NO.87/2019 C/W CRIMINAL REVISION PETITION NO.133/2019 IN CRL.RP.NO.87/2019 BETWEEN:
Mr. Santosh S Lad S/o. Shivaji Lad Aged about 42 years #520, Amruth Nivas VII Main, XIII cross RMV II Stage Dollars Colony Bengaluru-560 095.
(By Sri Manjunath K.V., Advocate) AND:
…Petitioner M/s Rockline Entertainment Pvt. Ltd., A limited company having office at #96, Dr.Rajkumar Road Bengaluru-560 021 Represented by its Director Mr. T.N.Venkatesh …Respondent (By Sri A. Gopiprakash, Advocate) This criminal revision petition is filed under section 397 read with Section 401 of Cr.P.C praying to set aside the judgment dated 19.6.2017 convicting the petitioner for the offence under Section 138 of the N.I. Act in C.C.No.21527/2015 on the file of the XLII Chief Metropolitan Magistrate Bengaluru and etc., IN CRL.RP.NO.133/2019 BETWEEN:
M/s Rockline Entertainment Pvt. Ltd., A limited company having office at #96, Dr.Rajkumar Road Bengaluru-560 021 Represented by its Director Mr. T.N.Venkatesh …Petitioner (By Sri A. Gopiprakash, Advocate) AND:
Mr. Santosh S Lad S/o. Shivaji Lad Aged about 42 years #520, Amruth Nivas VII Main, XIII cross RMV 2nd Stage Dollars Colony Bengaluru-560 095.
(By Sri Manjunath K.V., Advocate) … Respondent This criminal revision petition is filed under section 397 read with Section 401 of Cr.P.C praying to set aside the impugned order dated 20.12.2018 passed by the Principal City Civil and Sessions Judge, Bengaluru in Crl.A.No.1195/2018 in C.C.No.21527/2015 dated 19.06.2017 passed by the XLVI A.C.M.M. Bengaluru in only on the extent of not exercising the right in double the cheque amount as a fine instead of imposing the fine of Rs.7,25,05,000/- (Rupees Seven Crores Twenty Five Lakhs and Five Thousand only) vide Annexure-A and B.
These criminal revision petitions coming on for Orders, this day, the Court made the following:
ORDER Criminal Revision Petition No.87/2019 has been filed by the petitioner-accused challenging the legality and correctness of the judgment passed in Crl.A.No.941/2017 dated 20.12.2018 and Criminal Revision Petition No.133/2019 has been filed by the petitioner-complainant challenging the legality and correctness of the judgment passed by the Principal City Civil and Sessions Judge, Bengaluru in Crl.A.No.1195/2018.
2. I have heard the Senior Counsel Sri Prabhuling K. Navadagi appearing on behalf of the learned counsel for the petitioner-accused and the learned counsel for the respondent-complainant in both the cases.
3. The gist of the complaint as per the case of the complainant before the Court below is that one M/s Media One Global Entertainment Ltd., represented by its Director engaged in the business activities was badly in need of funds to clear the loan amount of Rs.6,00,00,000/- which had been availed from one M/s Sheetal Developers. Accused approached the complainant and requested to save M/s Media One Global Entertainment Ltd., from its debt by lending a sum of Rs.6,00,00,000/- by assuring the complainant that the accused himself would repay the same. On the request and assurance made by the accused, the complainant agreed to clear the loan of said M/s Media One Global Entertainment Ltd., and in furtherance of the assurance by accused, the complainant issued Demand Draft bearing No.013674 dated 17.11.2014 drawn on Axis Bank, Peenya Branch, Bengaluru in favour of M/s Sheetal Developers and the same was encashed. The accused had assured the complainant and agreed to discharge the said liability and had issued 10 cheques bearing Nos.000201, 000202, 000203, 000204, 000205, 000206, 000207, 000208, 000209, 000210 all dated 12.5.2015 drawn on HDFC Bank Limited, Miller Road, Bengaluru and the same was reduced into writing by an agreement dated 24.11.2014. Subsequently, out of 10 cheques, accused sought return of 3 cheques agreeing to repay the same in cash in due course of time. On the request of the accused, the complainant presented the said cheques for encashment through M/s Syndicate Bank and all the cheques were dishonoured with shara ‘Funds Insufficient’ on 14.5.2015. Thereafter, the complainant communicated the said fact to the accused, at that time, accused requested to present all seven cheques for encashment. Accordingly, on 23.5.2015 he presented the said cheques for encashment and the same have been dishonoured with shara ‘Funds Insufficient’ on 25.05.2015. Thereafter, the complainant got issued legal notice dated 12.06.2015. The same was served on the accused. The accused issued reply notice on untenable grounds dated 24.11.2014. Since he became the defaulter, a private complaint was registered against the accused. Thereafter, the Trial Court took cognizance and secured the presence of the accused. After following the due procedure, the plea of the accused was recorded. Accused pleaded not guilty and claims to be tried, as such the trial was fixed.
