HON'BLE SRI JUSTICE RAVI CHEEMALAPATI
CRIMINAL REVISION CASE No.959 of 2017
ORDER:-
This Criminal Revision case is filed under Sections 397 and
401 of Criminal Procedure Code (for short, 'Cr.P.C.'), assailing the
judgment dated 21.03.2017 passed in Criminal Appeal No.35 of
2016 by the learned VII Additional District and Sessions Judge,
Vijayawada, whereby and whereunder the judgment dated
28.01.2016 passed in C.C.No.674 of 2015 by the learned II Special
Magistrate, Vijayawada convicting the accused for the offence
punishable under Section 138 of the Negotiable Instruments Act,
was confirmed.
2. The Criminal Revision Petitioner was the accused and the
1st respondent was the complainant in C.C.No.674 of 2015. The trial
court convicted the accused and assailing the same he had
preferred Criminal appeal and the same having been dismissed, he
preferred this Criminal Revision Case.
3. For sake of convenience, the parties, hereinafter will be
referred to with their status in C.C.No.674 of 2015, i.e. to say the 1st
respondent herein will be referred to as, 'the complainant' and the
criminal revision petitioner will be referred to as, 'the accused'. 2
4. The complainant filed a complaint under Sections 190 and
200 of Cr.P.C. to punish the accused for the offence under Sections
138 and 142 of the Negotiable Instruments Act (for short, 'N.I.Act')
and to award compensation under section 357 of Cr.P.C. It is the
case of the complainant that, the accused borrowed Rs.12,00,000/-
from him on 25.11.2011 for his business expenses and evidencing
the same executed a promissory note agreeing to repay the debt
with interest at the rate of 24% p.a. Subsequently, the accused
issued a cheque dated 27.05.2013 for Rs.10,00,000/- towards
partial discharge of the debt due under the aforesaid promissory
note. When presented, the cheque was returned dishonoured with
an endorsement 'funds insufficient'. Pursuantly, the complainant got
issued a legal notice dated 15.06.2013 by registered post and
certificate of posting. The accused received the same, but he
neither replied nor paid the amount. Hence, the complainant filed
the complaint.
5. In response to the summons, the accused entered his
appearance and denied the contents of the complaint.
6. During the course of trial, to substantiate his case, the
complainant examined himself as P.W.1 and exhibited Exs.P1 to 3
P10. No evidence, either oral or documentary, is adduced by the
accused.
7. The trial Court, upon hearing both sides, having held that
the complainant had capacity to lend the amount covered under the
promissory note and that the complainant could prove that there is
legally enforceable debt and that the accused, who did not deny his
signature on Ex.P2 cheque, failed to discharge his burden under
Section 139 of the N.I.Act, found the accused guilty for the offence
punishable under Section 138 of the N.I.Act and sentenced him to
undergo simple imprisonment for six (06) months and pay
compensation of Rs.19,50,000/-.
8. Aggrieved thereby, the accused preferred Criminal Appeal
No.35 of 2016 contending that the trial Court failed to appreciate
the evidence on record in proper perspective and was misguided by
presumptions and surmises and the trial Court failed to consider
that on the date of Ex.P1 promissory note, the complainant had
bank balance of Rs.968-12 ps. and that Exs.P6 and P7 do not prove
the capacity of the complainant and they show that the complainant
had no savings on the relevant date of alleged lending and Form-16
do not show any other source of income for the complainant and 4
thus the trial Court grossly erred in coming to the conclusion that
the complainant has proved that there is legally enforceable debt.
Hence, prayed to allow the appeal.
9. The learned VII Additional District & Sessions Judge,
Vijayawada, upon hearing both the counsel and upon perusal of the
evidence and material available on record, dismissed the appeal
confirming the conviction and sentence imposed by the trial Court,
holding that the accused failed to raise a defence to rebut the
presumption under Section 139 of Negotiable Instruments Act.
10. Challenging the said judgment, the accused has preferred
this Criminal Revision Case.
11. Heard Sri J. Urganarasimha, learned counsel for the
revision petitioner, Sri A.K. Kishore Reddy, learned counsel for the
1st respondent/ complainant and Sri Sravan Kumar Naidana, learned
Special Assistant Public Prosecutor for the 2nd respondent-State.
12. Sri J.Urganarasima, learned counsel for the revision
petitioner, in elaboration, would submit that the Courts below erred
in not considering the defence of the accused that while he was
working as agent of the complainant, a blank cheque was obtained 5
and as he had discontinued his agency under the complainant, the
said blank cheque, which was not supported by consideration, was
pressed into service and thus there is no legally enforceable debt or
liability to be discharged by the accused.
