Shashikanth R Shetty vs Central Bank Of India
2021 Latest Caselaw 979 Kant

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 16TH DAY OF JANUARY, 2021

                       BEFORE

       THE HON'BLE MR. JUSTICE V. SRISHANANDA

   CRIMINAL REVISION PETITION NO.366/2015

BETWEEN:

SHASHIKANTH R. SHETTY
S/O. RAMANNA SHETTY
AGED ABOUT 45 YEARS
NO. 2-95 BADDAKERE HOUSE
YENDAGUDDI VILLAGE
CHIKKADI, KATAPADY
UDUPI TALUK - 574 106.               ...PETITIONER

(BY SRI. VIGHNESHWARI. S. SHASTRI, ADV.)

AND:

CENTRAL BANK OF INDIA\
HAVING ITS HEAD OFFICE AT
MUMBAI AND
BRANCH OFFICE INTERALIA AT
KINNIMULKI, UDUPI, AND IS
REPRESENTED HEREIN BY ITS BRANCH
MANAGER SRI.D.T.SURESH
AGED ABOUT 56 YEARS, SON OF
D.V. THYAGARAJAN KINNIMULKI
PIN CODE - 576 101.                  ...RESPONDENT

 (RESPONDENT SERVED)

    THIS CRIMINAL REVISION PETITION IS FILED
UNDER SECTION 397 AND 401 CR.P.C PRAYING TO SET
                              2


ASIDE THE JUDGMENT AND ORDER DATED 17.3.2015
PASSED BY THE PRL. S.J., UDUPI DISTIRCT, UDUPI IN
CRL.A.NO.29/2013 AND THE JUDGMENT AND ORDER OF
CONVICTION AND SENTENCE DATED 21.2.2013 PASSED
BY    THE   PRL.C.J.  AND   J.M.F.C.,  UDUPI   IN
C.C.NO.1637/2008 AND ACQUIT THE PETR. OF CHARGES
LEVELED AGAINST HIM.

     THIS CRIMINAL REVISION PETITION COMING ON
FOR FINAL HEARING THIS DAY, THE COURT MADE THE
FOLLOWING:-

                          ORDER

The accused is in Revision challenging the Order

passed in CC No.1637/2008 dated 21.2.2013 whereby the

accused came to be convicted for the offence punishable

under Section 138 of the Negotiable Instruments Act and

sentenced to pay compensation of Rs.3,00,000/- to the

complainant within one month from the date of the

judgment. In default of payment of compensation, the

accused is sentenced to undergo simple imprisonment for

three months; which came to be confirmed in Criminal

Appeal No.29/2013.

2. The brief facts, which are necessary for disposal

of the Revision Petition are as under:

The accused had a business transaction with the

complainant Bank and towards repayment of loan with

accrued interest, he issued a cheque bearing No.174338

dated 13.11.2007 in a sum of Rs.5,26,295/-. The said

cheque on presentation came to be dishonoured with an

endorsement 'funds insufficient'. Thereafter, the

complainant issued a statutory notice calling upon the

accused to make good the payment covered under the

cheque within fifteen days from the date of receipt of

notice. It is further contended that even though the notice

was served, the accused neither complied with the callings

of notice nor replied the same which necessitated the

complainant to file a complaint under Section 138 of the

Negotiable Instruments Act.

3. The learned Magistrate after taking cognizance of

the offence alleged against the accused, secured the

presence of the accused and since, accused pleaded not

guilty, trial was held. In order to prove the complaint

averments, the Officer of the complainant-Bank Sri D.T.

Suresh was examined as PW1 and one Doddarangappa

was examined as PW-2 and in all marked 10 documents

which were exhibited and marked as Exs.P-1 to P-10 on

behalf of the complainant. Thereafter, accused statement

as contemplated under Section 313 Cr.PC., was recorded.

Accused also got examined himself as DW-1 and relied on

six documents which were exhibited and marked as

Exhibits D1 to D6.

