M/S M K Enterprises vs Kumari Varsha Pole
2021 Latest Caselaw 6319 Kant

                            1


IN THE HIGH COURT OF KARNATAKA, BENGALURU

     DATED THIS THE 17TH DAY OF DECEMBER, 2021
                         BEFORE
     THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV


 CRIMINAL REVISION PETITION NO. 375/2021

BETWEEN:

1.     M/s. M. K. Enterprises
       Partnership Firm,
       Rep. by Partner, K. Gopal Poojari
       New Shanthisagar, No.4,
       P & T Colony, R. T. Nagara,
       Bengaluru 560 032.

2.     Sri. K. Gopala Poojari
       S/o. Panju Poojari
       Aged 60 years
       Partner, M/s. M. K. Enterprises
       Hotel New Shanthisagar
       Residing at Kalyana Village Thalluru
       Kundapura Taluk,
       Udupi District 576 225.
                                              ...Petitioners
(By Sri. Nehru M.N., Advocate)

AND:

Kumari Varsha Pole
D/o. Vishwanath Rao Pole
Aged about 34 years
R/at No. 301/19, 6th Main,
14th Cross, Vyalikaval Extension,
Malleshwaram,
Bangalore 560 003.
                              2


                                             ...Respondent
(By Ms. Ayantika Mondal, Advocate)

      This Criminal Revision Petition is filed under Section
397 read with Section 401 of Cr.P.C., praying to call for
the entire records in C.C.No.3369/2018 on the file of
Hon'ble IV Additional & XXX ACMM and set aside the
judgment of conviction dated 12.06.2019 passed by the
Hon'ble IV Additional & XXX ACMM at Bangalore in
C.C.No.3369/2018 convicting the accused/petitioner for
the offence punishable under Section 138 of N.I.Act and to
acquit the accused from the said alleged offence and set
aside the judgment dated 23.11.2020 passed by the
Hon'ble LXVII Addl. City Civil and Sessions Judge in
Crl.A.No.1518/2019.

      This petition pertaining to the Bengaluru Bench
reserved on 26.11.2021 coming on for pronouncement of
orders at Dharwad Bench, through video conference, this
day, the Court made the following:

                        ORDER

The petitioners 1 and 2 were accused Nos. 1 and

2 respectively before the trial Court and have filed the

present revision petition under Section 397 read with

Section 401 of Cr.P.C calling in question the order of

the Additional Chief Metropolitan Magistrate passing a

judgment of conviction in C.C.No.3369/2018

convicting the petitioners for the offence punishable

under Section 138 of the Negotiable Instruments Act,

1881 (for short 'the Act'). The Court of first instance

while sentencing the accused had directed the 2nd

accused to pay penalty of Rs.10,00,000/- and on

failure to honour the same, the accused was

sentenced to 6 months simple imprisonment. It was

directed that the said penalty of Rs.10,00,000/- was

to be given to the complainant as compensation in

terms of Section 357(1) of Cr.P.C. It was further

stipulated that the accused was to pay a fine of

Rs.5,000/- which was directed to be appropriated by

the Government.

2. As against the said judgment of conviction,

the petitioners had preferred Criminal Appeal

No.1518/2019 under Section 374(3) of Cr.P.C. which

having been dismissed, the present revision petition

has been filed.

3. Parties are referred to by their rank before

the trial Court (Court of first instance) for the purpose

of convenience.

4. The complainant had filed a complaint

asserting that cheque issued by the 2nd accused

bearing cheque No.152596 drawn on Dena Bank when

presented came to dishonoured on the ground of

"insufficient funds" and as the accused failed to make

payments despite issuance of notice, the complaint

came to be filed invoking the provisions of Section

138 of the Negotiable Instruments Act, 1881.

5. Facts that are made out are that the

2nd accused and the father of the complainant were

known to each other and as it was submitted by the

2nd accused that a hotel would be opened in the name

of father of the complainant and a portion of the profit

from the hotel business would be paid to the

complainant, a sum of Rs.10,00,000/- was withdrawn

on two occasions on 23.09.2010 and given to the 2nd

accused.

6. It is stated that as the accused did not

honour commitment regarding payment of profits,

accused decided to repay the amount by issuing a

cheque dated 06.05.2018 for an amount of

Rs.10,00,000/- by a cheque bearing No.152596.

Cheque being presented came to be dishonoured by

virtue of an endorsement dated 05.06.2018. Despite

legal notice, accused No.2 had not taken any steps for

repayment. Accordingly, complaint came to be filed.

7. The main contention raised by the accused

as could be gathered from the material including the

evidence of the parties on record are that, the 2nd

accused was active in politics and the affairs of

M/s.M.K.Enterprises were looked after by Sri.Madhava

Poojari who was his brother. It is stated that the

cheques which were signed were handed over to his

brother who was looking after the affairs of the firm.

