Smt.Vijayalaxmi W/O. ... vs Shanker Kodla S/O. Late Kazshappa ...
2021 Latest Caselaw 1780 Kant

         IN THE HIGH COURT OF KARNATAKA

                KALABURAGI BENCH

       DATED THIS THE 18TH DAY OF MARCH 2021

                     BEFORE

 THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR

        CRIMINAL APPEAL NO.200074/2016

BETWEEN:

SMT. VIJAYALAXMI W/O MALLIKARJUN NAGUNDI
AGE: 39 YEARS OCC: HOUSEHOLD
R/O H.NO.79, CHAMUNDESHWARI NAGAR
JEWARGI ROAD, GULBARGA - 585 103.

                                    ... APPELLANT

(BY SRI. SACHIN M. MAHAJAN, ADVOCATE)

AND:

SHANKER KODLA S/O LATE KASHAPPA KODLA
AGE: 65 YEARS OCC: PRESIDENT OF
MAHATMA JYOTIBHA PULE PADAVI MAHAVIDYALAYA
R/O: SHAHABAZAR NAKA, GULBARGA - 585 103.

                                   ... RESPONDENT


(BY SRI. AVINASH UPLOANKAR, ADVOCATE
(ABSENT))
                           2




    THIS   CRIMINAL   APPEAL      IS     FILED   UNDER

SECTION 378 (4) OF CR.P.C., PRAYING TO CALL FOR

THE RECORDS OF TRIAL COURT AND SET ASIDE THE

JUDGMENT      AND         ORDER          PASSED      IN

CRL.A.NO.18/2013 DATED 16.06.2014 BY THE IVTH

ADDL.   DISTRICT    AND       SESSIONS     JUDGE,    AT

GULBARGA, VIDE ANNEXURE-A, AND CONVICT THE

ACCUSED UNDER SECTION 138 OF N.I. ACT AND

CONFIRM THE ORDER PASSED IN C.C.NO.3811/2010

DATED 08.03.2013 BY THE IVTH ADDL. CIVIL JUDGE

AND JMFC GULBARGA AND DIRECT THE ACCUSED

TO PAY THE CHEQUE AMOUNT WITH INTEREST IN

THE ENDS OF JUSTICE AND EQUITY.


    THIS   APPEAL   HAVING       BEEN     HEARD     AND

RESERVED FOR JUDGMENT THIS DAY, DELIVERED

THE FOLLOWING:
                               3




                       JUDGMENT

This appeal is filed by the complainant challenging

the judgment dated 16.06.2014 passed by the IV Addl.

District and Sessions Judge, Gulbarga in

Crl.A.No.18/2013 whereunder the judgment and

sentence passed in C.C.No.3811/2010 dated

08.03.2013 by IV Addl. Civil Jude (Jr. Dn) and JMFC,

Gulbarga convicting the respondent - accused for the

offence punishable under Section 138 of the Negotiable

Instrument Act (for short 'N.I. Act'), came to be set-aside

and respondent - accused was acquitted for the said

offence.

02. The appellant was the complainant and

respondent was the accused before the Trial Court.

03. The parties will be referred as per their

ranks before the Trial Court.

04. Case of the complainant in brief is as

under;-

The complainant was working as a superintendent

in Mahatma Jyotibha Phule Padavi Mahavidyalaya, an

educational institution run by the accused. At that

point of time, on the request of accused for hand loan

for improvement of institution and business necessities,

the complainant advanced loan of Rs.7,00,000/- to him

on 10.06.2009 by pooling out funds from her family

members and relatives. The accused agreed to repay the

loan within six months. After six months, the accused

did not repay the loan. After repeated persuasion

accused issued a cheque dated 15.03.2010 for

Rs.7,00,000/- to complainant, drawn on Canara Bank,

Subramanya Nagar, Bangaluru. The complainant

presented the cheque for encashment. The cheque

returned unpaid with an endorsement 'account closed

by drawer'. Immediately thereafter, the complainant

issued a legal notice dated 27.03.2010 to accused to his

both addresses. The accused issued reply notice. With

these averments the complainant had filed complaint for

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

Act.

