Madhav Shankar Revankar vs Nagaraj Irkal,
2021 Latest Caselaw 1868 Kant

         IN THE HIGH COURT OF KARNATAKA
                 DHARWAD BENCH

         DATED THIS THE 5th DAY OF APRIL 2021

                       BEFORE

           THE HON'BLE MRS.JUSTICE M.G.UMA

           CRIMINAL APPEAL NO.2703/2011

BETWEEN:

MADHAV S/O.SHANKAR REVANKAR,
AGED-51 YEARS, OCC-BUSINESS,
PROPRIETOR,
UMASHANKAR AUTO FUELS,
T.S.S. ROAD, SIRSI,
DIST.N.K.
                                          ...APPELLANT
(BY SRI.VISHWANATH HEGDE, ADVOCATE)

AND:

NAGARAJ IRKAL,
AGED ABOUT 44 YEARS,
OCC-BUSINESS,
R/O.BASTIGALLI,
SIRSI, DIST-N.K.
                                         ...RESPONDENT
(SERVED-UNREPRESENTED)


     THIS CRIMINAL APPEAL IS FILED UNDER SECTION 397
READ WITH SECTION 401 OF CR.P.C. SEEKING TO SET ASIDE
THE JUDGMENT DATED 10.01.20211 PASSED BY THE FAST
TRACK COURT, SIRSI IN CRIMINAL APPEAL NO.73/2009
ALLOWING THE APPEAL THEREBY SETTING ASIDE THE
JUDGMENT OF CONVICTION PASSED IN CRIMINAL CASE
NO.328/2007 AND CONSEQUENTLY THE RESPONDENT BE
CONVICTED FOR THE OFFENCE PUNISHABLE UNDER SECTION
138 OF THE NEGOTIABLE INSTRUMENTS ACT RESTORING
THE JUDGMENT AND SENTENCE OF THE TRIAL COURT.
                                                     Crl.A.No.2703/11
                                2


     THIS CRIMINAL APPEAL COMING ON FOR FINAL
HEARING THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
                          JUDGMENT

The appellant herein is the complainant before the

learned II Additional Judicial Magistrate at Sirsi (hereinafter

referred to as 'Trial Court' for the sake of brevity) is assailing

the impugned Judgment of acquittal dated 10.01.2011 passed

in Criminal Appeal No.73/2009 on the file of the Fast Track

Court of Sirsi (hereinafter referred to as the 'Appellate Court'

for the sake of brevity), whereunder the respondent/accused

is acquitted for the offence punishable under Section 138 of

the Negotiable Instruments Act, (hereinafter referred to as

'the N.I.Act' for the sake of brevity) by setting aside the

Judgment of conviction and order of sentence dated

07.05.2009 passed in Criminal Case No.328/2007 by the Trial

Court convicting the accused for the said offence sentencing

him to undergo simple imprisonment for a period of 3 months

and to pay fine of Rs.3,000/- and in default to pay fine

undergo simple imprisonment for a period of one month for

the offence punishable under Section 138 of the N.I.Act.

Crl.A.No.2703/11

2. Brief facts of the case are that, the appellant

herein as complainant filed the Private Complaint in PCR

No.80/2006 before the Trial Court against the accused

alleging commission of the offence punishable under Section

138 of the N.I.Act. It is stated that the complainant is the

owner of the Petrol Bunk named as 'Uma Shankar Auto Fuels'.

The accused was running a transport business and he used to

purchase diesel for his trucks from the complainant. Thus, the

accused purchased fuel worth Rs.15,000/-. Complainant

demanded payment of the amount and the accused issued the

cheque dated 13.12.2005 for Rs.15,000/- drawn on

Basaveshwar Co-operative Credit Society Limited, Sirsi (for

short the 'Society') infavour of the Uma Shankar Auto Fuels,

Sirsi, of which the complainant is the Proprietor. The said

cheque was presented for encashment, but the same was

dishonoured as there was 'insufficient fund' in the account of

the accused. The complainant issued legal notice informing

the accused regarding dishonour of the cheque and calling

upon him to pay the cheque amount. But the legal notice was

returned as 'not claimed'. The accused has not claimed the

notice knowing fully well that the cheque in question is Crl.A.No.2703/11

dishonoured and he has committed the offence punishable

under Section 138 of the N.I.Act. Thus, the complainant

requested the Trial Court to take cognizance of the offence

and to summon the accused.

