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.1858 OF 2016 BETWEEN SRI RAMESH B M S/O SRI K BHIMASAIN RAO AGED ABOUT 46 YEARS R/AT HOUSE NO 02, OPPOSITE MODEL LIC COLONY, WOC ROAD, BASAVESHWARANAGAR BANGALORE - 560079 AND (BY SRI A V AMARNATHAN, ADVOCATE) ...APPELLANT R JAGADESH S/O H RAGHAVENDRA RAO AGED ABOUT 40 YEARS R/AT NO 162, 2ND M AIN, MANJUNATH NAGAR ITTAMADU BANASHANKARI 3RD STAGE BANGALORE - 560085 (BY SRI H M GOPAL, ADVOCATE) …RESPONDENT THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF THE CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 16.09.2016 PASSED BY THE XXIII A.C.M.M., BANGALORE IN C.C.NO.16053/2013 – ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT.
THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT R.DEVDAS J., (ORAL):
The appellant/complainant has preferred this appeal under Section 378(4) of Cr.P.C. assailing the judgment of acquittal passed in C.C.No.16053/2013, dated 16.09.2016.
2. The offence involved is Section 138 of the Negotiable Instruments Act. It is the contention of the appellant that the respondent is a good friend of the appellant and they have known each other for several years. The appellant claims to be a business man and deals with real estate properties. It is the case of the appellant that he had lent a sum of Rs.10.00 lakhs from time to time to the respondent/accused. In this regard, the respondent/ accused is said to have executed a simple mortgage agreement on 05.10.2010 with respect to property bearing No.46 formed in Sy.No.15/1 situated at Ittamadu Village, Uttarahalli Hobli, Bengaluru South Taluk, measuring in all about 1335 sq.ft. It is stated in the mortgage agreement that the mortgagee has paid a sum of Rs.10.00 lakhs at the request of the mortgager and as a security the immoveable property is mortgaged to the mortgagee. Of course, the respondent has denied the execution of the mortgage agreement. Further, it is the case of the appellant that the respondent had issued four cheques to clear the loan amount along with interest. One of the cheque bearing No.836256 for a sum of Rs.2.00 lakhs is said to have been issued by the respondent on 15.12.2012 drawn on ING Vysya Bank Ltd., Malleshwaram Branch, Bengaluru. The said cheque was dishonoured with an endorsement “Account Closed”.
3. On receipt of the bank endorsement, the appellant got issued a legal notice to the respondent/accused on 10.01.2013. However, the notice returned unclaimed on 23.01.2013. Thereafter the appellant instituted a private complaint before the Magistrate.
4. Learned counsel for the appellant submits that the complaint filed by the appellant was rejected and the respondent was acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act, mainly on the ground that the appellant had not substantiated as to when he lent the money to the respondent; that the complainant was not able to substantiate that he had the financial capacity to lend a sum of Rs.10.00 lakhs to the respondent and another technical ground that the cheque dated 01.02.2013 was returned with an endorsement on 01.03.2013, while the complaint itself was instituted on 15.02.2013.
5. Learned counsel for the appellant submits that substantial material was placed before the learned Magistrate to show that the appellant had the financial capacity to lend a sum of Rs.10.00 lakhs to the respondent/accused. It is submitted that it was never the case of the appellant that entire sum of Rs.10.00 lakhs was given to the respondent on one particular day. It was the case of the appellant that the said sum was lent to the respondent from time to time, as and when a request was made by the respondent, for his legal necessities.
6. Learned counsel submits that since the complainant and the accused were close friends, the appellant has not noted down the details of the dates and the sum of money lent to the respondent. However, it is submitted that by virtue of the fact that the respondent/accused executed a sale deed dated 07.09.2011 shows that there were several transactions between the parties and by executing a sale deed dated 07.09.2011, the respondent, through his wife transferred another piece of property bearing site No.115 in Property No.51/2, V.P. Khatha No.232/1 situated at Choodasandra Village, Sarjapura Hobli, Anekal Taluk, Bengaluru Rural District measuring about 1200 sq. ft. It is contended that the entire sale consideration of Rs.2,28,000/- as shown in the sale deed was paid to the respondent’s wife at the time of the execution of the sale deed.