05. The complainant herself examined as PW.1

and produced documents as per Exs.P.1 to 7. The

accused denied the incriminating evidence while

recording his statement under Section 313 of Cr.P.C.

Accused led defence evidence by examining himself as

DW.1 and he examined two witnesses as DWs.2 and 3

and got marked documents as per Exs.D.1 to 10.

06. The Trial Court after hearing arguments of

both sides, formulated point for consideration and

passed judgment dated 08.03.2013 in C.C.No.3811/

2010 and convicted the accused for the offence

punishable under Section 138 of N.I. Act and sentenced

him to pay a fine of Rs.10,00,000/-. In default to pay

fine, the accused shall undergo simple imprisonment for

a period of six months. Out of this fine amount, a sum

of Rs.9,75,000/- was ordered to be paid as

compensation to the complainant and remaining

amount was ordered to be remitted to the State.

07. Accused challenged the said judgment of

conviction and order of sentence in Crl.A.No.18/2013

on the file of IV Addl. District and Sessions Judge,

Gulbarga. The said appeal came to be allowed by the

judgment dated 16.06.2014 and judgment passed by

the Trial Court in C.C.No.3811/2011 dated 08.03.2013

came to be set-aside and respondent - accused was

acquitted for the offence punishable under Section 138

of N.I. Act.

08. The appellant - complainant has challenged

the said judgment in this appeal.

09. Heard Sri. Sachin M. Mahajan, the learned

counsel for the appellant-complainant. The learned

counsel for the respondent - accused was absent.

10. The learned counsel for the appellant -

complainant would contend that the order passed by

the Appellate Court is contrary to the law and facts. The

Appellate Court has not applied its judicial mind to the

facts and material on record and reached wrong

conclusion. The Appellate Court has not appreciated the

evidence or documents properly. The Trial Court had

rightly held that the accused had not disputed his

signature on the cheque and the accused in his reply

had stated that this complainant had stolen the cheque.

The different version have been stated in the Court.

Hence, the Court held that the complainant had proved

her case beyond reasonable doubt and convicted the

accused. The Appellate Court has overseen all the

evidence and materials and acquitted the accused. The

Appellate Court has mechanically passed the order

without applying its judicial mind. The Appellate Court

has wrongly interpreted Sections 118 and 139 of N.I.

Act. He placed reliance on the decision in the case of

Sripad vs. Ramadas M. Shet reported in 2014 (5)

Kar. L.J.283, wherein this Court has observed thus;-

"15. Looking to the above said circumstances, I am of the opinion, the initial presumption under Sections 118 and 139 of Negotiable Instruments Act cannot be said to have been rebutted by the accused. Of course, the accused need not rebut the presumption beyond all reasonable doubt as it is incumbent upon the complainant to prove his case beyond reasonable doubt.

Nevertheless, the accused has to place sufficient materials to convince the Court that his case is probabilised when it is compared with the case of the complainant. If the accused has failed to establish that his case is proved by means of preponderance of possibility that is to say, probabilities placed

by the accused have the capacity to preponder over the case of the complainant then only such materials should be accepted. Mere a distorted version or mere taking up the plea or the defence that he is not liable to pay any amount or he discharged the amount are not sufficient to put back the burden on to the complainant to prove his case beyond reasonable doubt."

With these submissions, he prayed to allow the

appeal.

11. Having heard the learned counsel for the

appellant - complainant and on perusal of the records,

the following point that arise for consideration:-

"Whether the Appellate Court has erred in

appreciating the evidence, allowing the

appeal and acquitting the respondent -

accused?"

12. The answer to the above point is in the

'Affirmative' for the following reasons.

13. A mandatory presumption is required to be

raised in respect of Negotiable Instrument in terms of

Section 118 (b) of the Act. Section 139 of the Act merely

raises a presumption that the cheque has been issued

for discharge of any debt or other liability. The

proceeding under Section 138 of N.I. Act is quasi

criminal in nature. In these proceedings, proof beyond

reasonable doubt is subject to presumptions envisaged

under Sections 118, 139 and 146 of N.I. Act. In the

recent decision in the case of P. Mohanraj and others

vs. M/s. Shah brothers Ispat and connected cases

decided on 01.03.2021 (LL 2021 SC 120) the Hon'ble

Supreme Court has observed thus "Section 138

proceedings can be said to be a 'Civil Sheep' in a

"Criminal Wolf" clothing.