The learned counsel would further submit that Ex.P10-bank
account statement reflects that there was a balance of Rs. 968-12
ps. on the date of the alleged transaction and the amounts
deposited into the said account are very meager. It is further
submitted that Exs.P6 to P9- Form No.16 of the complainant for the
financial years 2009-10 to 2013-14 clearly show that he has no
other source of income except his salary and as per Exs. P6 and P7
it was Rs.3,71,395/- per year during the relevant period of alleged
transaction. Thus, Ex.P10 coupled with Exs.P6 & P7 makes it
abundantly clear the complainant never had capacity to advance
huge amount and the Ex.P2 cheque was devoid of consideration
and the same was procured by him when the accused joined as an
agent under him and thus there is no legally enforceable debt or
liability. However, the Courts below, upon improper appreciation of
evidence, had come to the conclusion that Ex.P6 & Ex.P7 disclose
the financial capacity of the complainant.
6
The learned counsel has drawn the attention of this Court to
the evidence of the complainant that he was working as a Manager
in one of the insurance company and submitted that the trial Court
held that the complainant was also doing real estate business
besides being a Manager and came to the conclusion that the
complainant had sufficient source of income to lend the amount,
which is perverse and thus the Court while exercising revisional
jurisdiction can interfere with the concurrent findings of the Courts
below, since they were recorded upon improper appreciation of
evidence.
The learned counsel would further submit that non-institution
of suit basing on Ex.P1-promissory note gives out a clear indication
that Ex.P1 was a forged document and fearing that commission of
forgery would come to light, he avoided instituting a suit, but the
Courts below did not consider the same in right perspective.
The learned counsel would further submit that the accused
did not receive Ex.P3 legal notice and hence no reply was issued
and non-issuance of reply would not amount to admission of the
contents of the notice and moreover the complainant must prove
the guilt of the accused beyond all reasonable doubt. It is further 7
submitted that failure on the part of the accused in entering the
witness box and adducing any evidence on his behalf is of no
consequence and the accused can rely on the material produced by
the complainant and also on the inconsistencies brought out in the
evidence of the complainant in order to rebut the presumption.
In support of his contentions, he relied on Basalingappa vs.
Mudibasappa1 and K. Subramani v. K.Damodara Naidu2.
On the above grounds, the learned counsel for the revision
petitioner prayed to allow the Criminal Revision Case by setting
aside the judgment impugned.
13. On the other hand, Sri A.K.Kishore Reddy, the learned
counsel for the 1st respondent/ complainant, would submit that
since the accused had admitted issuance of cheque, the
presumption under sections 118 (a) and 139 of the Negotiable
Instruments Act would arise and the accused has failed to rebut the
said presumptions by raising a probable defence. It is further
submitted that, non-issuance of reply to the statutory notice got
issued by the complainant amounts to acquiescence of its contents
and had there been any truth in the theory propounded by him that 1 . (2019) 5 Supreme Court Cases 418 2 . (2015) 1 SCC (Crl.) 576 8
a blank cheque was given to the complainant at the time of his
joining as an agent under the complainant without there being any
financial transaction, the accused would have issued a reply to the
said effect. It is further submitted that, the accused did not enter
the witness box to substantiate his case and thus the accused had
failed to rebut the presumption and the Courts below having
analysed the oral and documentary evidence available on record in
right perspective rejected the defence put forth by the accused and
this Court while exercising revisional jurisdiction cannot interfere
with the concurrent findings of fact. Hence, prayed to dismiss the
Criminal Revision Case.
14. The learned Special Assistant Public Prosecutor supported
the impugned judgment and prayed to dismiss the Criminal Revision
Case.
15. The complainant has alleged that the accused, having
borrowed an amount of Rs.12,00,000/- on 25.11.2011 from him for
his business expenses, executed Ex.P-1 promissory note and
subsequently issued Ex.P-2 cheque towards partial discharge of the
debt borrowed under Ex.P1 and when presented, the said cheque
was returned dishonoured with an endorsement "funds insufficient" 9
and after getting a statutory notice issued under Ex.P-4, which was
received by the accused evidenced by Ex.P5-acknoweldgemnt, and
consequent to the failure of the accused in arranging the funds
within the time stipulated under the Negotiable Instruments Act, he
filed the complaint. To substantiate his contentions, the complainant
got himself examined as P.W.1 and got marked Ex.P1 to Ex.P10 and
deposed in tune with the contents of the complaint.