4. The learned Magistrate after taking into

consideration the oral and documentary evidence on

record, after hearing the parties convicted the accused for

the offence punishable under Section 138 of the Act and

sentenced to pay a sum of Rs.3,00,000/- as compensation

payable to the complainant-Bank and to undergo simple

imprisonment for a period of three months to the

complainant with a default sentence of simple

imprisonment for one month.

5. Being aggrieved by the judgment of conviction

and order of sentence, the accused preferred Criminal

Appeal No.29/2013 before the Principal Sessions Judge,

Udupi. The learned Principal Sessions Judge, Udupi, after

securing the records and hearing the parties, re-

appreciated the entire materials on record and concurred

the judgment passed by the learned Magistrate by

dismissing the appeal. It is those judgments, which are

the subject matter of this Revision Petition.

6. Sri Gururaj, learned counsel representing Sri

Vighneshwar S. Shastri, for the Revision Petitioner

vehemently contended that both the courts have grossly

erred in convicting the accused in not properly appreciating

the materials on record and prayed for allowing the

Revision Petition. He further argued that the business

transaction was with one Tharanath Shetty and the

accused stood as a guarantor for the loan borrowed by Sri

Tharanath Shetty and for the dues in the account of

Tharanath shetty, as a security, the accused had issued

the cheque which is the subject matter of this lis and the

same has been mis-used by the Bank by filling up the

blanks in the cheque and thus, there is no legally

recoverable debt proved by the bank which has been lost

sight of by both the courts and thus sought for allowing

the Revision Petition. Alternatively, he submitted that the

sentence passed against the Revision Petitioner is

excessive and thus sought for allowing the Revision

Petition.

7. Even though the bank is served in this Revision

Petition, the Bank remained absent and there was no

representation on behalf of the complainant-Bank. Thus,

in the light of the arguments put forth on behalf of the

Revision Petitioner and on perusal of the records, the

following points would arise for consideration:

"(i) Whether the finding recorded by the learned Magistrate and confirmed by the first Appellate Court is suffering from patent defect without jurisdiction and violative of the principles of law governing the offence u/s.138 of the Negotiable Instruments Act?

(ii) Whether the sentence passed by the learned Magistrate, confirmed by the first Appellate Court is excessive?.

8. The answer to the above point No.1 is in the

Negative and Point No.2 is in Partly Affirmative for the

following:

REASONS

9. In the case on hand, issuance of cheque by the

accused and the signature found in the cheque are not in

dispute. It is found from the records that the cheque on

presentation returned with an endorsement 'funds

insufficient' and statutory legal notice marked at Ex.P3

was duly served on the accused and there was no reply on

behalf of the accused. The complainant-Bank produced

the loan application at Ex.P8 and On demand promissory

note Ex.P9 and that there is no dispute about the

execution of on demand promissory note as well as the

loan application.

10. It is the case of the accused that he stood as a

guarantor to the loan obtained by Sri Tharanath Shetty

who is his business partner who duped not only the Bank

but also the accused. It is an admitted fact that the bank

proceeded against Tharanath Shetty also by filing a

criminal case and some amount was recovered from him.

Taking into account the amount received by the Bank from

Tharanath shetty, the learned Magistrate convicted the

accused for the offence punishable under Section 138 of

the Negotiable Instruments Act and ordered only

Rs.3,00,000/- as fine payable to the Bank by the accused.

While doing so, the learned Magistrate has discussed about

the fact that Tharanath shetty paid sum of Rs.3,00,000/-

in instalments and thereafter, a criminal case against

Tharanath shetty came to be dropped. In other words, as

against the cheque amount of Rs.5,26,259/-, the learned

Magistrate has ordered only Rs.3,00,000/- as the fine

amount payable by the accused to the complainant-Bank.