14. An offence under Section 138 of N.I. Act is

committed not on dishonor of cheque, but on failure of

drawer of the cheque to make payment within 15 days

from the date of receipt of notice of dishonor. An

essential ingredient of Section 138 of N.I. Act is that the

cheque in question must have been issued towards a

legally enforceable debt. Sections 118 and 139 of the

Act envisage certain presumptions. Under Section 118

of the Act, a presumption shall be raised regarding

consideration, date, transfer, endorsement and

regarding holder in the case of Negotiable Instruments.

Even under Section 139, a rebuttable presumption shall

be raised that the cheque in question was issued

towards discharge of legally enforceable debt.

15. In the case of Rangappa vs. Shri Mohan

reported in (2010) 11 SCC - 441, the Hon'ble Apex

Court has held as under:

"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhana Bhat may not be correct.

However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.

     27.xxx xxx

     28.    In     the   absence         of    compelling

justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has

to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."

16. In the light of the above decision, the case on

hand is to be considered. PW.1 - complainant has

deposed that she was working as Superintendent in

institution run by the accused viz., Mahatma Jyotibha

Phule Padavi Mahavidyalaya. On the request of accused

for hand loan of Rs.7,00,000/- for improvement of

institution and business necessities, she has advanced

a sum of Rs.7,00,000/- to accused on 10.06.2009 by

pooling out funds from her family members and

relatives. The accused agreed to repay the loan within

six months. After six months, the accused did not repay

the loan. After repeated persuasion accused issued

Ex.P.1 - Cheque dated 15.03.2010 for Rs.7,00,000/- to

the complainant drawn on Canara Bank, Subramany

Nagar, Bengaluru. She has presented the cheque for

encashment, but cheque returned unpaid with

endorsement 'account closed by drawer' as per Ex.P.2 -

Bank Endorsement. Thereafter, the complainant has

issued Ex.P.4 - legal notice dated 27.03.2010 to

accused to his both addresses. Notices were served on

him and postal acknowledgments are at Exs.P.5 and 6.

The accused issued reply notice as per Ex.P.7.

17. The accused has taken multifold defenses.

PW.1 was cross-examined on her financial capacity,

alleged loss of cheque by accused, lodging of police

complaint and difference in ink used for writing Ex.P.1.

However, it is noted that accused has not disputed his

signature on the cheque. PW.1 was cross-examined on

different aspects of defense. One of the prominent

defences urged is loss of cheque. In this connection

accused heavily relied on the police complaints that he

claims to have lodged to Subramanya Nagar Police

Station, Bengaluru and Chowk Police Station, Gulbarga.

The copies of complaints are at Ex.D.1 and Ex.D.6.

Ex.D.1 is dated 19.09.2009 and Ex.D.6 is dated

26.09.2009. In Ex.D.1 the accused has asserted that he

had seen that he had kept his cheque book in his bag

before leaving Gulbarga to Bengaluru. After reaching

Bengaluru on 14.09.2009, he found that cheque book

was missing. Therefore, the complaint was lodged.