3. The Trial Court took cognizance of the offence

against the accused and registered Criminal Case

No.328/2007 against the accused for the offence punishable

under Section 138 of the N.I.Act. The accused appeared

before the Trial Court and pleaded not guilty for the said

offence. The complainant examined himself as PW.1 and got

marked Exs.P1 to P5 in support of his contention. The accused

denied all the incriminating materials available on record in

his statement recorded under Section 313 of Cr.P.C. and

examined himself as DW-1 and got marked Exs.D1 to D3 in

support of his contention. The Trial Court after taking into

consideration all these materials on record, came to the

conclusion that the complainant is successful in proving the

guilt of the accused for the offence punishable under Section

138 of the N.I. Act and proceeded to convict and sentence

him as stated above.

Crl.A.No.2703/11

4. Being aggrieved by the Judgment of conviction

and order of sentence passed by the Trial Court, the accused

has preferred Criminal Appeal No.73/2009 before the

Appellate Court. The Appellate Court after taking into

consideration all these materials on record, came to the

conclusion that the complainant has not proved the guilt of

the accused beyond reasonable doubt and therefore allowed

the appeal and set aside the impugned Judgment of

conviction and order of sentence passed by the Trial Court.

Being aggrieved by the acquittal of the accused, the

complainant as appellant is impugning the Judgment of

acquittal.

5. Heard Sri Vishwanath Hegde, learned counsel for

the appellant. The respondent/accused remained un-

represented inspite of service of notice.

6. Learned counsel for the appellant submitted that

it is the specific contention of the complainant before the Trial

Court that he is the Proprietor of the concern by name 'Uma

Shankar Auto Fuels', Sirsi, which is dealing in petroleum

products and accused who was running the transport

business, purchased diesel for his trucks and to discharge his Crl.A.No.2703/11

dues of Rs.15,000/-, the cheque-Ex.P.1 was issued by the

accused, which came to be dishonored, as there was

insufficient funds in the account of the accused. Even though,

the legal notice was issued, same was not claimed by the

accused nor he has paid the cheque amount, thereby the

accused committed the offence punishable under Section 138

of the N.I. Act. The complainant examined himself as P.W.1

and got marked Ex.Ps.1 to 5 before the Trial Court. The Trial

Court properly appreciated the materials on record and

convicted the accused for the above said offence. However,

the Appellate Court proceeded to acquit the accused on flimsy

ground. The finding of the Appellate Court that the

complainant ought to have been filed in the name of 'Uma

Shankar Auto Fuels', Sirsi represented by its Proprietor or any

other responsible person, is erroneous. The finding given by

the Appellate Court that there is inherent defect in the

complaint, is also not sustainable.

7. Learned counsel for the appellant relied on the

decision in the case of Shankar Finance and Investments

vs. State of Andhra Pradesh and Others1 in support of his

(2008) 8 SCC 536 Crl.A.No.2703/11

contention that the proprietary concern could be represented

by its Proprietor and that he can maintain the complaint

against the accused for the offence punishable under Section

138 of the N.I. Act. Accordingly, he prays for setting aside the

impugned Judgment of acquittal passed by the Appellate

Court in the interest of justice by restoring the Judgment of

conviction and order of sentence passed by the Trial Court.

8. In view of the submissions made by the learned

counsel for appellant and on perusal of the materials on

record, the point that would arise for my consideration is:

"Whether the impugned judgment of acquittal passed by the Appellant Court calls for any interference and needs to be set aside by restoring the Judgment of conviction and order of sentence passed by the Trial Court?"

My answer to the above point is in 'Affirmative' for the

following:

REASONS

9. It is the specific contention of the complainant

that he is running a Proprietary concern, under the name and

style as 'Uma Shankar Auto Fuels', Sirsi and the accused used

to purchase diesel for his trucks. When the accused purchased Crl.A.No.2703/11

diesel worth Rs.15,000/-, the complainant demanded for

making payment and accused issued cheque-Ex.P.1 in

discharge of his liability. On presentation of the said cheque

for encashment, the same was dishonored as there was

'insufficient fund' in the account of the accused. Even though,

the legal notice got issued by the complainant calling upon the

accused to pay the cheque amount, he never claimed the

notice nor he has repaid the cheque amount. Thereby the

accused has committed the offence punishable under Section

138 of the N.I.Act.

