IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF OCTOBER, 2019 BEFORE THE HON'BLE MR. JUSTICE H.P. SANDESH CRIMINAL APPEAL NO.2109 OF 2017 BETWEEN:
SRI. V.R. SHRESTI S/O. LATE NARAYANA SHRESTI AGE 59 YEARS (VARADA RAGHAVENDRA SHRESTI) BUSINESSMAN R/AT VIJAYANAGARA EXTENSION HARIHAR. ... APPELLANT (BY SRI. MOHAN KUMAR D., ADVOCATE) AND:
SHRI. BHASKAR P. S/O. P.V. CHADAGA AGE 49 YEARS PROPRIETOR SRI. GAYATHRI REFRESHMENT MAIN ROAD HARIHAR. ... RESPONDENT (BY SRI. N.S. SAMPANGI RAMAIAH, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CRIMINAL PROCEDURE CODE PRAYING TO SET ASIDE THE JUDGMENT DATED 08.11.2016 PASSED BY THE SENIOR CIVIL JUDGE AND J.M.F.C., HARIHARA IN C.C.NO.33/2016 – ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT.
THIS CRIMINAL APPEAL COMING ON FOR HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:
J U D G M E N T This appeal is filed against the judgment of acquittal passed in Criminal Case No.33 of 2016 dated 08.11.2016 on the file of Senior Civil Judge and J.M.F.C. at Harihar for the offence punishable under Section 138 of Negotiable Instruments Act.
2. Brief facts of the case:
It is the case of the appellant/complainant that himself and accused were known to each other. The accused was doing hotel business. The accused has requested a hand loan of Rs.4,50,000/- for his hotel business and accordingly, the complainant advanced Rs.4,50,000/- on 10.11.2006. The accused had agreed to repay the loan amount within two months with interest at the rate of 2% per month. Thereafter, towards repayment, the accused has issued a cheque for a sum of Rs.4,50,000/-. When the same was presented for encashment, the same was returned with an endorsement, ‘insufficient funds’. Hence, the complainant got issued the legal notice on 18.01.2007 calling upon the accused to pay the amount. Despite service of notice, he did not pay the amount and also did not give any reply. Hence, the complaint was filed.
3. The complainant, in order to substantiate his case, examined himself as P.W.1 and so also examined two witnesses as P.Ws.2 and 3 and got marked the documents as Exs.P1 to P8. The accused examined himself as D.W.1 and got marked the documents as Exs.D1 to D4. After closure of the evidence, the Court below has acquitted the accused. Hence, the present appeal is filed.
4. The contention of the appellant/complainant in the appeal is that the Court below has committed an error in not appreciating the evidence in a proper perspective and erroneously has come to the conclusion that he has not proved the transaction. The accused did not dispute the cheque and in the cross-examination also, he admitted the cheque and the Court below has failed to consider the same and committed an error in dismissing the complaint.
5. When this matter was listed yesterday, learned counsel for the respondent was absent. Hence, I have heard the arguments of learned counsel for the appellant. However, in order to provide an opportunity to the respondent, the matter was adjourned to today. Even today also, learned counsel for the respondent is absent. Hence, it is deemed that there is no arguments on behalf of the respondent.
6. Having heard the arguments of learned counsel for the appellant and also on perusal of the material available on record, the points that arise for consideration are:
1. Whether the Court below has committed an error in acquitting the accused for the offence punishable under Section 138 of Negotiable Instruments Act?
2. What order?
Point Nos.1 and 2:
7. The factual matrix of the case is that, the respondent/ accused has taken a hand loan of Rs.4,50,000/- from the complainant for his hotel business and he also agreed to repay the same with interest at the rate of 2% per month. However, he failed to repay the same with interest and hence, legal notice was issued. In spite of service of legal notice, the respondent/accused did not give any reply. Hence, the complaint was filed.
8. The complainant, in order to substantiate his case examined himself as P.W.1 and two other witnesses as P.Ws.2 and 3 and got marked Exs.P1 to P8. The complainant in his evidence reiterates that after the cheque was returned, a legal notice was issued in terms of Ex.P3 and the same was acknowledged by the accused in terms of Ex.P4. The notice was also sent through the Certificate of Posting in terms of Ex.P6. The complainant in his evidence reiterates the contents of the complaint. He was subjected to cross-examination.
In the cross-examination, it is elicited with regard to the earlier transaction between the complainant and the accused. It is elicited with regard to issuance of the notice earlier for non-payment of Rs.1,00,000/-. He also admits that while advancing an amount of Rs.1,00,000/-, he did not collect any document from the accused. It is suggested that, he has not advanced any amount in favour of the accused and hence, the question of repayment does not arise and the same was denied. It is suggested that the signature available on Ex.P1 not belongs to the accused and the same was denied. It is suggested that in collusion with the bank officials, he has obtained the endorsement and the same was denied. It is suggested that the signature of the accused was forged and created and the same was denied. It is suggested that there was a transaction between the accused and the complainant dated 28.05.2004 and he has obtained promissory note and other documents and based on those documents, he created Ex.P1 and the same was denied. He admits that he has not produced any document for having the source of income to advance the amount of Rs.4,50,000/-. He admits that in the cheque the accused has not included the interest amount and no document was produced in respect of the interest. It is also elicited that he has not produced any document to show that he was having the money to advance the amount. The Manager of the bank is also examined as P.W.2 with regard to the memo in terms of Ex.P2.
9. P.W.2 is a official of the bank. In the cross- examination of P.W.2, it is elicited that there is a difference in the signature in Ex.P1 and Ex.D4(a). He also admits that P.W.1 is also the account holder and he was doing the business from long back.