16. The accused did not get into the witness box nor did he
examine any witness on his behalf. From the suggestions put to the
complainant in cross-examination, the defence taken by the accused
is to the effect that the complainant had obtained blank cheques
from him when he worked as insurance agent under him and as he
stopped working under him, only to wreck vengeance against him
he pressed into service Ex.P2 cheque, which is devoid of
consideration and there is no legally enforceable liability on him to
be discharged and thus the complaint is liable to be dismissed.
17. The accused denied receipt of Ex.P4 registered notice.
However, Ex.P5 acknowledgment relied on by the complainant
shows that the residential address mentioned therein is identical to
the description given to the revision petitioner in this criminal 10
revision case and so also in the Criminal Appeal and in C.C.No.674
of 2015. Except bare denial, the accused did not take any steps to
disprove receipt of Ex.P4 notice by examining the postal authorities.
Thus, the contention advanced by the accused in this regard is not
true and correct.
18. In the decision in Basalingappa vs. Mudibasappa
relied on by the learned counsel for the revision petitioner, their
Lordships of Hon'ble Supreme Court while relying on various
pronouncements of the Hon'ble Supreme Court held that, it is the
well established principle of law that the prosecution must prove
guilt of the accused beyond all reasonable doubt, the standard of
proof so as to prove a defence on the part of the accused is
preponderance of probabilities. To rebut the presumption, it is open
for the accused to rely on evidence led by him or the accused can
also rely on the material submitted by the complainant in order to
raise a probable defence. Inference of preponderance of
probabilities can be drawn not only from the material brought on
record by the parties but also by reference to the circumstances
upon which they rely. It is not necessary for the accused to come
in the witness box in support of his defence, Section 139 imposes
an evidentiary burden and not a persuasive burden. 11
19. In view of the above settled principles of law, non
issuance of reply to Ex.P4 registered notice and failure on the part
of the accused to enter into the witness box to rebut the
presumption under Section 139 of the Negotiable Instruments Act
would be of no consequence. Thus, the contentions advanced by
the learned counsel for the 1st respondent/ complainant in this
regard are of no avail.
20. The thrust of the contention raised by the learned counsel
for the accused is that the complainant had obtained a blank
cheque from the accused when he joined as an insurance agent
under him and as the accused discontinued to work under him, he
foisted this false case and there is no legally enforceable debt or
liability to be discharged by the accused.
21. Regarding issuance of blank cheque, Section 20 of the
Negotiable Instruments Act envisages that a person who issues an
inchoate instrument thereby has given prima facie authority to the
receiver to make or complete the instrument.
22. During the course of the arguments, the learned counsel
for the accused though contended that the accused is denying his
signature on Ex.P2, the suggestion made to the complainant that 12
the complainant had obtained a blank cheque from him clearly goes
to show that the accused has admitted execution of Ex.P2 cheque.
It is also relevant here to note that except suggesting that there is
difference in the word 'a' and 'e' in Exs.P-1 and P-2, it is not at all
the specific defence of the accused that he did not sign Ex.P-2
cheque and it is a forged document. Therefore, it can be safely held
that the accused had admitted the execution of Ex.P2 cheque and
consequently the presumptions under Sections 118 (a) and 139 of
the Negotiable Instruments Act would arise which are to be effect
that Ex.P-2 cheque was made for consideration and it was issued
for discharge of the legally enforceable debt or liability, until the
contrary is proved.
23. It is relevant here to extract the observations of the
Hon'ble Supreme Court in Malkeet Singh Gill vs. The State of
Chhattisgarh3, regarding scope of appreciation of evidence by
revisional Courts while dealing with concurrent findings of conviction
arrived at by two Courts.
"Before adverting to the merits of the contentions, at the outset, it is apt to mention that there are concurrent findings of conviction arrived at by two Courts after detailed appreciation of the material and evidence brought on record. The High Court in criminal revision against conviction is not supposed to exercise
3 . Criminal Appeal No.915 of 2022 (arising out of SLP (Crl.) No.800 of 2021), dated 05.07.2022.
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the jurisdiction alike to the appellate Court and the scope of interference in revision is extremely narrow. Section 397 of Criminal Procedure Code ( in short 'CrPC') vests jurisdiction for the purpose of satisfying itself or himself as to the correctness, legality or propriety of any finding, sentence or order, recorded or passed, and as to the regularity of any proceedings of such inferior court. The object of the provision is to set right a patent defect or an error of jurisdiction of law. There has to be well- founded error which is to be determined on the merits of individual case. It is also well settled that while considering the same, the revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings."
