IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF JANUARY, 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY CRIMINAL APPEAL No.652 OF 2010 BETWEEN:
Vishwapal Chits Pvt. Ltd., #8, I Floor, Gopal Complex, Nagarthpet, Bengaluru-2, Represented by its Managing Director, P.J.Krishna Murthy.
(By Sri. G.M.Sharath Kumar, Advocate for Sri. G.S.Prasanna Kumar, Advocate) AND:
C. Thayabaran S/o. Chinnadoraiah, Bapujinagar Post Office, Bapujinagar, Mysuru Road, Bengaluru-560 026.
...Appellant ...Respondent (By Sri. Narasimharaju, Advocate) This Criminal Appeal is filed under Section 378(4) of Cr.P.C praying to set aside the impugned judgment dated:10.02.2010 passed by the XIX Addl. CMM, Bengaluru in C.C.No.20822/07 – acquitting the respondent/accused for the offence punishable under Section 138 of N.I.Act.
This Appeal coming on for Hearing, this day, the Court delivered the following:
JUDGMENT The present appellant as a complainant had instituted a private complaint against the present respondent in the Court of the XIX Additional Chief Metropolitan Magistrate, Bengaluru City (henceforth for brevity referred to as “trial Court”) for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
2. The trial Court, by its judgment dated 10.02.2010, acquitted the accused / respondent for the alleged offence. Aggrieved by the same, the complainant has preferred this appeal.
3. In support of his complaint, the complainant got examined one Sri.T.Shankar Reddy as PW1 and through him got marked documents as Exs.P1 to P4(c) which also included the alleged returned cheque at Ex.P1, Bank’s endorsement at Ex.P3, Office copy of notice at Ex.P4 and the postal acknowledgement at Ex.P4(c). The accused got himself examined as DW1 and got produced ten documents as Exs.D1 to D10 which includes two notices said to have been sent by the same complainant at Exs.D1 and D2 and eight receipts at Exs.D3 to D10.
4. Learned counsel for the appellant / complainant in his argument submitted that the entire judgment of the trial Court is erroneous for the reason that the trial Court proceeded on the notion that the burden of proving legally enforceable debt is solely and exclusively on the part of the complainant, thus depriving the complainant the benefit of presumption under Section 139 of the Negotiable Instruments Act. He further submitted that from the documents produced by the parties including Exs.D1 and D2, go to show that the accused was the defaulter in the repayment of the prized amount of the chit, as such, the cheque in question was issued by him. Thus, it establishes the existence of legally enforceable debt also.
5. Learned counsel for the accused / respondent in his argument submitted that the documents at Exs.D1 and D2 compared with a similar legal notice at Ex.P4 clearly go to show that all the four legal notices were with respect to the very same cheque transaction. If a particular sum was claimed as due, then with respect to the very same chit transaction, there cannot be another liability and issuance of cheques by the accused, as such, the judgment under appeal does not warrant any interference at the hands of this Court.
6. It is not in dispute that the complainant was running a chit, wherein the present respondent / accused was a subscriber in chit group No.1 LCU/21 for a sum of `1,00,000/-. Further, contention of the complainant that the accused being a subscriber to the said chit, had become a prized subscriber in the third month transaction on 24.05.2003 after foregoing a discount of `28,250/- is also not in dispute. The said fact apart from having remained undisputed has been corroborated by the very same document produced by the accused as Exs.D1 and D2 which are the earlier legal notices sent by the complainant to the very same accused and the contents of which having not been denied or disputed by the accused.
7. According to the complainant, the accused being a prized subscriber and having taken the prized chit amount foregoing the discount was required to continue to pay the chit amount at the rate of `4,000/- per month for the remaining period. However, he had committed default. It is in that regard, when his due was a sum of `87,945/-, the accused got issued a cheque on 09.04.2007 for a sum of `85,000/- which got dishonoured when presented for realisation with the Banker’s endorsement “insufficient funds”. In that regard, a legal notice as per Ex.P4 issued to the accused, evinced no response from him, as such the same constrained the complainant to institute the complaint for the offence punishable under Section 138 of the Negotiable Instruments Act.
