IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8TH DAY OF JANUARY 2021
BEFORE
THE HON'BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY
CRIMINAL REVISION PETITION No.1265 OF 2011
BETWEEN:
G.C.V. Shastry @
G.C. Veerabhadrappa
S/o. Chandrashekharaiah,
Cloth Merchant,
Aged about 42 years,
Srinidhi Fashions
Near Banni Mahakali Temple,
Rampura, Molakalmuru Taluk,
Chitradurga District.
.. Petitioner
(By Sri. Nandish Patil, Advocate)
AND:
M/s. Guru Finance Corporation (Reg)
By its Managing Partner,
Sri.M.V. Prabhu,
S/o. M. Veerabhadraiah,
Age: 19 years, R/o. Kailash Complex,
Behind BDO Office, Chitradurga Road,
Challakere Town.
.. Respondent
(By Sri. B.M. Siddappa, Advocate)
Crl.R.P.No.1265/2011
2
****
This Criminal Revision Petition is filed under Sections 397
read with 401 of Cr.P.C. praying to call for the records and allow
and set aside the judgment of the learned Additional Sessions
Judge (Fast Tract Court), Chitradurga in Cr.A.No.59/2010 dated
20-10-2011 and also the judgment of conviction and sentence
passed by the learned Civil Judge and JMFC, Challakere in
C.C.No.341/2007 dated 03-07-2010 as illegal and consequently
acquit the accused/petitioner of the offence punishable under
Section 138 of the Negotiable Instruments Act, 1881 and to grant
such other relief as this Court deems fit to pass in the facts and
circumstances of the case.
This Criminal Revision Petition coming on for Hearing,
through Physical Hearing/Video Conferencing Hearing this
day, the Court made the following:
ORDER
The present petitioner as the accused was tried by the Court of the learned Civil Judge & J.M.F.C, Challakere (hereinafter for brevity referred to as the "Trial Court") in C.C.No.341/2007 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as the "N.I. Act") and was convicted for the said offence by its judgment of conviction and order on sentence dated 03-07-2010.
Aggrieved by the same, the accused preferred a Criminal Appeal in the Court of the learned Additional Sessions Judge, (Fast Crl.R.P.No.1265/2011 3 Track Court), Chitradurga (hereinafter for brevity referred to as the "Sessions Judge's Court") in Criminal Appeal No.59/2010.
The appeal was contested by the respondent who was the complainant in the Trial Court. The Sessions Judge's Court in its order dated 20-10-2011 dismissed the appeal, confirming the judgment of conviction and order on sentence passed by the Trial Court dated 03-07-2010 in C.C.No.341/2007. Aggrieved by the said order, the accused has preferred this revision petition.
2. The summary of the case of the complainant in the Trial Court is that, the complainant is a registered Finance Corporation doing money lending business under a valid licence issued as per the Karnataka Co-operative Societies Act, 1959 and the Karnataka Money Lenders Act, 1961. On 16-08-2006, the accused borrowed loan of a sum of `4,75,000/- from it for his business necessities by agreeing to repay the said amount on 30-11-2006. In that connection, the accused had given a cheque bearing No.868912 for a sum of `4,75,000/- on 30-11-2006 drawn on Indian Overseas Bank Limited, Rampura Branch, Molakalmuru Taluk. When the said cheque was presented by the complainant, the same came to be Crl.R.P.No.1265/2011 4 dis-honoured with the Banker's endorsement 'funds insufficient'. Thereafter, the complainant issued a legal notice through his Advocate upon the accused on 19-02-2007, calling upon him to pay the cheque amount. The accused refused to receive the said notice and also did not pay the cheque amount, which constrained the complainant to institute the complaint for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as the "N.I. Act").
3. The respondent appeared in the Trial Court and contested the matter.
4. After recording the evidence led from both side, the Trial Court by its judgment of conviction and order on sentence dated 03-07-2010 convicted the accused for the offence punishable under Section 138 of the N.I. Act and sentenced him to undergo Simple Imprisonment for six months and also to pay a fine of `4,75,000/-, in default, to undergo Simple Imprisonment for a period of six months.
Challenging the said judgment of conviction, the accused preferred a criminal appeal in Criminal Appeal No.59/2010 in the Crl.R.P.No.1265/2011 5 Court of the learned Sessions Judge's Court, which also by its judgment dated 20-10-2011, dismissed the appeal filed by the appellant, however, it modified the sentence of fine holding the accused as liable to pay a fine of `5,000/- and to pay cheque amount of `4,75,000/- to the complainant. Aggrieved by the judgments of conviction and order on sentence, the accused has preferred this revision petition.