Whereas, in Ex.D.6 it is alleged that on 11.09.2009,

locker key and cheque book pertaining to Account

No.26115525, standing in the name of Jai Bheema

Gade, Kannada Daily, Bengaluru Edition, which he had

kept on his office table was misplaced. Accused has also

placed reliance on news paper publication in

Sanjeevani, evening daily published from Gulbarga and

Bengaluru dated 12.09.2009, it is stated that he had

lost the cheque books containing leaves bearing

No.685251 to 685300. The news paper publication is

produced at Ex.D.7 and Ex.D.8. The accused has issued

Ex.P.7 reply dated 31.03.2010 to the legal notice issued

by the complainant. A specific allegation was made

against the complainant that cheque bearing No.685253

(Ex.P.1) was stolen by her. There is no suggestion in

that regard in the cross-examination of PW.1. The

accused has also not stated anything in his evidence in

that regard. On 11.09.2009 memos issued by the

accused to his employees inter-alia requesting them to

return the cheque book in case same is traced. A copy

of memo produced at Ex.D.2. In the said memo, it is

stated that accused has lost cheque books and locker

key in his office. If accused had really known that the

complainant stolen the cheque book what made the

accused to keep quiet without informing to the police as

he had already lodged the complaint with regard to loss

of cheque book, but, he has not done so. No documents

were produced by the accused to show that even

thereafter he has lodged the complaint against the

complainant alleging theft.

18. DW.1 in the cross-examination categorically

stated that he took the cheque book with him to

Bengaluru. Apart from cheque book one he had lost, he

did not lose anything. He further stated that he had lost

one cheque book out of 4 to 5 cheque books, which he

had in his possession when he was at Bengaluru. The

accused gave memo to the staff of his college. But they

have given reply to the memo. The accused did not get

suspicion on complainant for not having replied the

memo. Accused gave another notice to the complainant

on account of her absence to duty and failure to give

reply to the memo, but the copy of the same was not

produced.

19. The accused has examined two witnesses as

DWs.2 and 3 who are admittedly his employees working

in the institution run by him. They testified in Court

only to the limited extent of alleged loss of cheque book

and locker key, issuance of memo and reply thereto.

They have deposed that during 2009 accused gave

memo to the employees working in his educational

institution including the complainant, calling for

explanation in connection with loss of his cheque book

and locker key. They have submitted reply to the memo.

The reply submitted by DW.2 and DW.3 are at Ex.D.4

and Ex.D.5. In the cross-examination they have stated

that they being the employees working in the institution

run by accused, one can not expect them to depose

against accused. Their evidence is inconsistent to the

defense that the cheque book was lost in transit at

Bengaluru. Their evidence is against the defence of the

accused that he lost the cheque book in Bengaluru.

20. The accused at one breath asserts that his

cheque book and locker keys were misplaced in his

office at Gulbarga and on the other he contended that

the bag containing cheque book was lost at Bengaluru

during September 2009. DW.2 and DW.3 were

examined by accused to show that memo was issued to

them with regard to loss of cheque book and locker keys

in his office at Gulbarga. Ex.P.7/Ex.D.10 reply was

issued by the accused to the complainant stating that

the complainant stolen the cheque, admittedly no

complaint was lodged against her in that regard.

21. It is the evidence of DW.1 that he took the

cheque book to Bengaluru with him and he had carried

4-5 cheque books to Bengaluru and one of the cheque

book was lost. Though complaint is lodged at Bengaluru

and Gulbarga as per Ex.D.1 and Ex.D.6, no case has

been registered and FIR was lodged. The very

inconsistency of defence with regard to alleged theft or

loss of cheque goes to show that there is no iota of truth

in it. The said defence appears to have been taken only

for the purpose of this case. There is no explanation by

the accused as to how Ex.P.1 - cheque came to the

hands of complainant that too with his admitted

signature. It is not the case of the accused that he has

lost signed cheque. The accused nowhere explained as

to what made him to keep the signed cheque along with

other cheques. It is also not the case of accused that he

had kept cheque book with all the cheques signed.

Accused not produced any document to show that he

has intimated his banker about loss of entire cheque

book. Therefore, conduct of the accused creates doubt

with regard to version of loss of cheque book. Therefore,

alleged loss of cheque book is not worth to be believed.

There is no evidence on record to say that the

complainant had access to cheque books and other

bank documents of accused. No suggestions were made

in the cross-examination of PW.1 that, complainant had

access bank documents such cheque books belonging to

the accused. In the cross-examination of PW.1 it is

elicited that during relevant point of time the

complainant and her close relatives did not had

sufficient bank balance. It is also elicited that neither

her husband nor her brothers issued cheque to her. But

that does not mean that she has not at all received

money from her relatives at all. The complainant's

contention was that she could pool out money from her

close relatives. Admittedly, one of her brothers is a

Teacher, another brother is running finance and one

brother is practicing law at Bengaluru since 08 years

and her father worked as Work Inspector with PWD and

her mother had deposits with Industrial Co-operative

Bank. It was also elicited in the cross-examination that

her husband was working in Police Department as

Wireless Operator and complainant is the only daughter

to her parents. Therefore, contention of the complainant

that she has pooled out money from her brothers,

husband and mother can be believed. Therefore, the

case of the complainant that she could pool out funds

from her relatives is probable and acceptable.