8. The complainant as PW1 has reiterated these statements even in his examination-in-chief also. In his cross examination, the accused suggested his defence that he had given five cheques as security to the complainant and the cheque in question is one among them. However, the said suggestion was not admitted as true by PW1. Therefore, the defence that the cheque in question was issued as a security to the accused was confined only to a mere suggestion made to PW1 which has remained unadmitted by him.
9. The accused as DW1 reiterated his defence in his examination-in-chief. He was subjected to a detailed cross examination, wherein he has admitted that he was a Central Government Employee and aware of worldly affairs including the knowledge that a legal notice is required to be replied and when a loan is cleared, a writing in that regard, or else, a receipt in that regard are required to be obtained or taken.
10. Admittedly, in the case on hand, even though the accused claims to have issued the cheque in question as a security cheque, but he has not produced any document in that regard. The said suggestion made from the accused side having not been admitted as true by the complainant, the said mere suggestion would not give any advantage to the accused. On the other hand, the undisputed fact that the accused was a subscriber to the chit being run by the complainant and that he was also a prized subscriber as depicted in legal notices at Exs.P4, D1 and D2 go to show that there was monetary transaction between the complainant and the accused.
11. When the accused has maintained the earlier legal notices said to have been received by him from the very same complainant and got the same produced and marked as Exs.D1 and D2, nothing had prevented him from producing any document to show that he has cleared the entire chit amount claimed to be due to the complainant which was also, earlier a part of the demand made in Exs.D1 and D2. Incidentally, Exs.D1 and D2 are the two legal notices with respect to the very same chit transaction, but, in connection with dishonour of other cheques said to have been issued by the very same accused.
12. Even according to the accused, Exs.D3 to D10 are stated to be the receipts and are not the clearance of the entire alleged due amount towards the complainant. PW1 in his cross examination, after admitting that Exs.D3 to D10 are the receipts issued by the complainant had stated that the said amount comes around `31,000/- or `32,000/-. However, he has maintained that as on the date of demand, the total liability due to the complainant establishment by the accused was a sum of `87,945/-.
13. Learned counsel for the accused / respondent in his argument vehemently submitted that since the legal notice at Ex.D1, a copy of which is at Ex.D2 pertains to the very same chit transaction which is mentioned in the legal notice under consideration which is at Ex.P4 would go to show that there was no due from the accused and that with respect to the same chit, earlier also legal notices were given.
Though the said argument of learned counsel for the accused, prima facie appears to be having some point to consider, it cannot be ignored of the fact that the very same complainant earlier also demanded the repayment of the chit amount by the very same accused by issuing legal notices at Exs.D1 and D2. Had really, the accused cleared those liability, nothing had prevented him from producing any document to show that he has cleared the entire chit amount that was demanded under the legal notices under Exs.D1 and D2. Moreover, nothing had prevented the accused to putforth to PW1 in his cross examination about the defence that is now being canvassed that, with respect to the very same chit transaction and in response to Exs.D1 and D2, the chit liability had already been cleared in its entirety by the accused. But, not even a whisper in that regard has been made by the accused in the cross examination of PW1.
14. On the contrary, as already observed above, in the cross examination of DW1, the accused himself has admitted that he being a Central Government Employee, is aware of the worldly affairs and got knowledge that whenever loan amount is cleared, a receipt is required to be obtained. Thus, the accused being a person having the required knowledge about maintaining the records has failed to maintain any document to show that he has cleared the chit amount.
15. Secondly, it cannot be ignored of the fact that inspite of receiving a notice at Ex.P4, the accused has not bothered to respond to it. Had really the accused cleared the loan amount, nothing had prevented him from replying to the legal notice at Ex.P4 and bringing to the notice of the complainant that despite clearance of the alleged chit due amount, the complainant was withholding the cheque wrongfully.