5. The respondent herein is being represented by his counsel.
6. The Trial Court and Sessions Judge's Court's records were called for and the same are placed before this Court.
7. Heard the arguments from both side. Perused the materials placed before this Court including the Trial Court and Sessions Judge's Court's records.
8. For the sake of convenience, the parties would be henceforth referred to as per their rankings before the Trial Court.
9. After hearing the learned counsels for the parties, the only point that arise for my consideration in this revision petition is:
Crl.R.P.No.1265/2011 6 Whether the judgments under revision are perverse, illegal and erroneous warranting interference at the hands of this Court?
10. Learned counsel for the petitioner in his argument submitted that the complainant has not proved its financial capacity to lend money to the accused. The fact that the complainant has not claimed any interest on the alleged loan would go to show that the loan transaction was a sham transaction. He further submitted that the alleged business loan which was for a short period of fifteen days is unbelievable because of its short duration. Learned counsel for petitioner submitted that no property was secured by the complainant as security for the alleged loan, as such, the genuinity of the loan is highly suspectable. Lastly, he submitted that both the Trial Court and the Sessions Judge's Court have not considered the defence taken up by the accused that ten blank signed cheques were earlier given by the accused to the complainant about seven years back when he had availed another loan and that the complainant has misused one among those cheques, which is the subject matter of the present case.
Crl.R.P.No.1265/2011 7
11. Per contra, learned counsel for the complainant appearing through video conference in his very brief argument submitted that the alleged financial incapacity has not at all been raised either in the Trial Court or in the first appellate Court and it is for the first time, that too, only in the arguments, the said point is being canvassed, as such, the same does not require any attention by this revisional Court. He also submits that the complainant is a registered Financial Institution doing money lending business and had filed returns with the competent authorities which also goes to show that it has financial capacity to lend money to the accused. He states that the presumption under Section 139 of the N.I. Act operates in favour of the complainant which has not been convincingly rebutted by the accused.
12. The acquaintance between the parties is not in dispute. The complainant, as PW-1, in his evidence has stated that, the accused had acquaintance with him since about twenty years prior to the last transaction which has not been denied by the accused. Similarly, the accused who examined himself as DW-1, in his cross- examination also has admitted that the complainant was known to Crl.R.P.No.1265/2011 8 him since about fifteen years prior to the alleged loan transaction. Furthermore, the details of the previous avocation said to have been pursued by the accused has also been brought out in the cross-examination of DW-1 and these aspects clearly go to show that the complainant and the accused were known to each other since a long time of not less than about fifteen years prior to the date of the alleged loan transaction. Further it is also not in dispute that the complainant is a registered Partnership Firm doing money lending business which it claims, is doing after obtaining necessary licence by the competent authorities. Though the accused in his Examination-in-chief as DW-1 has generally denied the entire loan transaction including the alleged issuance of cheque said to be belonging to him at Ex.P-1, the alleged loan transaction and the alleged non-repayment of the loan and the alleged dis-honour of the cheque and subsequent issuance of legal notice by the complainant to the accused, however, learned counsel for the petitioner in the opening submission of his argument fairly concedes that he would not dispute that the cheque at Ex.P1 pertains to the accused and it bears his signature also. He also fairly submitted Crl.R.P.No.1265/2011 9 that he would admit that the said cheque was presented by the complainant for its payment and the same came to be dishonored for the reason of insufficiency of funds in the drawer's bank account, in which regard, the Banker has issued an endorsement as per Ex.P-3. He also submits that a legal notice as per Ex.P-4 was issued to the accused, however, he fairly concedes that the accused has not sent any reply to the said notice. However, learned counsel for the accused/petitioner submits that his main and only contention is that there existed no legally enforceable debt, as such, the question of the accused issuing the cheque at Ex.P-1 to the complainant does not arise. He reiterates that the accused has taken a specific defence in the Trial Court that the said cheque was given by the accused to the complainant some where in the year 1999-2000 along with another undated blank signed cheque which has been mis-used by the complainant.
13. When the cheque at Ex.P-1 is admittedly issued by the accused with his signature therein and when that signed cheque has been presented by the complainant for its payment and the same came to be dis-honoured for the reason of insufficiency of Crl.R.P.No.1265/2011 10 funds and also when the complainant has admittedly issued a legal notice as per Ex.P-4, calling upon the accused to pay the said cheque amount, and when the accused has failed to meet the demand made in the legal notice, a presumption under Section 139 of the N.I. Act forms in favour of the complainant. However, the said presumption is rebuttable. Therefore, the aspect to be considered is, whether the accused could able to rebut the said legal presumption thus shifting the onus back upon the accused to prove the alleged loan transaction. It is in that regard he had taken a defence that ten blank duly signed cheques were issued to the complainant as long back as in 1999-2000 and the present cheque is one of those ten cheques that has been misused by the complainant. Interestingly, no such specific contention has been taken by the accused at the earliest point of time. Had it been the case of the accused that he had issued ten blank signed cheques in the year 1999-2000 to the complainant duly putting his signature therein, then, nothing had prevented the accused to take appropriate action in recovering Crl.R.P.No.1265/2011 11 those cheques from the alleged possession of the complainant. Admittedly, the accused has not taken any steps in that regard.
