M/S M K Enterprises vs Vishwanath Rao Pole
2021 Latest Caselaw 6357 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. 382/2021

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. Late K. Panju Poojari
     Aged about 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:

Vishwanath Rao Pole
S/o. Late Jagannatha Rao Pole
Aged about 67 years
R/at No. 301/19, 6th Main,
                            2


14th Cross, Vyalikaval Extension,
Malleshwaram,
Bangalore 560 003.
                                         ...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.1190/2018

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.21,00,000/- 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.21,00,000/- 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.1517/2019 under Section 374(3) of Cr.P.C. which

having been dismissed, the present revision petition

has been filed.

3. The 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

against the accused complaining of commission of

offence under Section 138 of the Act as it was stated

that cheque bearing No.152597 dated 13.12.2017 for

an amount of Rs.21,00,000/- which was issued to the

complainant came to be dishonoured upon

presentation with an endorsement "funds insufficient".

As the complainant got issued legal notice on

08.01.2018 and as the accused had neither paid the

cheque amount nor replied to the notice, complaint

came to be lodged.

5. The brief facts leading to the transaction

are that, the complainant and accused No.2 were

stated to be family acquaintances and as the 2nd

accused was running a chain of hotels and wanted

financial help had requested the complainant to invest

and extend financial assistance to a tune of

Rs.21,00,000/- with a promise that the accused would

pay an amount of Rs.50,000/- per month in return.

6. It is stated that as the accused had

committed default in honouring the understanding,

issued a cheque bearing No.152597 drawn on Dena

Bank towards repayment of the amount paid by the

complainant. As narrated above, as the cheque was

not honoured, complaint came to be filed.

7. Complainant had examined himself as

P.W.1 and had got marked Exs.P.1 to P.21 while the

accused No.2 had examined himself as D.W.1 and had

got marked documents as Exs.D.1 and D.2.

8. The main case as put forth by the accused

as could be gathered from the evidence recorded is

that, the accused being a politician was also running a

chain of hotels and his younger brother - Sri.

Madhava Poojari was looking after the affairs of the

hotels. It is further submitted that his brother was

involved in chit fund transaction with the accused and

after having taken the chit money, it appears the

cheque of the accused was offered as security to the

complainant.

9. The trial Court after detailed appreciation

of evidence has recorded findings on the points for

consideration and had passed a judgment of

conviction.

10. The trial court has recorded a finding that

ingredients of Section 138 of the Act were adhered to

as regards the presentation of cheque and filing of

complaint within the time limit prescribed, while also

noticing the nature of endorsement issued by the

Bank. The trial Court has noticed that the cheque was

presented within three months; that notice - Ex.P.3

was issued on 08.01.2018; that despite the service of

legal notice the accused had not responded and

accordingly, after the lapse of 15 days further action

has been taken.

11. Insofar as source of funds is concerned, the

trial Court has taken note of financial standing of the

complainant and has also taken note of the relevant

documents, such as Income Tax Returns at Ex.P.14,

details of the P.F. and gratuity at Ex.P.15 and

document reflecting receipt of financial benefits upon

retirement as per Ex.P.16. The trial Court noting that

the complainant was working as a Senior Manager at

ITC and was an Income Tax Assessee has found that

the complainant had financial capacity to advance the

amount as asserted in the complaint.

12. The trial Court has noted that Signature on

the cheque is admitted. It has further held that once

the fact that cheque belongs to him and is signed by

him having been admitted, presumption would

operate. It was held that though the accused had

set up the defence as noticed above, no efforts are

made to lead evidence of Sri. Madhava Poojari and if it

is so that cheque was misused, no steps were taken

by the accused regarding the same. Accordingly, the

trial Court has concluded that the cheque was issued

as regards a legally payable debt and in so concluding,

has relied on the presumption under Section 139 of

the Act.

Proceedings in Crl.A.No. 1517/2019:

13. As against the order of conviction,

Crl.A.1517/2019 came to be filed under Section

374(3) of Cr.P.C. Before the appellate Court, the

accused had contended that the trial Court had not

correctly appreciated the aspect of capacity of the

complainant to lend the money; that the cheque of

the accused had been misutilised; that the admission

of the complainant that he had paid an amount of

Rs.5,00,000/- by way of cheque and the remaining

amount by cash which payment was not backed by

sufficient evidence; that the cheque book containing

cheque No. 152597 was issued in the month of May,

2010 and accordingly, issuance of cheque in the

month of December, 2017 raised serious doubts; that

it was the suggestion of D.W.1 (accused No.2) himself

that an amount of Rs.16,00,000/- was paid to the

accused to pay the remittance to ECI and PF as

workers contribution.

14. The Appellate Court has considered in

detail documentary evidence at "P" Series which

included Income Tax Returns and Bank Statements

and has held that the said documents are primary

documentary evidence which would indicate capacity

of the complainant to pay and accordingly, affirmed

the findings of the trial Court. The Appellate Court has

observed that the complainant being in receipt of

retirement benefits had lent amounts to the accused

periodically.