No doubt, the accused got himself examined as DW-1 and

tried to rebut the presumption available to the

complainant-Bank as is contemplated u/s.139 of the

Negotiable Instruments Act. In his examination in chief

itself, he has specifically admitted that Tharanath shetty

did not pay the loan in entirity. It is the specific case that

the matter was referred to Lok Adalath and the Bank has

entered into an illegal agreement with Tharanath Shetty.

In his cross examination, he admits that he did not reply

to the legal notice. He admits his signature in the loan

agreement at Ex.P-10. He also admits that he did not take

any action against the Manager of the Bank or did not

complain to the higher authorities about the mis-use of the

cheque in question.

11. In other words, a mere denial that the cheque is

not issued for legally recoverable debt would not be

sufficient enough to hold that there was no legally

recoverable debt on record. The materials on record has

been properly considered by the learned Magistrate which

was re-appreciated by the learned Principal District and

Sessions Judge in the first appeal. In such circumstances,

even after perusing the records and in the light of the

arguments advanced on behalf of the Revision Petitioner,

this court does not find any patent defect on record nor

there is any error of jurisdiction or law which would entitle

the accused to seek for interference by this court in this

Revision Petition. Accordingly, point no.1 is answered.

REGARDING POINT NO.2:

12. The learned Magistrate ordered three months

simple imprisonment for the offence punishable under

Section 138 of the Negotiable Instruments Act and a sum

of Rs.3,00,000/- to be payable as compensation to the

complainant. There was no fine amount ordered for the

State. The same is confirmed by the first Appellate Court.

The learned Magistrate has taken into consideration that a

sum of Rs.3,00,000/- was received from Tharanath Shetty

and even though the cheque is for a sum of Rs.5,26,259/-,

ordered only Rs.3,00,000/- as the compensation.

13. In the considered opinion of this court, the

sentence passed by the learned Magistrate which is

confirmed by the first Appellate Court in so far as the

simple imprisonment is concerned is excessive as there is

no reason assigned for awarding simple imprisonment.

Since there is no fine amount ordered against the State, if

Revision Petitioner in ordered to pay fine of Rs.3,05,000/-

for the offence punishable under Section 138 of the

Negotiable Instruments Act and ordering sum of

Rs.5,000/- as fine to the State and maintaining the

compensation amount payable to the complainant in a sum

of Rs.3,00,000/- would meet the ends of justice.

14. However, having regard to the prevailing

pandemic COVID-19, reasonable time is also to be granted

to the accused to pay fine amount of Rs.3,05,000/- less

the amount in deposit made by the accused when the

matter was pending before the first Appellate Court and

before this court. In the considered opinion of this court, if

time is granted till the end of June, 2021 to pay the

balance amount, would not only facilitate the accused to

comply the order but also would meet the ends of justice.

It is also made clear that if the accused fails to make use

of this concession shown by this court, the accused is

sentenced to undergo simple imprisonment for a period of

three months by restoring the order of the learned

Magistrate. Accordingly, Point No.2 is answered and

following order is passed:

ORDER

The Revision Petition is allowed in part while

maintaining the conviction for the offence punishable

under Section 138 of the Negotiable Instruments Act, the

Order passed by the learned Magistrate, which is

confirmed by the first Appellate Court in Criminal Appeal

No.29/2013 is hereby set aside.

Instead, the accused is ordered to pay fine of

Rs.3,05,000/-. Out of which, a sum of Rs.3,00,000/- is to

be paid as compensation to the complainant-Bank as is

ordered by the learned Magistrate and confirmed by the

first Appellate Court in terms of Section 357 of Cr.PC., and

balance amount of Rs.5,000/- is ordered to be paid to the

State as fine payable on or before 30th June, 2021 less the

amount in deposit made by the accused before the first

Appellate Court if any.

If the accused fails to make the balance payment on

or before 30th June, 2021, the order passed by the

learned Magistrate shall stand restored.

Office to return the Trial Court records with a copy of

this order forthwith.

Sd/-

JUDGE PL*