It is also asserted that as Sri. Madhava Poojari had a

chit fund transaction with the father of the

complainant and as he had taken the chit, as a

security for repayment, cheque was handed over to

the complainant. It is stated that the said cheque had

been misused and that the complainant did not have

the financial capacity to pay the amount of

Rs.10,00,000/-.

8. The trial Court has framed the following

points of consideration:

(i) Whether the complainant proves that

pursuant to the request of the accused for

financial assistance of Rs.10,00,000/- with a

promise that a hotel would be opened in the

name of the complainant's father, the

complainant had withdrawn amount in two

installments of Rs.5 Lakhs each and paid to the

accused. Further, when complainant proves

beyond reasonable doubt that as no profits were

given upon demand for repayment, the accused

has given a cheque dated 06.06.2018 vide

Cheque No.152596 drawn on Dena Bank ?

(ii) Whether the complainant proves that as the

accused has failed to pay the amount despite

issuance of notice, offence under Section 138 of

the Negotiable Instruments Act has been

committed?

9. The complainant examined herself as P.W.1

and marked documents at Exs.P.1 to P.11. The

accused No.2 has led evidence as D.W.1 and marked

one document at Ex.D.1.

10. The trial Court has recorded a finding that

the complainant has withdrawn an amount of

Rs.5,00,000/- from the Bank on two occasions and

handed over such amount to the 2nd accused. It is

submitted that the assertion of withdrawal is

supported by Ex.P.10 - statement of HDFC Bank.

Taking note of the said fact, the trial Court comes to a

conclusion that the financial capacity of the

complainant to pay stands established.

11. The trial Court further observes that

though the 2nd accused has talked about a chit fund

transaction, no documents or evidence are produced

to substantiate the contention that the cheque was

issued only as security regarding the chit fund

transaction. The Court also observes that no effort

was made to summon or lead evidence through the

said Sri. Madhava Poojari and notices that no reply

was given to the legal notice issued despite the legal

notice having been served on the accused.

12. The trial court has also noted that the

accused has accepted that the signature on Ex.P.1 is

of the accused. Accordingly, the trial Court taking note

of the admission of the accused as regards to the

signature on the cheque, has relied on the

presumption under Section 139 of the Act while

recording a finding against the accused.

13. As regards to the point for consideration

relating to adherence to time limit and procedure

prescribed under Section 138 of the Act, the trial

Court has taken note that the cheque dated

06.05.2018 which was presented and endorsement

dated 05.06.2018 which was issued by the bank. It is

also observed that cheque has been presented within

three months and legal notice having been issued on

19.06.2018 and served, as there was no reply by the

accused for a period of 2 weeks, complaint came to be

filed under Section 138 of the Act. Having found in the

affirmative as regards to points for consideration the

trial Court has proceeded to pass the judgment of

conviction as has been stated above.

Proceedings in Crl.A.No. 1518/2019:

14. As against such judgment of conviction, the

accused have filed Criminal Appeal No. 1518/2019.

The primary contention by the accused in the appeal

was that while the father of the complainant had filed

a case against the accused and after the cross-

examination on 28.04.2018 in C.C.No.1190/2018, a

cheque dated 152596 drawn on Dena Bank was issued

in favour of the complainant who is the daughter of

the complainant in C.C.No.1190/2018 was

unbelievable. It was also contended that the

complainant had withdrawn a sum of Rs.10,00,000/-

on two occasions of Rs.5,00,000/- each and the story

of the complainant that she made payment by way of

cash cannot be accepted as nothing prevented her

from making payment by way of RTGS.

15. The appellate Court has observed that as

regards the aspect relating to source of income, the

bank statement would reveal that amount was

withdrawn by the complainant and it was to be

concluded that such withdrawal was made in order to

make payment. The appellate Court further observes

that the facts would reveal that there existed a liability

and though there was some doubt regarding issuance

of cheque in the year 2018, the cheque may have

been issued as a post-dated cheque and that would

not affect the validity of the instrument. It is further

observed by the appellate Court that despite the

accused having asserted that the cheque was

misused, no evidence has been led in as regards such

misuse or as regards the chit fund transaction. The

appellate Court has also observed that no reply notice

was issued relating to the legal notice, which could be

construed to be an adverse inference in terms of

Section 114 of the Evidence Act.

16. Accordingly, taking note of the presumption

under Section 139 of the Act, the appellate Court has

affirmed the judgment of conviction passed by the

trial Court.

Present Revision Proceedings:

17. The point that arise for consideration in the

present revision proceedings is:

Whether sufficient grounds are made out for interference with the concurrent findings of the trial Court

as well as the appellate Court in exercise of the revisional power under Section 397 of Cr.P.C.?

18. At the outset, it must be pointed out that

the scope of interference in exercise of revisional

power is limited and the Court is required to satisfy

itself while exercising such power regarding the

"Correctness, legality or propriety of any finding,

sentence or order" and as to the "regularity of any

proceedings of such inferior Court".