4. The complainant, in order to prove his case, got examined himself as PW.1 and got marked documents Exs.P1 to P17. Thereafter, accused was examined under Section 313 of Cr.P.C and the accused has not led any evidence nor produced any documents.
5. After hearing the learned counsel for the parties, the Trial Court convicted the accused. Being aggrieved by the same, the accused preferred the appeal and the said appeal also came to be dismissed by confirming the judgment of the Trial Court.
6. The main grounds urged by the learned counsel for the petitioner-accused is that the Trial Court as well as the First Appellate Court have committed grave error in law in taking cognizance of the offence and convicting the accused. It is his further contention that it is nobody’s case that the money has been taken by the accused from the complainant. Ex.P1-the agreement entered into between the parties specifically says that the cause of action will arise only at the time of termination of the agreement. It is his further submission that the admitted fact is that the said agreement is still in existence and the said agreement has not been terminated. It is his further submission that the petitioner-accused has made out the case that he has not borrowed any amount from the complainant.
7. When the matter was dictated in the open Court and not yet singed, the learned counsel for the petitioner-accused filed a memo for ‘Being Spoken To’, as such, it was heard on 05.11.2019. It is the submission of the Senior Counsel Sri. Prabhuling K. Navadagi that there cannot be two agreements, the said agreement is a tri- party agreement and execution of the same is depending on contingency as it is contingent contract. Enforcement of the contract arises only after termination of the agreement. It is his further submission that the intention of the agreement has to be taken into consideration. In that light, it is his submission that though word ‘or’ has been used, a reasonable construction has to be made. He has not actually received the amount, but he is only a Guarantor to the said agreement entered into between the parties. It is his further submission that the sentence imposed has to be reduced reasonably. Even the records indicates that the 3rd party has taken the Demand Draft to return the said amount of Rs.4 Crores to the complainant, but the counsel for the complainant opposed the said memo by contending that he is not willing to receive only cheque amount, as he has incurred heavy loss in litigation and accused has disputed the execution of the agreement. In order to substantiate his argument he relied upon the decision in the case of Somnath Sarkar Vs. Utpal Basu Mallik and another reported in (2013) 16 SCC 465. It is his further submission that a leniency may be shown in imposing the sentence. On these grounds, he prayed to allow the petition and to set aside the impugned order.
8. Per contra, learned counsel appearing on behalf of the respondent-complainant vehemently argued and submitted that the petitioner-accused has not stepped into the witness box and not led any rebuttal evidence to prove his case. It is the specific defence of the accused that the cheques have been stolen and misused by the complainant but no complaint has been registered and no action has been taken in this behalf. It is the further contention that though the accused has taken up the contention that he has not taken any loan amount from the complainant, but Ex.P1-agreement clearly goes to show that in order to discharge his liability, as per the request, the said amount has been given to M/s Sheetal Developers. It is his further submission that this Court while exercising its revisional power has got only limited power that unless the petitioner-accused establishes the fact that the said judgment is perverse and unreasonable and not in accordance with law, this Court cannot entertain the petition.
9. It is his further submission that no documents have been produced and no material evidence has been brought on record about the theft of the said cheques. It is his further submission that Ex.P12-reply notice clearly goes to show that the said cheques bear his signature and the same have been stolen. In that light, the Court below has rightly drawn the presumption and convicted the accused. There are no good grounds to interfere with the judgment of the Trial Court. On this ground, he prayed to dismiss the petition.
10. I have carefully and cautiously gone through the submissions made by the learned counsel appearing for the parties and perused the records.