In that connection, in the cross-examination of DW-1, a specific question was asked as to whether the accused has taken any steps to recover the alleged blank cheques from the alleged custody of the complainant, for which DW-1 (accused) has answered in the negative. That means, the accused who claims to know the worldly affairs and claims to be doing business in flowers earlier and also a cloth merchant has not bothered to make any effort in recovering the alleged cheques from the alleged custody of the complainant for not less than about six to seven years.
14. Secondly, admittedly, the accused has not given any stop payment instruction to his banker till the said cheque was presented by the complainant for its realisation and even in that connection also, an answer has been elicited in the cross- examination of DW-1 that, the accused has not intimated his Banker about those unused cheques by him and requested it to stop the payment of the said cheques. In such a situation, the burden would be solely upon the accused to show that he had Crl.R.P.No.1265/2011 12 issued those cheques only as a security towards the alleged previous loan transactions and that the complainant has misused those cheques.
In that connection, the very evidence of DW-1 himself gives an answer to the same. The said accused as DW-1 in his first leg of his evidence in Examination-in-chief has stated that he has not availed the loan of `4,75,000/- from the complainant and has not issued the cheque, however, the complainant has misused the cheques given to it about six to seven years back as a security. The said defence was taken by the accused for the first time in his Examination-in-chief recorded on 12-02-2009.
On the other hand, the very same witness in his further Examination-in-chief recorded on 18-04-2009 on his own in the form of an affidavit evidence has categorically and specifically stated that when he requested the Managing Partner of the complainant - Sri. M.V. Prabhu for a loan on 07-07-2006, the said Sri. Prabhu put a condition that, they would give loan provided the accused gives him the advance cheques. Therefore, he (accused) gave him cheques bearing Sl.Nos.868911 to 868920, which is the Crl.R.P.No.1265/2011 13 entire cheque book duly signed on 08-07-2006. That means, the very accused himself voluntarily in his further Examination-in-chief has stated that he approached the complainant for a loan on 07-07-2006 and had delivered ten blank signed cheques on the very next day, i.e. on 08-07-2006. This evidence of DW-1 is contrary to his own earlier evidence which is mentioned above. Therefore, the accused himself was not clear in his defence as to when the alleged signed blank cheques were given, on the other hand, he has admitted that he had approached the complainant for a loan on 07-07-2006. Even according to the complainant, the loan was given to the accused on 16-08-2006, few days after the accused (DW-1) approached him for a loan.
15. Thirdly, the accused, as DW-1, both in his Examination- in-chief dated 12-02-2009 and his further Examination-in-chief dated 18-04-2009, on his own, has stated that with respect to he giving ten blank cheques duly signed to the complainant, he has mentioned in a document and has obtained the signature of the complainant by its Managing Partner on the said document. Though DW-1(accused) has stated the same at more than one Crl.R.P.No.1265/2011 14 place in his Examination-in-chief, but he has not produced any piece of paper to show that he has obtained the signature on any such document from the complainant in that regard.
16. Fourthly, even though the accused as DW-1 in his Examination-in-chief has taken a contention that he had issued those cheques as a security, but, nowhere he has given any details as to when and as against which particular loan transaction and for how much amount of loan alleged to have been availed by him, he had issued those cheques as security. He has not even stated that those cheques were issued as a security towards a loan. He has only stated that the cheques were issued as a security. He has not mentioned as to security is provided for what purpose. Therefore, the very defence taken by the accused though at a belated stage in the Trial Court, still remains with lot of lacunas in it and he could not even able to give a clear shape to his alleged defence.
On the other hand, the complainant, represented by its Managing Partner, apart from stating that the accused had approached him for a loan of `4,75,000/-, in his detailed cross- examination has given several details of how his finance business Crl.R.P.No.1265/2011 15 was being run by the firm and which are the documents they used to maintain and how and under which hope, the loan was given to the accused. He has also produced certain documents including a document shown to be accounts of the accused' ledger extract in Form No.5 at Ex.P-8, P-9 and P-13 respectively.
17. Learned counsel for the petitioner/accused also contended in his argument that there was no financial capacity for the complainant to lend money. The said contention had not specifically been taken by the accused at the earliest point of time. No where in the cross-examination of PW-1, any suggestion was made to the witness specifically and clearly suggesting to the witness that the complainant firm had no financial capacity to lend money. On the other hand, several details were elicited from PW-1 to the effect that, even though they did not have sufficient Bank balance or funds with them, some how the firm makes adjustments in pooling out the fund and lend the money.