7. The learned counsel further submits that it was never the case of the respondent that the appellant did not have the financial capacity to pay a sum of Rs.10.00 lakhs. Moreover, it is submitted that the respondent/accused has admitted to have signed the cheques which belonged to the respondent and has handed over the same to the appellant herein. It was never the case of the respondent that the signature on the cheque was not his or that the cheque was stolen or secured by the appellant by coercion. It was therefore submitted by the learned counsel for the appellant that the presumption under Section 139 should go in favour of the appellant and the Trial Court erred in not drawing the presumption in favour of the appellant.
8. In this regard the learned counsel for the appellant places reliance on the judgment of the Hon’ble Apex Court in the case of Rohitbhai Jivanlal Patel /vs./ State of Gujarat and another reported in AIR 2019 SC 1876, while drawing the attention of this Court to paragraph No.19, 20 and 21, it was submitted that the Apex Court has held that the considerations and observations of the Trial Court is not in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the Negotiable Instruments Act. The learned counsel has also relied upon another decision of the Apex Court in the case of Basalingappa /vs./ Mudibasappa reported in AIR 2019 SC 1983, wherein it has been held that once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was in order to discharge any debt or liability.
9. On the other aspect of the matter where the trial court has observed that the bank endorsement at Ex.P2 was issued on 01.03.2013, while the complaint was lodged on 15.02.2013, the learned counsel submits that the date shown in the bank endorsement is in conformity with the International standards where the month is written first then the day and then the year. It is submitted that the bank endorsement was issued on 01.03.2013. The learned counsel pointed out to the cheque date that is shown in the same endorsement. Learned counsel submits that cheque was presented on 01.02.2013 and on the next day the endorsement was issued on 01.03.2013. It is therefore contended that the proper way of reading the dates is that the cheque was presented on 02.01.2013, while the same was returned on 03.01.2013 i.e., the next day. The learned counsel has further places reliance on a judgment of the Apex Court in the case of Bir Singh /vs./ Mukesh Kumar, reported in AIR 2019 SC 2446. It is submitted with reference to the said judgment that the presumption arising out of Section 139 is once again reiterated in the said decision.
10. Per contra, Learned counsel for the respondent/accused would submitted that no illegality could be found in the impugned judgment passed by the trial court. While taking this Court through the complaint and the evidence of the complainant-PW1, it was submitted that the complainant has made a vague statement that he had lent a sum of Rs.10.00 lakhs to the respondent. The learned counsel supports the finding of the trial court that the appellant failed to specify on what dates, what sum of money was lent to the respondent. In this regard, the learned counsel draws the attention of this Court to the simple mortgage agreement dated 05.10.2010 which was produced as Ex.P9 to substantiate his contention that the appellant in the said agreement states that a sum of Rs.10.00 lakhs was paid on the date of the agreement. Though the respondent has denied the execution of the mortgage agreement which is unregistered agreement, the learned counsel would place reliance on the recitals of the mortgage agreement. While drawing the attention of this Court to the cross-examination of the complainant-PW1 it was submitted that the complainant admits that the complainant lent a sum of Rs.2.00 lakhs to the respondent in the year 2012, another sum of Rs.2.00 lakhs during January, 2013 and sum of Rs.6.00 lakhs during the end of Februrary, 2013. It is the contention of the learned counsel for the respondent/accused that if it is the case of the complainant that he lent a sum of Rs.6.00 lakhs during the end of February, 2013, then the case of the complainant that the respondent issued a cheque dated 15.12.2012 for a sum of Rs.2.00 lakhs cannot be believed.
11. The learned counsel submits that true facts are that the respondent had borrowed a sum of Rs.4.00 lakhs from the complainant in the year 2010. When the respondent was unable to return the said amount, the respondent come forward to transfer one of his properties in favour of the complainant. In this regard, the absolute sale deed dated 07.09.2011 Ex.D1 was executed and registered in favour of the complainant to clear the entire loan. However, the cheques which were given by the respondent were not returned by the complainant on the excuse that since the immoveable property that was transferred in favour of the complainant was a revenue site, it was the apprehension of the complainant that he would need some security for some time and therefore he retained the cheques.