11. It is the specific contention of the learned counsel for the petitioner – accused that it is nobody’s case that the money has been taken by the accused. But as could be seen from the cross examination of PW.1, he has admitted the suggestion that in Ex.P1, it has been mentioned that the Demand draft has been given to M/s Sheetal Developers and the said demand draft was given to clear the loan amount borrowed by M/s Media One Global Entertainment Ltd., The said suggestions have been admitted. When the said fact is suggested and admitted with regard to discharge of loan borrowed by M/s Media One Global Entertainment Ltd., under such circumstances, the contention of the petitioner-accused that it is nobody’s case that the money has been taken by the accused and accused is not liable to pay any amount is unsustainable in law.
12. Be that as it may, Ex.P1 is the accused before the Court and he is first party in the agreement, complainant is the second party and M/S.Media Global Entertainment is the third party in the agreement. In the agreement itself it has been agreed that first party is not able to provide funds by itself to clear the loan of M/S.Media One Global Entertainment Ltd and on his request complainant lend a sum of Rs.6 Crores as interest free loan and accused has agreed to pay the loan amount to the complainant. When the said agreement has not been disputed and the recitals of the said agreements are clearly fixing the liability on the accused, then under such circumstances the accused cannot contend that he has not received any amount and he was only a Guarantor to the said amount lent by the third party. It is only because of the request of the accused, in order to clear the loan the complainant has given the said amount. Even assuming that if he is only a Guarantor, his liability is also co- extensive along with the principal borrower and if he agrees to repay the said amount as a surety and has got executed a cheque, then under such circumstances he cannot escape from the liability.
13. The next contention taken up by the learned Senior counsel is that as per the agreement complainant gets a right to recover the said loan amount through cheque only on termination of the said agreement. But I have given my thoughtful consideration, if the said agreement is conjointly read, there are two aspects, one is on termination of the agreement, the another one is the word ‘or’ has been used and it gives right to the complainant to recover the said loan amount through cheque issued by first party. In alternative right has been given to the complainant and option has been left to him. Then under such circumstances, the contention of the accused that the right accrues only on termination of agreement and still the agreement is in force and there is no cause of action does not arise at all.
14. Be that as it may. I have carefully and cautiously gone through the agreement entered between the parties. At para No.3 of the agreement, it has been specifically observed as under:-
3. Whereas failure on the part of M/s Media One Global Entertainment Ltd., to discharge the loan amount within 100 days as agreed above, then the First Party shall discharge the loan amount at the time of termination of this Agreement or the Second Party shall have full rights to recover the said loan amount through cheques issued by the First Party (SB Account No.12081000034245) vide Nos.000201, 000202, 000203, 000204, 000205, 000206, 000207 HDFC Bank Limited, Miller Road, Bangalore.
15. By going through the said para, the first party shall discharge the loan amount at the time of termination of this agreement or the second party shall have full rights to recover the said loan amount through cheques issued by the first party. Under such circumstances, the word ‘or’ has been used in the above clause and on the other hand, full power has been given to the second party to recover the full amount through cheques which have been issued in the first instance by the first party. In that light, if the entire interpretation has been taken into consideration, then the second interpretation gives right to the complainant to file a complaint. In this behalf, the contention of the learned counsel for the petitioner- accused that only after termination of the agreement, the cause of action would arose does not hold any water.
16. Be that as it may, even the accused has given reply as per Ex.P12. In terms of Ex.P12, it is his specific contention that those cheques are being stolen and misused with oblique intention of causing wrongful loss to the accused but in Ex.P1, cheque numbers given to the complainant has been mentioned. Apart from that, in order to substantiate the said contention, the accused- petitioner has not stepped into the witness box even in order to rebut the presumption drawn against him. When there is an existence of agreement being entered into between the parties, in the absence of any defence evidence the contention taken by the petitioner-accused is not sustainable in law.
17. When the document itself is very clear, then under such circumstances searching for the other meaning and reasonable construction theory cannot be applicable to the present case on hand.
18. As per chapter-VI, what are the circumstances under which the oral evidence is permissible has been explained. Particularly under Section 92 of the Evidence Act, when the terms of the contract have been reduced into writing and has been proved as contemplated under Section 91 of the Evidence Act, then under such circumstances no evidence is advisable. In that light, the contention of the accused that the contents of the agreement are not properly read by the Court below is also not sustainable in law.
