IN THE HIGH COURT OF KARNATAKA AT BENGALURU R DATED THIS THE 26TH DAY OF NOVEMBER, 2019 BEFORE THE HON' BLE MR.JUSTICE R DEVDAS CRIMINAL APPEAL NO.594 OF 2018 BETWEEN SATHISHA. B. A.
S/O. SRI. ANNEGOWDA, AGED ABOUT 61 YEARS, RESIDING AT NO.361, FA QUARTERS, 4TH CROSS, BEHIND HAL HOSPITAL, VIMANAPURA, BANGALORE-560 017.
(BY SRI NITIN R, ADVOCATE) AND SRI. R. PRASAD S/O. SRI. RAJAN, RESIDING AT FA 225, 2ND CROSS, 2ND MAIN, HAL TOWNSHIP, BEHIND HAL HOSPITAL, VIMANAPURA POST, BANGALORE-560 017 ALSO AT:
SRI. R. PRASAD, L304/74131-28 (SHEET METAL DEPT), LCA DIVISION, VIMANAPURA POST, HAL, BANGALORE-560 017, ...APPELLANT ALSO AT:
SRI. R. PRASAD, C/O. ARAVIND. R, PROPRIETOR OF M/S.YELLOW BOX ENTERPRISES, NO.245/B, 2ND BLOCK, 41ST CROSS, 10TH MAIN, RAJAJINAGAR, HAL, BANGALORE-560 010, AND ALSO AT:
SRI. R. PRASAD, C/O. MUNIYAPPA, SPOORTHI SAHIDDI BUILDING, BBMP NEW NO.18, OLD NO.36, GROUND FLOOR, 3RD MAIN, 3RD CROSS, MALLESHPALYA, BANGALORE-560 075.
(RESPONDENT SERVED (ABSENT)) …RESPONDENT THIS CRIMINAL APPEAL IS FILED U/S 378(4) CR.P.C. TO SET ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 14.02.2018 PASSED BY THE LVIII ADDL.C.M.M., MAYOHALL UNIT, BENGALURU IN C.C. NO.53478/2016 – ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT.
THIS CRIMINAL APPEAL COMING ON FOR ADMISSION THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT R. DEVDAS J., (ORAL):
This criminal appeal is filed under Section 378 (4) of Code of Criminal Procedure assailing the judgment and order passed by the LXVIII Addl. Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru, in C.C.No.53478/2016, which was decided on 14.02.2018.
2. The appellant was the complainant before the Trial Court. It is the case of the appellant that he had lent a sum of Rs.8,00,000/- to the respondent being a co-worker at Hindustan Aeronautics Limited, Bangalore. It is stated that the respondent approached the appellant seeking a hand loan to meet the unexpected expenditure befallen on the respondent on his brother meeting with a road accident. It was contended by the appellant that he had given Rs.2,00,000/- to the respondent during January 2014, a sum of Rs.4,00,000/- on 11.03.2014 and another sum of Rs.2,00,000/- on 04.06.2014.
3. In order to substantiate that he had the resources with him, the appellant had produced copies of two sale deeds as Exs.P10 and P11. Ex.P10 is a sale deed dated 10.03.2014 whereby the appellant had sold a property to one Smt. Sudha M., for a sale consideration of Rs.6,00,000/-. Similarly by virtue of another sale deed Ex.P11 dated 10.03.2014 the appellant had sold another property for a sale consideration of Rs.6,60,000/-. Further, the appellant had produced bank statement marked as Ex.P13 in order to prove that at the relevant point of time, the appellant had the resources to lend a sum of Rs.8,00,000/- to the respondent.
4. The respondent had issued a cheque dated 08.02.2016 drawn on State Bank of India, H.A.L Branch, Bangalore for a sum of Rs.8,00,000/- which was marked as Ex.P1 in lieu of repayment of the debt. The cheque was returned with a shara ‘funds insufficient’. On a private complaint being lodged by the appellant in PCR No.52113/2016, the Magistrate took cognizance of the offence and thereafter issued process against the respondent-accused in C.C.No.53478/2016.
5. The learned Counsel for the appellant submits that inspite of the learned Magistrate coming to a conclusion that the documents of the appellant confirmed that the accused obtained hand loan of Rs.8,00,000/- and the respondent having admitted the same, on a wrong application of proposition of law that the parties being employees of Hindustan Aeronautics Limited were governed by Disciplinary Rules and therefore the appellant could not have lent huge amount of Rs.8,00,000/- without obtaining permission from the higher authority, proceeded to dismiss the petition filed by the appellant herein.
6. Learned Counsel for the appellant submits that in paragraph-16, the learned Magistrate has in fact held that on careful perusal of the documents of the complainant confirmed that the accused obtained hand loan of Rs.8,00,000/- from the complainant and DW1 admits the same. However, the learned Magistrate proceeds to raise a question as to whether the complainant and the accused could participate in personal loan transaction without permission from their higher authorities. The learned Counsel while referring to the impugned judgment and order points out that the learned Magistrate has wrongly applied the decision of the Hon’ble Supreme Court in the case of K.Subramani V/s K.Damodara Naidu reported in (2015) 1 SCC 99.