15. The Appellate Court has also addressed the

contention of the accused that the amount advanced

by the complainant was not a loan and has observed

that even if the amount is construed to be an

investment with return of profit, cheque was issued

towards such debt or liability whereby the accused

had sought to repay the amount borrowed and such

issuance of cheque would satisfy the ingredients of

Section 138 of the Act and that offence was

committed as it was not honoured.

16. As regards the contention that cheque leaf

belonged to the date of May, 2010 and the same was

issued in the year 2017, the court had opined that, as

the complainant and the accused had transacted

between the years 2008 to 2010 the issuance of post-

dated cheque could not be ruled out and such

issuance of cheque did not affect the validity of the

instrument.

17. The appellate Court has also considered the

contention of the accused that cheque issued by him

was in fact presented by way of security by his

brother - Sri. Madhava Poojari to the complainant

relating to the chit fund transaction. The appellate

Court has observed that the brother of the accused

was not examined and that no rebuttal evidence was

led in to demonstrate that the cheque was issued as

security to the chit fund transaction.

18. The Appellate Court has further observed

that the purported defence raised by the accused did

suggest that the complainant had the capacity to pay.

The appellate Court has discarded the contentions

raised by the accused as being vague and cannot be

acceptable rebuttal evidence. The appellate court has

also reiterated that the presumption under Section

118 and 139 of the Act have not been rebutted.

Present Revision Proceedings:

19. 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.    Capacity to pay - Para 11.

      B.    Misutilization of Cheque - Para 12.

      C.    Transaction is loan transaction and the

amount if invested for business the investor is entitled for only profit - Para 13.

D. Payment of Rs.5,00,000/- by way of cheque and payment of remaining amount by way of cash and such payment by way of cash cannot be accepted. - Para 15.

E. Payment made between 2008 to 2010 while cheque is issued in the year 2017 and accordingly, cheque was issued as regards time barred debt - Para

16.

F. Non consideration of the fact that during the course of proceedings relating to the present complaint, the daughter of the complainant had issued another cheque which is an action that no prudent person would have resorted to and accordingly, transaction is doubtful - Para 19.

20. 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.?

21. 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".

22. 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."

23. The same principle has been reiterated in

multiple decisions.

24. The petitioners have raised once again the

same grounds as had been raised before the trial

Court as well as the Appellate court and on such

grounds have sought to assail the validity of the

judgment.

25. It must be noted that both the Courts have

categorically held in the affirmative as regards to the

financial capacity of the complainant to have advanced

amount to the accused while taking note of the

employment of the complainant as the Senior

Manager in ITC and after appreciating the documents

evidencing receipt of retirement benefits by the

complainant.

26. The Courts have also envisaged of a

situation where a post-dated cheque may have been

issued and such issuance of post-dated cheque would

not affect the validity of the cheque issued.

27. The contention of mis-utilisation of cheque

by the brother of accused No.2 has not been accepted

as no efforts were made by the accused to summon

the brother - Sri. Madhava Poojari before the Court.

Further, the Courts have noticed that no evidence was

led in regarding the chit fund transaction. Accordingly,

the courts have held that the accused has not been

successful in rebutting the presumptions.

28. Clearly the aspect of cheque bearing the

signature of accused No.2 is admitted. Once such

admission is made, presumption under Section 139

and 118 of the Act would be raised and there is no

legally acceptable evidence that has been adduced to

rebut such presumption.

29. 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.

30. The mere factum of payment stated to

have been made between 2008 and 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.

31. 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.

32. Accordingly, there are absolutely no

grounds made out for interference in exercise of the

revisional jurisdiction. In fact, cheque may have been

post-dated cheque and that would not in any way

affect the validity of the negotiable instrument.

33. Concurrent findings on facts cannot be

relooked into by the Court exercising revisional power.

Further, even if a different conclusion could be arrived

at in the present proceedings, the same would not be

a ground to interfere with the concurrent findings of

both the Courts.

34. There is no perversity in any of the findings

by the Courts below and accordingly, no grounds are

made out for exercise of revisional power in the

present facts.

35. Though much is made out by the

petitioners that after the cross-examination of the

complainant in the present case, another cheque has

been presented by the daughter of the complainant

which would indicate prima facie and improbable

factual situation, however, that by itself would have

no impact on consideration of issuance of cheque in

the present case and the presumption under Section

139 rightly relied upon by the Courts below has not

been dislodged by putting forth appropriate evidence.

36. Accordingly, the petition is dismissed.

The Order of the Court of first instance in C.C.No.

1190/2018 dated 12.06.2019 stands affirmed. So also

the order of dismissal of appeal in Crl.A.

No.1517/2019 dated 23.11.2020 stands confirmed.

Sd/-

JUDGE

VP