12. Heard the learned counsels for the appellant and respondent. Perused the appeal papers and lower court records.
13. The Trial Court has acquitted the respondent since according to the learned Magistrate the complainant was unable to place any material on record to substantiate his contention that he had the financial capacity to lend money to an extent of Rs.10.00 lakhs to the respondent/accused. On going through the records and on hearing the learned counsel for the respondent, it is clear that it was never the case of the respondent that the appellant did not have the financial capacity. The issue before the Magistrate was with respect to cheque for a sum of Rs.2.00 lakhs. The learned Magistrate has not looked into the material on record from the proper perspective. When the issue before the learned Magistrate was with respect to a cheque for a sum of Rs.2.00, the Magistrate should have confined his finding with respect to the issuance of the said cheque for a sum of Rs.2.00 lakhs.
14. As observed earlier, it was never the case of the respondent that he had not issued the cheque. As held by the Apex Court in the case of Basalingappa (supra) 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.
15. As noticed, in the present case, the acquaintance between the parties is not denied. The issuance of the cheque is not denied. When that being the position, no material or evidence is either produced by the accused nor has he pointed out from the material submitted by the complainant anything substantial to rebut the presumption or raised a probable defence. In that view of the matter, this court would not hesitate to hold that the finding recorded by the trial court on this aspect is perverse.
16. The other aspect of the matter where certain technicalities have been pointed out by the trial court is clearly demolished by the learned counsel for the appellant. As rightly pointed out by the learned counsel that the cheque dated 15.12.2012 was presented on 02.01.2013 and an endorsement from the bank was issued on 03.01.2013 that is the next day of the cheque being presented. The complaint was lodged on 15.02.2013. The standard adopted by the bank in showing the month first then the day and then the year has been substantiated by the learned counsel by pointing out the endorsement in the case. Therefore, it is clear that the technicalities pointed out by the trial court cannot be sustained.
17. The trial court has also made too much of the fact that the complainant did not substantiate as to when and what date he lent the money to the respondent. The trial court has also observed that the complainant has failed to substantiate on which date he presented the cheque for encashment. In this regard, the Apex Court in the case of Rohitbhai Jivanlal Patel (supra) has observed that such considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the Negotiable Instruments Act. It was held that the result of such presumption is that existence of legally enforceable debt is to be presumed in favour of the complainant. When such presumption is drawn, the fact relating to one of documentary evidence in the form of receipts or accounts or want of evidence as regards the source of fund were not of relevant consideration.
18. Finally, the submission of the learned counsel for the respondent was that the true fact was that the respondent had borrowed a sum of Rs.4.00 lakhs from the complainant in the year 2010. It was submitted that since the respondent was unable to repay the said sum along with interest, the sale deed dated 07.09.2011 was executed by the wife of the respondent in favour of the complainant in order to liquidate the entire amount due to the complainant. It was submitted that at the instance of the complainant the cheques were allowed to be retained in the hands of the complainant since the complainant expressed his apprehension that the property that was transferred in favour of the complainant was a revenue site and there may be some problems in future. The normal course of action in such circumstances was the borrower, while executing the document to satisfy the amount borrowed, would have taken back the cheques. Even otherwise, the respondent could have requested for an acknowledgement in writing from the complainant in that context. Even when a notice was issued by the complainant, the respondent could have raised such a contention by giving reply. It is under these circumstances, this Court would hold that the preponderance of probabilities go against the respondent.
19. For the reasons stated above, this court is of the considered opinion that the appeal filed by the complainant is required to be allowed and is accordingly allowed. The impugned judgment dated 16.09.2016 in C.C.No.16053/2013 is hereby set aside. Consequently the respondent is liable for punishment and accordingly a fine of Rs.2,10,000/- is directed to be paid by the respondent to the appellant. Out of the said amount a sum of Rs.10,000/- shall be defrayed to the expenses of the State. The balance of Rs.2.00 lakhs shall be payable to the appellant. In default, the respondent shall under go simple imprisonment for a period of six months.
Ordered accordingly.
SD/- JUDGE KLY/