16. Thirdly, the accused has not taken any step to get back the alleged cheque which was remaining with the complainant. In that regard, even after claiming to have cleared the cheque amount, he has not bothered to take necessary action for securing the return of the cheque that was said to be lying with the complainant. In that regard, he has not even sent any letter to the complainant stating that he has wrongfully withholding the cheque in question.
17. Lastly, the accused had also not given any “stop payment” direction to its Banker stating that the cheque was wrongly withheld by the complainant. Thus, the contention of the accused that he has cleared the chit due amount and that the complainant had misused the cheque that was left out with him has only remained as a point in the argument bereft of any supporting material in that regard.
18. On the other hand the complainant has produced the cheque in question which is at Ex.P1, the execution of which by the accused is not in dispute. Admittedly, the said cheque has been dishonoured with a reason “insufficient funds” as could be seen from the Banker’s endorsement at Ex.P3. The complainant thereafter has issued a legal notice to the accused as per Ex.P4, since the same did not evince any reply, he has instituted a complaint. However, the Court below ignoring these aspects has proceeded on a notion that the burden of proving the existence of legally enforceable debt is solely on the shoulder of the complainant. However, it ignored the operation of presumption about legally enforceable debt in favour of the complainant under Section 139 of N.I.Act.
19. The Hon’ble Apex Court in the case of Rangappa Vs. Sri Mohan reported in (2010) 11 SCC 441 had also held that once the issuance of the cheque by the accused is established, the legal presumption under Section 139 of the Negotiable Instruments Act operates in favour of the complainant. However, the said presumption is rebuttable.
20. In the case on hand, since the issuance of cheque in question by the accused in favour of the complainant is established, the presumption of legally enforceable debt operates in favour of the complainant. In view of the discussions made above, the accused has failed to rebut the said presumption operating in favour of the complainant, as such, the impugned judgment under appeal deserves to be set-aside and it has to be held that the complainant has proved beyond reasonable doubt that the accused has committed an offence punishable under Section 138 of the Negotiable Instruments Act. Accordingly, I proceed to pass the following;
ORDER The Appeal stands allowed. The judgment of acquittal dated 10.02.2010, passed by the learned XIX Additional Chief Metropolitan Magistrate, Benagluru City in C.C.No.20822/2007 is set-aside. The respondent/accused by name – C.Thayabaran, S/o Chinna Doraiah, Bapujinagar post office, Bapujinagar, Mysuru Road, Bengaluru- 560 026 is convicted for the offence punishable under Section 138 of N.I.Act.
Heard the learned counsel from both side on sentence part.
While the learned counsel for the appellant/ complainant submits for awarding maximum sentence for the offence for which the respondent/accused is convicted, the learned counsel for the respondent/accused submitting that accused is retired Central Government Employee and that he has cleared the loan, however, the same could not be established by him, prays for taking a lenient view.
It is the sentencing policy that the sentence ordered should not be either exorbitant nor for name sake for the proven guilt. It must be proportionate to the guilt for which the accused is found guilty of.
Considering the facts and circumstances of the case, the accused is sentenced to pay a fine of `95,000/- (Rupees Ninety five Thousand only) within four weeks from today, and in case of default of payment of fine, to undergo a simple imprisonment for a period of six months. In case of payment of fine amount, a sum of `85,000/- (Rupees Eighty five thousand only) be paid to the complainant and remaining sum of `10,000/- (Rupees Ten Thousand only) be taken to the account of the State.
The Registry is directed to transmit a copy of this judgment to the trial Court forthwith, to enable it to proceed further in the matter for issuance of warrant of conviction, if necessary and proceed in accordance with law.
An entire copy of this judgment also be delivered to the respondent/accused, immediately free of cost.
Sd/- JUDGE GH