24. Keeping in view the above observations, now the material
on record has to be scanned to find out whether the concurrent
finding of conviction suffers from any irregularity and impropriety
and needs interference of this Court while exercising revisional
jurisdiction.
25. As could be seen from the suggestions posed to the
complainant, the specific defence raised by the accused is with
regard to the financial capacity of the complainant to lend such a
huge amount.
26. In order to prove his financial capacity, the complainant
placed reliance on Ex.P6 to Ex.P9 i.e. his Form-16 for the financial
years 2009-10 to 2013-14 and Ex.P10-his bank account statement
from 01.01.2009 to 31.12.2014. No doubt, Ex.P10 bank account
statement discloses that the there was a balance of Rs.968-12 ps. 14
as on the date of the transaction in question. The learned counsel
for the petitioner laid much emphasis on this entry to contend that
the complainant had no financial capacity to lend such huge
amount.
27. There is no dispute regarding avocation of the
complainant as a Manager in an Insurance company. Form-16
discloses the yearly salary of the complainant during the financial
years 2009-10 was Rs.3,71,395/- and during the financial year
2011-12 was Rs.6,39,737/-. Taking into consideration of the fact
that the complainant was gainfully employed drawing a decent
salary, it can be safely concluded that the complainant had capacity
to lend the amount stated in Ex.P1-promissory note.
28. It is appropriate to mention here that the complainant has
no necessity to establish his financial capacity as per the decision in
M.Vidyavathi v. Chandraiah @ Chandrababu and another
(2000(1) ALT (Crl.) 347 A.P.)) and the relevant portion of the said
judgment is extracted hereunder:
"capacity to lend the amount is not an ingredient for the offence punishable under Section 138 of the Act."
15
29. It is curious enough to note that, the accused did not
offer any explanation as to how Ex.P1 promissory note came into
existence and except putting a suggestion to the complainant that
non filing of suit based on Ex.P1 makes it clear that it is a forged
document, he did not take any steps to prove that it is a forged
document. Mere non filing of suit would not lead to any inference
regarding forged nature of Ex.P1 promissory note.
30. Regarding non-disclosure of the amount lent under Ex.P1
in the Income Tax returns by P.W.1 is concerned, merely because
the amount advanced by a lendor was not shown in his income tax
returns the same would not disentitle him from recovering the
amount from his borrower. Non-disclosure of the amount may entail
consequences for the party acting in breach of Income Tax law such
as penalty and prosecution under the provisions of the Income Tax
Act, but, the borrower cannot get any advantage of it to say that
since the amount was not shown in the income tax returns he need
not pay. Thus, whether the complainant reflected the availability of
the amount lent in his income-tax returns, is not a matter of
concern for this Court and that would be an aspect to be considered
by the income-tax authorities.
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31. The next contention that advancement of loan in cash
over and above Rs.20,000/- is in violation of Section 269 SS of the
Income Tax Act and renders Ex.P2 cheque is unenforceable.
Payment of money in cash beyond Rs.20,000/- is a violation of
Section 269 SS of the Income Tax Act and breach of Section 269 SS
of the Income Tax Act provides penalty under Section 271D of the
Act. However, advancement of loan to the tune of Rs.12 lakhs in
cash is not prohibition in law and the same does not make any
transaction unenforceable. As stated above, the consequence of
breach would be imposition of penalty, but, the borrower cannot get
any advantage out of it.
32. In view of the above, the accused having admitted
issuance of Ex.P2 cheque to the complainant, failed to rebut the
presumption under Section 139 of the Negotiable Instruments Act
by placing any legally acceptable evidence to show that the said
cheque was devoid of consideration and it was only issued as a
security at the time of his joining as an agent under the
complainant. Therefore, this Court holds that the Courts below have
scanned the material available on record in right perspective and
had come to the right conclusion that the accused had issued Ex.P2
cheque for discharge of a legally enforceable debt covered under 17
Ex.P1-promissory note. This Court finds neither irregularity nor
impropriety in the impugned judgment and the same does not
require any interference of this Court. Thus, the criminal revision
case lacks merits and the same is liable to be dismissed.
33. Accordingly, the Criminal Revision Case is dismissed,
confirming the conviction and sentence passed by the Courts below.
As a sequel, all the pending miscellaneous applications are closed. Interim Orders, if any, shall stand vacated.
____________________________________ JUSTICE RAVI CHEEMALAPATI
Date : 01.12.2022 RR 18
HON'BLE SMT JUSTICE RAVI CHEEMALAPATI
CRIMINAL REVISION CASE No.959 of 2017
01.12.2022 U
RR
