IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF OCTOBER, 2019 BEFORE THE HON’BLE MR. JUSTICE B.A. PATIL CRIMINAL APPEAL NO.77/2019 BETWEEN:
Sri. Narase Gowda V.M., S/o Sri. Malleshaiah, Aged about 42 years, R/o No.1577, Maruthi Nilaya, 2nd Main, Judicial Layout, GKVK Post, Bengaluru -560 065. …Appellant (By Sri. Ananda V., Advocate for Sri. Jagadeesh Mundaragi, Advocate) AND Smt. N. Manjula, W/o. Kantharaj, Aged about 43 years, R/o. No.39, 1st Main Road, 5th Cross, II Stage, AGB Colony, Mahalakshmipuram, Bengaluru -560 086.
(By Sri. D.R. Ravishankar, Advocate –absent) …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 03.11.2018 passed by the XVIII Additional C.M.M. Bengaluru in C.C. No.9749/2016 –acquitting the respondent/accused for the offence punishable under Section 138 of N.I. Act.
This Criminal Appeal coming on for Admission, this day, the Court delivered the following:
JUDGMENT The present appeal has been preferred by the appellant/complainant being aggrieved by the judgment of acquittal passed by the learned XVIII Additional Chief Metropolitan Magistrate Court, Bengaluru in C.C. No.9749/2016 dated 03.11.2018.
2. I have heard the learned counsel for the appellant/complainant. Respondent and his counsel remained absent.
3. Though this case is listed for admission with the consent of learned counsel for the appellant, the same is taken up for final disposal.
4. The factual matrix of the case before the Court below are that the complainant and accused were known to each other and accused approached complainant for a sum of Rs.10,00,000/- (Rupees Ten Lakhs Only) for the purpose of taking house on lease and assured that she will deposit the original lease documents and she will repay the money within ten months. In pursuance of the said promise the complainant paid an amount of Rs.8,00,000/- (Rupees Eight Lakhs Only) to the accused. But the accused failed to handover the original lease documents and she also failed to repay the said amount. When the complainant demanded to repay the said amount, for which she issued a cheque dated 06.02.2016 drawn on Axis Bank ltd., Keers Plaza, Basaveshwara Nagar Branch bearing No.034978. When the said cheque was presented through his banker it was dishonoured with the shara “account closed” on 09.02.2016. Thereafter the complainant issued a legal notice on 18.02.2016 calling upon the accused to pay the amount under the cheque. Inspite of service of legal notice accused did not pay the said amount and as such the complaint was registered. Thereafter it took cognizance, secured the accused and recorded his plea. In order to prove the case of the complainant, complainant got examined himself as PW-1 and got marked Exs. P1 to P8. Thereafter the statement of accused under Section 313 of Cr.P.C. is recorded. Accused got examined the Bank Manager as DW-1 and got marked Ex.D1. After hearing the learned counsel appearing for the parties the impugned judgment of acquittal came to be passed. Challenging the legality and correctness of the impugned judgment the appellant/complainant is before this Court.
5. It is the submission of the learned counsel for the appellant that the impugned judgment is not sustainable in law and on facts. The trial Court without application of mind and without considering the decision of the Hon’ble Apex Court has gone on a wrong footing and has wrongly dismissed the complaint by acquitting the accused. He further submitted that the ingredients of Section 138 have been proved by the complainant. The said fact is also not been disputed by the accused. When once the accused admits that the cheque belongs to his account and accepts his signature then under such circumstances, the Court below ought to have been drawn the presumption as contemplated under Section 139 of Negotiable Instruments Act. He further submitted that the accused has not rebutted the said presumption either during the course of cross examination or by examining himself by stepping into the witness box. He further submitted that the evidence of DW-1 will not throw any light except the account has been closed in the year 2015. Without considering the documents produced, the trial Court has passed a wrong judgment. It is his further submission that the complainant/appellant is working as a material contractor and he also produced bank account extract for having withdrawn the amount. All these materials clearly goes to show that the complainant was having the capacity of paying the said amount. Without considering the facts and circumstances, the trial Court has wrongly dismissed the complaint. On these grounds he prayed to allow the appeal and set aside the impugned order and convict the accused for the alleged offence.
6. I have carefully and cautiously gone through the submissions made by the learned counsel for the appellant and perused the records including the lower Court records secured in this behalf.