22. The accused has not at all denied his

signature on Ex.P.1. The accused has contended that

other writings on Ex.P.1 do not belong to him. PW.1

admitted hand writing on Ex.P.1 is not of accused. It is

not objectionable or illegal in law to receive an inchoate

negotiable instrument duly signed by the maker despite

the material particulars are kept blank if done with an

understanding and giving full authority to the payee to

fill up the material contents as agreed upon. Such a

course of action in law cannot vitiate the transaction

nor can invalidate the negotiable instrument issued and

such transaction fully binds the maker of instruments

to the extent it purports to declare.

23. In the recent decision in the case of M/s.

Kalemani Tax vs. Balan (Crl.A.No.123/2021) (LL

2021 P.75) decided on 10.02.2021, the Hon'ble Apex

Court has observed that "Even a blank cheque leaf

voluntarily signed by the accused would attract the

presumption under Section 139 of N.I. Act."

24. In the light of absence of dispute regarding

signature on Ex.P.1, it is for the accused to explain that

he has neither authorized the complainant to fill up the

material particulars nor there was an understanding

that amount mentioned in cheque agreed to be paid. His

defense of alleged loss/theft of cheque has not been

successfully proved by accused. It shall be presumed,

unless the contrary is proved, that the holder of a

cheque received the cheque, of the nature referred to in

Section 138 of N.I. Act for the discharge, in whole or in

part, of any debt or other liability. The effect of these

presumptions is to place the evidential burden on the

accused of proving that the cheque was not issued

towards the discharge of any liability.

25. Presumptions are rules of evidence and do

not conflict with the presumption of innocence, because

by the latter all that is meant is that the prosecution is

obliged to prove the case against the accused beyond

reasonable doubt. The obligation on the prosecution

may be discharged with the help of presumptions of law

or fact unless the accused adduces evidence showing

the reasonable possibility of the non-existence of the

presumed fact. The fact is said to be proved when, after

considering the matters before it the court either

believes it to exist or considers its existence so probable

that a prudent man ought, under the circumstances of

the particular case, to act upon the supposition that it

exists.

26. The Trial Court on appreciating the evidence

on record has rightly held that the complainant has

established that the cheque in question was issued for

discharge of debt and accused has failed in all the

attempts to make a probable defense which would

falsify the case of prosecution. Therefore, the Trial Court

has rightly convicted the respondent - accused for the

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

Appellate Court without appreciating the evidence in

proper perspective and on assumption has held that the

complainant has not proved that Ex.P.1 - Cheque

issued towards payment of legally enforceable debt. The

said finding of the Appellate Court is erroneous.

Therefore, the judgment passed by the Appellate Court

in Crl.A.No.18/2013 dated 16.06.2014 required to be

set-aside and judgment passed in C.C.No.3811/2010

dated 08.03.2013 convicting the respondent - accused

requires to be upheld. In the result, the following:-

ORDER

The appeal is allowed.

The judgment dated 16.06.2014 passed in

Crl.A.No.18/2013 by the IV Addl. District and Sessions

Judge, Gulbarga is set-aside. Consequently, the

judgment passed by the IV Addl. Civil Judge (Jr. Dn)

and JMFC, Gulbarga in C.C.No.3811/2010 dated

08.03.2013 convicting the respondent - accused for the

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

sentence passed therein is affirmed.

The respondent either pay the fine, or serve the

sentence in compliance with the judgment dated

08.03.2013 passed by the IV Addl. Civil Judge (Jr. Dn)

and JMFC, Gulbarga in C.C.No.3811/2010.

Sd/-

JUDGE KJJ