19. Be that as it may, when accused admits the signature and contend that said cheques have been stolen and misused with oblique intention of causing wrongful loss to the accused, then under such circumstances, the Court has to draw a presumption which is mandated under Section 139 of Negotiable Instruments Act, 1881 including the presumption that there exists legally enforceable debt or liability. It 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.
20. 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 16 it has been observed as under:-
16. All of these circumstances led the High Court to conclude that the accused had not raised a probable defence to rebut the statutory presumption. It was held that:
“6. Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant. The presumption referred to in Section 139 of the N.I. Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the Court.
The defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. Unless this barrier is crossed by the accused, the other defence raised by him whether the cheque was issued towards the hand loan or towards the amount spent by the complainant need not be considered. ”
Hence, the High Court concluded that the alleged discrepancies on part of the complainant which had been noted by the trial court were not material since the accused had failed to raise a probable defence to rebut the presumption placed on him by Section 139 of the Act. Accordingly, the High Court recorded a finding of conviction.
21. Keeping in view the above said proposition of law, if the entire case of the complainant is taken into consideration, mere denial or without there being any cogent, acceptable and rebuttal evidence by the accused, it is not enough to accept the case of the accused. Section 139 of the Negotiable Instruments Act, 1881 mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. However, the presumption is rebuttable by proving to the contrary. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused to prove by cogent evidence that there was no debt or liability. In the absence of any material, it may be presumed or assumed that there was no debt or liability. This proposition of law has been laid down by the Hon’ble Apex Court in the case of Bir Singh Vs. Mukesh Kumar reported in (2019) 4 SCC 197 at paragraphs 18, 20, and 24 it has been observed 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.
22. On the above said proposition of law, it is very clear that mere denial or rebuttal by the accused is not enough and there must be cogent and acceptable evidence to accept the said contention. In this regard, the contentions of accused-petitioner are not acceptable. He has not made out any case to interfere with judgment of the Trial Court.
23. The complainant-petitioner has challenged the judgment for enhancement of fine amount to double the cheque amount. On the contrary, learned Senior Counsel contended that some lenience may be shown to the accused since when he tried to give the demand draft, the complainant did not come forward to receive the same. He has relied on the decision in the case of Somnath Sarkar quoted supra wherein at para No.15 it has been observed as under:-
“15. We do not consider it necessary to examine or exhaustively enumerate situations in which courts may remain content with imposition of a fine without any sentence of imprisonment. There is considerable judicial authority for the proposition that the courts can reduce the period of imprisonment depending upon the nature of the transaction, the bona fides of the accused, the contumacy of his conduct, the period for which the prosecution goes on, the amount of the cheque involved, the social strata to which the parties belong, so on and so forth,. Some of these factors may indeed make out a case where the court may impose only a sentence of fine upon the defaulting drawer of the cheque. There is for that purpose considerable discretion vested in the court concerned which can and ought to be exercised in appropriate cases for good and valid reasons. Suffice it to say that the High Court was competent on a plain reading of Section 138 to impose a sentence of fine only upon the appellant. Inasmuch as the High Court did so, it committed no jurisdictional error. In the absence of a challenge to the order passed by the High Court deleting the sentence of imprisonment awarded to the appellant, we do not consider it necessary or proper to say anything further at this stage.”
24. In the above said paragraph, it has been observed that Trial Court is having considerable discretion, which can and ought to be exercised in appropriate case. On perusal of order of the Trial Court, it has exercised its discretion vested with it. In that light, I feel that it does not require any interference and hence, the contentions of both the counsels are not accepted.
25. I have carefully and cautiously gone through the entire evidence and the judgments of the Trial Court as well as the First Appellate Court. They are neither perverse nor illegal so as to interfere with them. It is well settled proposition of law that revisional court is having only limited jurisdiction and it can only interfere in case of apparent error being occurred on the face of the records or if any illegality has been committed by the Trial Court or first Appellate Court. No such case is made out by both the parties.
26. Though criminal revision petition No.133/2019 has been preferred by the complainant he has also not made out any good grounds to allow the revision petition and to modify the order.
27. In the light of the discussion held by me above, I am of the considered opinion that the accused and complainant have not made out any good grounds to interfere with the judgments of the Courts below. Hence, both the petitions are dismissed as devoid of merits.
In view of disposal of the above petitions, IA Nos.3/2019 and 4/2019 do not survive for consideration and accordingly, the same are disposed of.
Sd/- JUDGE PYR