10. When the accused has appeared before the Court

and pleaded not guilty for the offence alleged against him, the

complainant examined himself as P.W.1 after filing his

affidavit in lieu of examination-in-chief and reiterating his

contentions as taken in the complaint. During cross-

examination, it is suggested to the witness that he is not

running a Petrol Bunk at all and the accused is not having any

transport business and he never purchased diesel from the

complainant. The tenor of cross-examination of P.W.1

discloses that the accused admitted his signature found on the

Ex.P.1. But contended that the figures and the date on the Crl.A.No.2703/11

cheque were written by the complainant without permission of

the accused and thereby the cheque in question is tampered.

11. Ex.P.1 is the cheque dated 13.12.2005 drawn

infavour of 'Uma Shankar Auto Fuels, Sirsi' for Rs.15,000/-.

Ex.P.2 is the memo dated 06.03.2003, issued by the Society

to the Manager of Canara Bank, Sirsi, returning the cheque in

question, as there is 'insufficient fund' in the account of the

drawer i.e., the accused. Ex.P.3 is the copy of the legal notice

got issued by the complainant to the accused calling upon him

to pay the cheque amount. Ex.P.4 is the postal envelope

addressed to the accused returned to the sender as it was 'not

claimed'. Ex.P.4(a) is the notice found in the postal

envelope(Ex.P.4). Ex.P.5 is the Private Complaint filed by the

complainant in PCR.No.80/2006 before the Trial Court.

12. The accused after denying the incriminating

materials available on record in his statement recorded under

Section 313 of Cr.P.C. filed his affidavit in lieu of examination-

in-chief and stated that he is not having knowledge about the

complainant being the owner of a Petrol Bunk. All the

contentions taken by the complainant with regard to issuance Crl.A.No.2703/11

of the cheque and dishonour of the same and also issuance of

the legal notice and return of the legal notice as not claimed,

are all denied. It is contended that Ex.P.1 is not at all a

cheque but it is only a withdrawal slip. Therefore, Section 138

of the N.I.Act is not attracted. It is contended that he has not

purchased petrol/diesel from the complainant. It is stated that

he had not instructed his lorry drivers to purchase petrol from

the complainant. Complainant contended that he had taken

Ex.P.1 from the Society for his personal use; he had kept it in

his pocket after signing the same. The said document was

taken by the complainant and it was filled by him without

permission of the accused. The accused is further examined

as D.W.1. During the cross-examination, witness categorically

admitted that he is running a transport business. But denied

the suggestion, complainant is running a Petrol Bunk and he

had purchased diesel worth of Rs.15,000/-. Witness stated

that Ex.P.1 belongs to his account with the Society, but stated

that it is a withdrawal slip and not a cheque. Witness

categorically admitted that Ex.P.1(a) is his signature. Witness

denied that any legal notice was tendered to him. However, Crl.A.No.2703/11

he admitted that the summons issued to him to the same

address is served on him.

13. Ex.D.1 is the copy of the Election Identity Card

issued in the name of the accused. Ex.D.2 is the copy of the

registration certificate standing in the name of the accused

and Ex.D.3 is the copy of the Insurance Certificate issued by

the National Insurance Company Limited.

14. These materials were considered in the light of the

contention taken by the learned counsel for the appellant and

the impugned Judgment of acquittal passed by the appellate

Court. The materials placed before the Court disclose that

Ex.P.1 is the cheque bearing No.03051 dated 13.12.2005

drawn infavour of 'Uma Shankar Auto Fuels, Sirsi' for

Rs.15,000/- and drawn on Society. The accused categorically

admitted that, Ex.P.1(a) is his signature.

15. It is contended by the accused by filing of the

affidavit in lieu of examination-in-chief contended that Ex.P.1

is not at all a cheque, but it is a withdrawal slip. There is

absolutely no reason for the accused to contend so.

Admittedly, Ex.P.1 is not dishonored by the Society on that Crl.A.No.2703/11

ground. On the other hand, Ex.P.2 is the memo issued by the

Society dishonoring the cheque in question, as there is

'insufficient fund' in the account of the accused. Therefore,

contention of the accused that it is not a cheque, but it is only

a withdrawal slip, cannot be acceptable.