19. The observation of the Apex Court in the

case of Sanjaysinh Ramrao Chavan Vs. Dattatray

Gulabrao Phalke and others reported in (2015) 3

SCC 123 at paragraph No.14 is as follows:

".....Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is non- consideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in

setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal jurisprudence.

Revisional power of the court under Sections 397 to 401 of Cr.PC is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the courts may not interfere with decision in exercise of their revisional jurisdiction."

20. The same principle has been reiterated in

multiple decisions.

21. The revision petition has been filed

assailing the judgment of the trial Court as well as

that of the appellate Court on the following grounds:

A. That the complaint in the present instance

was filed on 20.07.2018 whereas the father of the

complainant had already filed a case against the

accused on 28.02.2018 and that the cheque was

issued by the accused in favour of the complainant

after the complaint filed by the father of the

complainant which version is inherently unbelievable.

B. That there was no whisper of the other

transaction relating to C.C.No.1190/2018 which has

raised number of doubts as regards to the transaction

- Para 12 and 13.

C. That the complainant had withdrawn

amount by way of cash on 2 occasions and nothing

had prevented her from making payment by way of

RTGS to the accused - Para 16.

D. That the transaction is stated to have taken

place in the year 2010 whereas cheque was issued on

06.05.2018 and is clearly in relation to a time barred

debt - Para 19

22. Clearly each of the contentions have been

considered in detail by the trial Court as well as the

Court of appeal and in exercise of revisional

jurisdiction, no grounds are made out for re-

appreciating the evidence.

23. In fact as regards to the requirements

under Section 138 of the Act relating to issuance of

cheque, presentation of the same within 3 months,

relevant endorsement as contemplated under Section

138 of the Act, issuance of legal notice, granting 15

days time by way of legal notice to honour the claim

and filing of the complaint within the requisite time

period have all been answered in the affirmative as

being made in accordance with the legal requirements

and the time limit provided under Section 138 of the

Act.

24. As regards the capacity to pay, the factum

of availability of Rs.10,00,000/- in the account and its

withdrawal on 2 occasions as is evidenced from the

bank statement would clearly reflect the financial

capacity as rightly held concurrently by both the

courts.

25. The courts have also held that the defence

of misutilisation of cheque has not been backed by

any positive action by way of complaint by the

accused and accordingly, defence being a weak

defence has not resulted in lifting of the presumption

under Section 139 of the Act. This presumption having

come into place as the issuance of cheque and the

admission of signature by the accused No.2 is

unequivocal. The defence that cheque was issued

relating to the chit fund transaction has also been

rightly disbelieved by the courts as no positive

evidence has been put forth in that regard by the

accused. Both the Courts have rightly noticed that Sri.

Madhava Poojari ought to have been examined if any

credence was to be given to the defence raised by

accused No.2 relating to misutilisation of the cheque.

26. Further, the defence that even if the

version of the complainant was to be accepted as on

date of presentation of the cheque, the debt was time

barred does not defeat the rights of the complainant

in the present factual matrix. The complainant has

specifically asserted that the amount that was given to

the accused was with the assurance that profits from

the business would be given.

27. The mere factum of payment stated to

have been made in 2010 would not make it a time

barred debt as on the date of issuance of cheque in

2018. As to when the debt occurred is a factual

inquiry. The nature of the transaction was that in lieu

of the investment made by the complainant, a hotel

would be opened in the name of father of the

complainant and profits from the business would be

paid. Accordingly, when once a cheque is issued in

light of the presumption of consideration by virtue of

Section 139, it could be construed that a cheque has

been issued towards a debt. As to whether the debt

was time barred as on the date of presentation of

cheque is to be proved by the accused. Even

otherwise once a cheque is issued it could be

construed to be a promise made in writing under

Section 25(3) of the Indian Contract Act and if read in

conjunction with illustration(e), the cheque could be

construed to be valid and its dishonour actionable

under Section 138 of NI Act. Accordingly, the

contention that the cheque is issued as against a time

barred debt and hence, unenforceable debt is liable to

be rejected.

28. Further, when once the signature on the

cheque has been admitted, the presumption under

Section 139 and 118 of the Act comes into play and

such presumption has not been rebutted by any

legally tenable defence.

29. Accordingly, there are absolutely no

grounds made out for interference in exercise of the

revisional jurisdiction. The mere fact that the cheque

in the present case was presented at a point in time

subsequent to the proceedings in C.C.No.1190/2018

would not in anyway affect the legal liability that flows

from the issuance of cheque. In fact, cheque may

have been post-dated cheque and that would not in

any way affect the validity of the negotiable

instrument.

30. Both the courts have concurrently held

regarding existence of liability while accepting the

version of the complainant relating to payment of

money and such concurrent findings cannot be

interfered with in exercise of revisional jurisdiction.

Accordingly, petition is dismissed. The judgments of

conviction in CC No.3369/2018 stands affirmed as

also the judgment in Crl. Appeal No.1518/2019.

Sd/-

JUDGE

VP