Further, the learned counsel for the petitioner/accused also contended that the document produced by him at Exs.D-4 and D-5 which are the account extracts of the complainant firm would go to Crl.R.P.No.1265/2011 16 show that it had no financial capacity to lend money. A perusal of those two documents would go to show that those two documents are the Bank Account statements of the complainant firm for a particular period. No doubt the said Bank balance reflected in those two statements does not cross three digits, however, the evidence of PW-1 particularly his cross-examination reveals that, PW-1 has specifically and clearly stated that for lending `4,75,000/- to the accused, the firm did not drew any amount from the Bank, but it collected the money available in cash register as a balance in cash on hand and it has made some adjustments from other sources and the loan was paid in cash to the accused. The said statement in the form of explanation regarding the source of the loan given by PW-1 is not further been specifically denied or disputed from the accused' side. Therefore, the first and the main argument of the learned counsel for the petitioner/accused that the complainant had no financial capacity to lend money is not acceptable.
18. The argument of the learned counsel for the petitioner that, the non-claiming of interest and the very short duration of the Crl.R.P.No.1265/2011 17 loan amount also raises a doubt about the genuinity of the loan transaction, is also not acceptable for the reason that, the complaint is filed under Section 138 of the N.I. Act which can be confined only to the cheque amount. Even according to the complainant firm, the loan amount of `4,75,000/- was repaid to it through a cheque in question at Ex.P-1. Therefore, it is not the case of the complainant also that the cheque amount is the entire amount of liability towards it by the accused. Moreover, it is not mandatory that a loan must necessarily be repaid with interest. No suggestions were made in that regard by PW-1 in his cross- examination and no answers are elicited from the other witnesses. Therefore, the Court cannot presume that in the absence of demand for any interest upon the alleged loan, the alleged loan itself is suspicious or doubtful, that too, particularly, in the absence of any other circumstances compelling the Court to draw such an inference.
Similarly, the duration of the loan is also not necessarily an important aspect. When the business can run within a shortest period like in the number of days, it is not expected that a business loan must run into a long duration or must be for a longer period.
Crl.R.P.No.1265/2011 18 Even on this aspect also, neither any answers or reaction were elicited from the complainant in his cross-examination as PW-1 nor DW-1 has anywhere whispered in his evidence. Therefore, the said argument of the learned counsel for the petitioner/accused is also not acceptable.
19. All these facts clearly go to prove that the complainant has proved the alleged guilt punishable under Section 138 of the N.I. Act against the accused.
20. Even though the Trial Court and the Sessions Judge's Court have not discussed these aspects in detail, but they have given a finding that the complainant has proved that the accused has committed an offence punishable under Section 138 of the N.I. Act. No doubt, the learned Sessions Judge's Court, at some places in its impugned judgment has observed that the loan availed by the accused is an admitted fact, when in fact there is no such admission from the accused' side, however, such a passing observation made by the learned Sessions Judge's Court has not led it to give a wrong finding in its conclusion. Therefore, I do not find any reasons to interfere in the finding of both the Trial Court as well Crl.R.P.No.1265/2011 19 as the Sessions Judge's Court's judgment of convicting the accused for the alleged offence punishable under Section 138 of the N.I. Act.
21. However, so far as the order on sentence passed by both Courts are concerned, it has to be seen that a sentence must be proportionate to the gravity of the proven guilt. In the instant case, the Courts have sentenced the accused to undergo Simple Imprisonment for a period of six months and also to pay a total sum of `4,75,000/- as fine.
Considering the nature of the proven guilt against the accused and the facts and circumstances of the present case, I am of the considered view that the sentence of imprisonment imposed by the Trial Court to an extent of six months is on the higher side and the same requires to be reduced, maintaining the sentence to pay fine intact. It is only to that limited extent, the intervention of this Court is warranted.
Accordingly, I proceed to pass the following:-
ORDER [i] The Criminal Revision Petition is allowed-in-part;
Crl.R.P.No.1265/2011 20 [ii] While confirming the judgment of conviction of the present petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, and imposing total fine of `4,75,000/- as an amount payable to the complainant and another sum of `5,000/- towards the State as it is, the order on the sentence of imprisonment alone is modified, reducing the sentence of imprisonment from six months to two months Simple Imprisonment.
[iii] Rest of the terms of the order of sentence remains without any modification.
In view of disposal of the main petition, I.A.No.1/2015 does not survive for consideration and is accordingly, disposed of.
Registry to transmit a copy of this order to both the Trial Court as also the Sessions Judge's Court along with their respective records forthwith.
Sd/-
JUDGE BMV*