10. P.W.3 is an official of Canara Bank, who has produced the document as per Ex.P7.
In his cross-examination, it is elicited that based on Ex.P2, he has issued Ex.P7.
11. The accused, who has been examined as D.W.1 in his evidence states that himself and complainant were having acquaintance with each other. It is also his evidence that he used to make the complainant to sit in the cash counter of the hotel. He also states that complainant has given notice earlier demanding the payment of balance amount of Rs.1,24,000/- and thereafter, he has not taken any action against him. He also admits that complainant has issued notice against him when the cheque was returned. But he claims that when he received the notice, on the very same day, he visited the house of the complainant and told that he has not issued any cheque and not to misuse the cheque which might have been taken from the hotel, since he was allowing the complainant to sit in the cash counter of the hotel. He was subjected to cross-examination.
In the cross-examination, it is elicited that there are other criminal cases against him under Section 138 of Negotiable Instrument Act. It is suggested that both the complainant and accused have made financial transaction and the same was denied. It is suggested that he obtained a hand loan of Rs.4,50,000/- and agreed to repay the same within two months and the same was denied. However, he admits that complainant has given the notice stating that he did not repay the loan amount. He also admits that he has not given any reply to the said notice. He also admits that when galata took place in the year 2004 between himself and complainant, there was no difficulty for him to give notice to the complainant. It is suggested that since he has repaid the amount of Rs.1,00,000/-, no further action was taken against him and the witness replies that he has not taken any loan from the complainant. It is elicited from the mouth of D.W.1 that the cheque which was given by him to the complainant was returned with an endorsement ‘insufficient funds’. It is suggested that, he is falsely deposing that complainant has misused his cheque and the same was denied. He also admits that he did not give any complaint when the cheque was stolen by the complainant from 2007, till date.
12. Having considered both oral and documentary evidence available on record and also keeping in view the contention of learned counsel for the appellant/ complainant that the Court below did not consider the material available on record in proper perspective, this Court has to re-appreciate the evidence available on record. The case of the complainant is that he advanced a hand loan of Rs.4,50,000/- to the accused and accused denied the same.
13. It is important to note that, after the cheque was bounced, the complainant has given notice to the accused in terms of Ex.P3 and the same was served on the accused. The postal acknowledgment Ex.P4 confirms that notice was served on the accused and he did not choose to give any reply. But the contention of the accused throughout in his cross-examination is that, he did not issue the cheque Ex.P1 and the signature available in Ex.P1 is forged and created by the complainant. If really, the accused did not made any transaction with the complainant, he would have given reply to the notice, Ex.P3 immediately when he received the same. In spite of service of notice, he did not give any reply. If no such transaction has taken place between the complainant, he would have raised the defence that said cheque not belongs to him and the same has not been done.
14. It is also important to note that in the cross- examination of D.W.1, he categorically admits that when the cheque given by him to the complainant was presented for payment, the same was returned with an endorsement ‘insufficient funds’. When there is a clear admission on the part of the accused regarding returning of cheque given by him with an endorsement ‘insufficient funds’, the Trial Court ought not to have dismissed the complaint on the ground that the complainant has not proved his source for advancing a hand loan to the tune of Rs.4,50,000/-, no doubt in the cross-examination of P.W.1, it is elicited that he has not produced any proof with regard to the source for advancing such amount.
15. As already pointed out, the accused has not given any reply to the notice and also in the cross- examination, he categorically admits that the cheque has bounced on account of no sufficient fund in the bank account of the accused. Mere non-producing of the document before the Court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The accused ought to have rebutted the contention of the complainant by producing cogent evidence before the Court and mere denial is not enough. Hence, the Court below ought to have drawn the presumption against the accused that he did not give any reply to the legal notice, though admitted the returning of cheque. The very approach of the Trial Court is erroneous.
16. In the absence of rebuttal evidence under Section 138 of the Negotiable Instruments Act, the Trial Court ought to have convicted the accused for the offence punishable under Section 138 of Negotiable Instrument Act. Hence, I am of the opinion that the Court below has not appreciated the evidence available on record in a proper perspective. The Court below has failed to take note of the fact that it is not the case of the accused that he did not receive any legal notice. But his explanation in the evidence is that on the very same day, he went and told the complainant that he has not issued such cheque. Hence, the very defence cannot be accepted. Apart from that, in one breath, he states that he never transacted with the complainant. However, in the cross-examination of P.W.1 i.e., complainant, he himself got elicited that an amount of Rs.10,000/- and Rs.20,000/- was advanced to the accused on several occasions and it is not his case that such transaction was not made. On the other hand, he claims that there was transaction between the complainant and the accused and promissory note which was given by him earlier was misused. The accused cannot blow hot and cold in one breath that there was no transaction between the accused and complainant and in another breath that the promissory note which was given earlier by him was misused by the complainant. All these material evidence has not been considered by the Trial Court while acquitting the accused. Therefore, the same requires interference of this Court. Hence, it is a fit case to reverse the findings of the Trial Court and set aside the judgment of acquittal.
17. In view of the discussions made above, I pass the following:
ORDER (i) The appeal is allowed.
(ii) The impugned judgment of acquittal passed in Criminal Case No.33 of 2016 dated 08.11.2016 on the file of Senior Civil Judge and J.M.F.C. at Harihar for the offence punishable under Section 138 of Negotiable Instruments Act is set aside. The accused is directed to pay the amount of Rs.4,50,000/- with interest at 8% per annum from the date of institution of Criminal Case No.33 of 2016 till realization.
(iii) If the accused fails to pay the amount along with interest within eight weeks from today, he is sentenced to undergo simple imprisonment for a period of one year.
Sd/- JUDGE ST