IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF DECEMBER, 2019 BEFORE THE HON' BLE MR.JUSTICE R. DEVDAS CRIMINAL APPEAL NO.735/2018 BETWEEN M/S SONY PHARMACEUTICALS NO.3/1 3RD CROSS OBAIAH LAYOUT, COTTONPET BENGALURU-560 053 REPRESENTED BY KRISHNA MURTHY T S/O THULASIRAMAIAH AGED ABOUT 32 YEARS, R/AT NO.5 GROUND FLOOR T.S.R. LANE COTTONPET BENGALURU (BY SRI NAGARAJU, ADVOCATE) AND SRI NAGARAJ AGED MAJOR NADIGER PHARMA DISTRIBUTORS NO.14/231, 1ST CROSS 1ST MAIN GANDHINAGAR YELAHANKA BENGALURU AND ALSO NO.14/231 GROUND FLOOR CORNER BUILDING, OPP SRIRANGA PROVISIONS STORES NEAR VASAVI TEMPLE GANDHI NAGAR, BENGALURU (BY SRI H MANJUNATHA, ADVOCATE (ABSENT)) ...APPELLANT …RESPONDENT THIS CRIMINAL APPEAL IS FILED U/S 378(4) OF THE CR.P.C. PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT DATED 23/03/2018 PASSED BY THE XXV ADDL.C.M.M., BENGALURU IN C.C.NO.12812/2014 – ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT.
THIS CRIMINAL APPEAL COMING ON FOR FINAL HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT R. DEVDAS J., (ORAL):
The appellant is the complainant assailing the judgment of acquittal dated 23.03.2018 passed by the XXV Additional Chief Metropolitan Magistrate, Bengaluru, in C.C.No.12812/2014.
2. This matter had come up on 03.12.2019. The learned Counsel for the respondent was not present. Therefore, the matter was directed to be listed today for hearing. Today too, there is no representation for the respondent. Therefore the matter is heard in the absence of the learned Counsel for the respondent.
3. The appellant is in the business of distributing pharmaceuticals and respondent too is in the very same business. There are regular transactions between the parties. Learned Counsel for the appellant submits that the respondent has become a chronic defaulter in payment, having taken supply of drugs and pharmaceuticals from the appellant-firm. The respondent has issued several cheques for clearing the outstanding dues in respect of the supply of drugs and pharmaceuticals.
4. To support the contention of the learned Counsel, the learned Counsel has also placed a copy of the order of judgment and conviction in C.C.No.5668/2014 which was decided on 10.12.2018, subsequent to the judgment in question.
5. Learned Counsel for the appellant submits that inspite of the Trial Court being satisfied with the acquaintance between the parties, the Trial Court also being satisfied that there is no dispute with regard to the issuance of the cheques by the respondent-accused in favour of the complainant, however, since it was contended on behalf of the respondent-accused that there was also real estate transaction between the parties and the cheque was issued only as a security in respect of the other transaction and the accused was not liable to pay a sum of Rs.2,14,946/- as claimed by the appellant, the Trial Court has proceeded to acquit the respondent-accused.
6. Learned Counsel, while pointing out to the decision between the very same parties in C.C.No.5668/2014, submits that bills are raised and the respondent has issued cheques to clear the bills that are raised by the appellant-Firm. On the basis of the said documents and evidence, the learned Magistrate in C.C.No.5668/2014 has convicted the respondent and sentenced the respondent to pay fine of Rs.2,59,450/-. The learned Counsel submits that the details of the bills were given in the legal notice that was issued to the respondent. The Trial Court has noticed that since there were some discrepancies in mentioning the bill numbers, a subsequent rejoinder notice was also issued by the appellant correcting the number of the bills. That being the position, it is submitted that it was incumbent upon the learned Magistrate to draw the legal presumption as provided under Sections 118 and 139 of the Negotiable Instruments Act. It was only on the respondent leading rebuttal evidence that such a presumption could have been displaced by the respondent-accused. The learned Counsel submits that the respondent has not entered the witness box and the respondent has utterly failed to lead any such rebuttal evidence. In fact, no documentary evidence was submitted or relied upon by the respondent. Therefore, it is prayed that the impugned judgment be set aside and the order of conviction be passed against the respondent.