7. The learned Counsel submits that it was not the case of the respondent that the parties were governed by the Disciplinary Rules or Conduct Rules of HAL, since both of them are workmen. In this regard, the learned Counsel for the appellant has drawn the attention of this Court to the cross-examination of the respondent wherein he admits that the appellant and the respondent are workers in HAL and the Conduct or Disciplinary Rules were applicable only to Grade-I Officers and not to the workmen of HAL. The respondent has himself admitted that he too has not taken any permission from the higher authorities before securing a loan from the co-worker i.e, the appellant. Furthermore, the learned Counsel submits that the HAL CDA Rules, 1984, was produced as Ex.P15 before the Trial Court to prove that the HAL Conduct Disciplinary & Appeal Rules were not applicable to the parties before the Trial Court, while the same was applicable only to Officers of Grade-I and above in the Company.
8. The respondent has remained absent inspite of notice being served on him. Therefore, this Court has no other alternative than to proceed with the appeal.
9. Heard the learned Counsel for the appellant and perused the appeal memo and the lower Court records.
10. On a plain reading of the impugned order, it is clear that the learned Magistrate has proceeded on a footing that the parties being employees of Hindustan Aeronautics Limited, Bangalore, were governed by the Conduct and Disciplinary Rules and the parties having not obtained any permission from the higher authorities, could not have business transacted between each other and therefore proceeded to reject the petition filed by the appellant.
11. Ex.P15 HAL CDA Rules, 1984 was produced by the appellant herein before the trial court. The very first clause i.e., Clause 1.5.2.1 provides that the HAL Conduct, Disciplinary and Appeal Rules were introduced effective from September 1, 1984 and is applicable to all Officers in Grade-I and above of Company. On the other hand at Clause 1.5.3, it provides that the Government of India under the laws related to Industrial Relations (IR) had promulgated the Industrial Employment (Standing Orders) Act, 1946 and The Industrial Employment (Standing Orders) Rules, 1946. These are applicable to every Industrial establishment wherein 100 or more workmen are employed. It further provides that the main object of Certified Standing Orders is to require employers to define the conditions of work and to bring uniformity in terms and conditions of employment and also to maintain harmonious relations between the employer and the employees.
12. Article 309 of the Constitution of India provides that the Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of the State. The protection given to the persons under the services of the State under Article 311 of the Constitution do not apply to the workmen since they are governed by the Standing Orders of the Board and the provisions of the Industrial Disputes Act and such other related enactments provided in this regard.
13. The learned Magistrate has wrongly applied the provisions of the Conduct Rules of HAL which is applicable only to the Officers in Grade-I and above in the Company to the parties before the Court who are not Officers in Grade-I or above in the Company. Admittedly, both of them are workmen in the Company.
14. Moreover, in the considered opinion of this Court, the learned Magistrate has wrongly applied the decision in K.Subramani Vs. K.Damodara Naidu (supra), since in the said matter the dispute was linked to the source of income. On consideration of the oral and documentary evidence, the Trial Court therein had come to a conclusion that the complainant therein had no source of income to lend a sum of Rs.14,00,000/- to the accused and he failed to prove that there is legally recoverably debt payable by the accused to the complainant therein.
15. On the other hand, the learned Magistrate in the instant case has come to a conclusion that the oral and documentary evidence placed by the complainant was sufficient to come to a conclusion that he had lent a hand loan of a sum of Rs.8,00,000/- in three instalments on three occasions. Even otherwise, as rightly pointed out by the learned Counsel for the appellant, the parties had themselves deposed before the Trial Court that both of them were workmen and the HAL Conduct Rules were not applicable to them. Inspite of the said admission, even on the part of the respondent, the learned Magistrate has proceeded to apply the provisions of the HAL CDA Rules, 1984 to the parties which is totally erroneous.
16. Having considered the above aspects, this Court is of the opinion that the learned Magistrate could not have rejected the complaint merely on the ground that the appellant had not sought the permission of the higher authority to lend a loan to the respondent co- worker. In the opinion of this Court, even if it is a case that the Conduct Rules would apply to the parties, the learned Magistrate while dealing with the matter under Section 138 of the Negotiable Instruments Act, was required to find out whether the complainant had proof to show that he had lent money to the accused, whether he had source to lend money. It was not within the domain of the Magistrate to find out as to whether the complainant had sought permission from the higher authorities. Taking permission or not is a matter of disciplinary proceedings which could be initiated only by the disciplinary authority. The learned Magistrate while dealing with a matter under the Negotiable Instruments Act, is in no way concerned with the permission that was required to be taken from the higher authority, if the Conduct Rules would require such permission. Adherence to the disciplinary or Conduct Rules is an issue totally irrelevant for consideration of a criminal proceedings under Section 138 of Negotiable Instruments Act. Therefore, this Court proceeds to hold that the impugned order cannot be sustained for the reasons stated above.
17. In the light of the discussion hereinabove, the appeal is allowed and the judgment and order dated 14.02.2018 passed by the LVIII Addl. CMM, Mayo Hall Unit, Bengaluru, in C.C.No.53478/2016 is set aside. On the basis of the evidence of record this Court comes to a conclusion that the respondent-accused is liable to be convicted for offence punishable under Section 138 of the Negotiable Instruments Act. Consequently, the respondent-accused is sentenced to pay the fine amount of Rs.9,00,000/- out of which Rs.1,00,000/- shall be credited to the State as fine amount and a sum of Rs.8,00,000/- shall be paid to the complainant- appellant on proper identification and acknowledgement.
It is ordered accordingly.
Sd/- JUDGE JT/-