7. It is not in dispute that the cheque in question belongs to the accused and subsequently when it was presented, it was dishonoured with the shara “account closed” and it has been returned on 09.02.2016 as per Ex.P2. It is also not in dispute that the notice has been issued as per Ex.P3 and the same has been served on the respondent/accused. When once the ingredients of Section 138 of Negotiable Instruments Act have been proved and if they have not been disputed by the accused and the signature on Ex.P1 has also not been denied then under such circumstances the Court below is duty bound to draw a presumption under Section 139 of Negotiable Instruments Act that there exists a legally enforceable debt or liability. This is of course in the nature of rebuttable presumption and it is open to the accused to raise a defence wherein existence of enforceable debt and liability can be contested. Keeping in view of the above said facts and circumstances on seeing the proposition of law which has been laid down by the Hon’ble Apex Court in the case of Rangappa Vs. Srimohan reported in (2010) 11 SCC 441 vide para 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 observation in Krishna Janardhan Bhat case reported in (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.”
Keeping in view of the decision laid down by the Hon’ble Apex Court, the factual matrix of the case taken, it goes to show that signature on cheque has not been denied by the accused and also issue of cheque. No doubt the accused has contested a case and cross examined as PW-1 and nowhere during the course of cross examination he has brought any records to rebut the said presumption.
8. This Court is conscious of the fact that it is not necessary for the accused to step into witness box to lead his evidence to rebut the said presumption. Even presumption can be rebutted by circumstantial evidence as well as by cross examining the complainant. Nothing has been elicited during the course of cross examination of PW-1 to rebut the said presumption. Though DW-1 Bank Manager was examined, he has only deposed that the account has been opened on 07.01.2010 and subsequently it was closed on 25.03.2015. That does not going to rebut the presumption raised under Section 139 of Negotiable Instruments Act. When once the cheque belongs to the accused and the account also is that of the accused and she has issued the cheque, that itself clearly goes to show that she was not having any intention to repay the amount which has been taken from the complainant. If really the account was closed on 25.03.2015 then under such circumstances, she could not have issued the cheque dated 06.02.2016. That itself goes to show that the accused has committed an offence under Section 138 of Negotiable Instruments Act and the provisions of the said Act are also made applicable in this behalf. When the presumption indicates that there exists a legally enforceable debt or liability, then under such circumstances, the trial Court ought not to have gone considered the fact of the capacity of the complainant to lend the said amount of Rs.8,00,000/- (Rupees Eight Lakhs Only).
9. Section 139 of Negotiable Instruments Act 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. Mere denial or rebuttal by the accused was not enough to rebut the said presumption. 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, para 18, 20 and 24 and 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.
When the Hon’ble Apex Court has clearly stated that the mere denial or a rebuttal by the accused was not enough but in the instant case on hand, the accused has not stepped into witness box and has not led any evidence nor given any reply to the notice given by the complainant. If really she has not availed the loan, then under such circumstances, immediately after receipt of the notice she could have replied by contending for what purpose the said cheque has been issued and how the said cheque has been issued to the complainant. In the absence of any such material it can be inferred that said cheque has been issued for the debt or liability which has been taken by the accused. All these aspects have been ignored by the trial Court and passed an erroneous judgment on different context by taking into consideration the complainant has to prove the source of income of the appellant for an amount of Rs.8,00,000/- (Rupees Eight Lakhs Only).
10 Keeping in view the above said facts and circumstances, I am of the opinion that the trial Court has erred in passing the impugned judgment without looking into the position of law and drawing wrong presumption as contemplated under Section 139 of Negotiable Instruments Act.
11. Keeping in view of the above said facts and circumstances, the appellant has made out a case and as such the appeal is allowed, the judgment passed by the XVIII Additional Chief Metropolitan Magistrate Court, Bengaluru in Crl.P.No.9749/2016 dated 03.11.2018 is set aside and the accused/respondent is convicted for the offence punishable under Section 138 of Negotiable Instruments Act and imposed a fine amount of Rs.10,00,000/- (Rupees Ten Lakhs Only) in default she has to undergo imprisonment for a period of two years. Out of the fine amount Rs.9,00,000/- (Rupees Nine Lakhs Only) shall be paid to the appellant/complainant and the remaining Rs.1,00,000/- (Rupees One Lakh Only) has to be credited to the Treasury to meet out the expenses of the Court.
Sd/- JUDGE BVK