7. Heard the learned Counsel for the appellant and perused the appeal memo and the lower Court records.
8. As rightly pointed out by the learned Counsel for the appellant, the details of the bills that were raised by the appellant has been given in the legal notice and the rejoinder notice were sent by the appellant to the respondent. In this regard, it is beneficial to notice that the Hon’ble Apex Court in the case of Basalingappa Vs. Mudibasappa reported in AIR 2019 SC 1983 has held that when once the execution of cheque is admitted, Section 139 of the Act mandates the presumption that the cheque was issued for discharge of a debt or any liability. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. It has been held by the Apex Court that standard of proof for rebutting the presumption is that of preponderance of probabilities. It has also been held that to rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
9. In the instant case, what is noticeable is that there is no denial of the business transaction between the parties. The details of the bills that were raised by the appellant for clearance of which the cheques in question were issued by the respondent have been clearly mentioned by the appellant in the legal notice as well as the rejoinder notice.
10. If on the basis of the said evidence on record, if the respondent was able to rebut the presumption, only then the Trial Court could have called upon the appellant to produce any other material to substantiate its contention. No such rebuttal evidence was led by the respondent. Therefore, the Trial Court, in the opinion of this Court, has given too much credence to the submission of the respondent that the cheques were issued in respect of real estate business and not in the course of the pharmaceuticals business of the parties. The contention of the appellant is also fortified by the fact that under similar circumstances, between the very same parties, the learned Magistrate in C.C.No.5668/2014 has convicted the respondent and directed the respondent- accused to pay a fine of Rs.2,59,450/-.
11. The learned Counsel has also placed reliance on a decision of a co-ordinate Bench in the case of Hanumantha Raju Vs. Sri Shivakumar in Crl.A.No.356/2018 which was decided on 05.09.2019. In that case too, the Trial Court had acquitted the accused on the ground that no material was produced to show that the accused had taken loan and executed a demand Promissory Note. The co-ordinate Bench noticed that there is an admission of the signature of the accused on the cheque and that the cheque belonged to the account of the accused and therefore the legal presumption as contemplated under Section 139 of Negotiable Instruments Act was required to be drawn in favour of the complainant. The decision of the Trial Court in acquitting the accused was set aside. The co-ordinate Bench noticed the decision of the Hon’ble Apex Court in the case of Rangappa Vs. Sri Mohan reported in (2010) 11 SCC 441, wherein at paragraph-26 it is held as follows:
“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 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 circumstance 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.”
12. On the basis of the said judgment, it was held that when once the accused admits the signature on the cheque, the admission includes a presumption that there exists legally enforceable debt or liability on the accused. The presumption is rebuttable presumption by the accused and it is open to the accused to raise a defence wherein the existence of legally enforceable debt or liability could be contested and disposed or rebutted. It was held that the Trial Court without properly considering the said aspect has come to the conclusion that there is no legally recoverable debt or liability. This Court is in respectful agreement with the decision of the co-ordinate Bench.
13. In the light of the above, this Court is of the considered opinion that the impugned judgment is required to be set aside and accordingly the judgment and order dated 23.03.2018 passed by the XXV Additional Chief Metropolitan Magistrate, Bengaluru, in C.C.No.12812/2014 is set aside.
14. Accordingly, the appeal is allowed. The respondent is guilty of the offence under Section 138 of Negotiable Instruments Act and is therefore sentenced to pay a fine of Rs.2,24,946/-, out of which a sum of Rs.10,000/- is defrayed towards the expenses of the State. On failure of the respondent-accused to pay the fine amount, he shall be liable for punishment of simple imprisonment for a period of six months.
It is ordered accordingly.
Sd/- JUDGE JT/-