16. During cross-examination of the P.W.1, the learned

counsel for the accused contended that the accused is not

running the transportation business at all, but when D.W.1

was in the witness box, he categorically admitted that he is

running a transport business. But however, he denied that he

purchased diesel or petrol from the Petrol Bunk belonging to

the complainant.

17. It is pertinent to note that the accused

categorically admitted his signature found on Ex.P.1 and

stated that he had kept Ex.P.1 duly signed in his pocket and

the complainant had taken it and filled the figures and other

details without his permission. But strangely there is no such

cross-examination to P.W.1, when he was in the witness-box.

Therefore, it is clear that accused is taking contradictory stand

while defending the case. There is no explanation by the Crl.A.No.2703/11

accused as to how the complainant came in possession of

Ex.P1, which was kept by the accused in his pocket.

Admittedly, no complaint is lodged against the complainant in

that regard, nor the accused instructed his Banker to stop

payment of the cheque. Even, if it is the contention of the

accused that he had issued the blank cheque-Ex.P.1 infavour

of the complainant, the presumption under Sections 118 and

139 of the N.I.Act operates against the accused and the

burden is on the accused to prove that Ex.P.1 was not issued

towards legally recoverable debt. In this regard, I place my

reliance on the decision of Hon'ble Apex Court in the case of

M/S. Kalamani Tex and Another vs. P.Balasubramanian

in Criminal Appeal No.123/2021, wherein the Hon'ble

Apex Court discussed of length and reiterated the position of

law with reference to its earlier decisions on the subject and

held as under:

"14. ...........The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has Crl.A.No.2703/11

been crystalised by this Court in Rohitbhai Jivanlal

Patel v. State of Gujarat in the following words:

"In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused...."

15. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant-Respondent to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to patent error of law.

(2019) 18 SCC 106, Crl.A.No.2703/11

16. No doubt, and as correctly argued by senior counsel for the appellants, the presumptions raised under Section 118 and Section 139 are rebuttable in nature. As held in MS Narayana Menon v. State of Kerela3, which was relied upon in Basalingappa v. Mudibasapp4, a probable defence needs to be raised, which must meet the standard of "preponderance of probability", and not mere possibility. These principles were also affirmed in the case of Kumar Exports v. Sharma Carpets5 wherein it was further held that a bare denial of passing of consideration would not aid the case of accused.

17............

18. Even if we take the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite Bir Singh v. Mukesh Kumar6, where this court held that:

"Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."

(Emphasis supplied)

(2006) 6 SCC 39

(2019) 5 SCC 418

(2009) 2 SCC 513

(2019) 4 SCC 197 Crl.A.No.2703/11

18. Thus, the position of law is very well settled. If the

facts and circumstances of the present case is taken into

consideration in the light of this settled position of law, it is

clear that the accused categorically admitted that Ex.P.1

cheque belongs to his account with the Society and he also

admits his signature found therein, the presumption under

Section 139 of the N.I.Act operates but the accused has not

discharged his burden to rebut the legal presumption. Even

though he examined himself as DW1, he has not probabalised

his defence.

19. The Trial Court after taking into consideration the

materials on record convicted the accused for the offence

punishable under Section 138 of the N.I.Act. But however, the

Appellate Court acquitted the accused on the sole ground that

the complainant ought to have been filed in the name of 'Uma

Shankar Auto Fuels, Sirsi' represented by its Proprietor or any

other responsible person and since that is not done, there is

inherent defect in the complaint which is not noticed by the

Trial Court and hence, the impugned Judgment of conviction

suffers from legal lacuna.

Crl.A.No.2703/11

20. Ex.P.5 is the Private Complaint filed by the

complainant before the Trial Court, wherein the complainant

has categorically stated that he is the owner of the Petrol

Bunk under the name and style as 'Uma Shankar Auto Fuels',

Sirsi. The complainant filed his affidavit in lieu of examination-

in-chief and reiterated that he is the Proprietor of the Petrol

Bunk-'Uma Shankar Auto Fuels'. It is suggested to the

complainant during cross-examination that he is not having

valid license to run the Petrol Bunk and he is not running

Petrol Bunk at all.

21. It is pertinent to note that the accused never

disputed the authority of the complainant to represent - 'Uma

Shankar Auto Fuels, Sirsi'. The accused has not raised any

contention to contend that 'Uma Shankar Auto Fuels' is not a

proprietary concern. He has never contended that either it is a

partnership firm or a Company and it is not represented

properly. As I have already stated that complainant

specifically contended that he is the Proprietor of the

proprietary concern-'Uma Shankar Auto Fuels, Sirsi' and he

filed the complaint as the Proprietor of the proprietary

concern. However, the Appellate Court proceeded to allow the Crl.A.No.2703/11

appeal on the sole ground that the complainant is not properly

represented before the Trial Court.

22. The Hon'ble Apex Court in Shankar Finance

Investments (supra) had an occasion to discuss about the

requirements under Section 142(1)(a) of the N.I. Act and held

as under:

"9. Section 142(a) of the Act requires that no court shall take cognizance of any offence punishable under Section 138 except upon a complaint made in writing by the payee. Thus the two requirements are that (a) the complaint should be made in writing (in contradistinction from an oral complaint); and (b) the complainant should be the payee (or the holder in due course, where the payee has endorsed the cheque in favour of someone else). The payee, as noticed above, is M/s.Shankar Finance & Investments. Once the complaint is in the name of the "payee" and is in writing, the requirements of Section 142 are fulfilled. Who should represent the payee where the payee is a company, or how the payee should be represented where payee is a sole proprietary concern, is not a matter that is governed by Section 142, but by the general law.

10. As contrasted from a company incorporated under the Companies Act, 1956 which is a legal entity distinct from its shareholders, a proprietary concern is not a legal entity distinct from its proprietor. A Crl.A.No.2703/11

proprietary concern is nothing but an individual trading under a trade name. In civil law where an individual carries on business in a name or style other than his own name, he cannot sue in the trading name but must sue in his own name, through others can sue him in the trading name. Therefore, if the appellant in this case had to file a civil suit, the proper description of the plaintiff should be "Atmakuri Sankara Rao carrying on business under the name and style of M/s.Shankar Finance & Investments, a sole proprietory concern". But we are not dealing with a civil suit. We are dealing with a criminal complaint to which the special requirements of Section 142 of the Act apply. Section 142 requires that the complainant should be payee. The payee is M/s.Shankar Finance & Investments. Therefore, in a criminal complaint relating to an offence under Section 138 of the Act, it is permissible to lodge the complaint in the name of the proprietary concern itself."

(Emphasis supplied)

23. The law laid down by the Hon'ble Apex Court does

not require any further discussion. The Appellate Court

committed an error in assuming that the proprietary concern-

'Uma Shankar Auto Fuels', is not a proprietary concern

represented by its proprietor or any other responsible person.

It has committed an error in observing that there is defect in

the complaint and the impugned judgment passed by the Trial

Court suffers from legal lacuna. Absolutely there is no reason Crl.A.No.2703/11

or basis for the Appellate Court to form such an opinion. I do

not find any support to uphold the said findings.

24. The discussions held above discloses that the

accused who admitted the cheque-Ex.P1 and his signature

found therein is duty bound to rebut the presumption under

Section 138 of the N.I.Act. Even though the accused

examined himself as DW1 and got marked Exs.D1 to D3 in

support of his contentions, the same are not helpful to rebut

legal presumption. The tenor of cross examination to PW1 is

entirely different from the contention taken by the accused

while examining himself as DW1. Accused who admitted his

signature found on Ex.P1, is not successful in rebutting the

presumption and therefore, he is liable to be convicted.

25. I have gone through the judgment of conviction and

order of sentence passed by the Trial Court. It has taken into

consideration all the materials on record and formed an

opinion that the complainant is successful in proving the guilt

of the accused beyond reasonable doubt. I do not find any

illegality or perversity in the said findings. The findings given

by the Appellate Court is not sustainable for the reasons Crl.A.No.2703/11

discussed above. Hence, I answer the above point in the

'Affirmative' and proceed to pass the following:

ORDER

The criminal appeal is allowed.

The impugned judgment of acquittal dated 10.01.2011

passed by the Fast Track Court, Sirsi in Criminal Appeal

No.73/2009 is set aside.

The judgment of conviction and order of sentence dated

07.05.2009 passed by the learned II Additional Judicial

Magistrate, Sirsi in C.C.No.328/2007 is restored.

In view of the disposal of the appeal, pending

I.A.No.3/2012 does not survive for consideration. Accordingly,

same is dismissed.

SD/-

JUDGE

CKK para 1 to 14 /KGK