M/S Sree Gokulam Chits And vs M.A.Zaulla Khan
2021 Latest Caselaw 3484 Kant

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        IN THE HIGH COURT OF KARNATAKA
                 AT BENGALURU

  DATED THIS THE 23RD DAY OF OCTOBER, 2021

                        BEFORE:

 THE HON'BLE MR. JUSTICE MOHAMMAD NAWAZ

       CRIMINAL APPEAL NO.2128 OF 2016
BETWEEN:

M/S SREE GOKULAM CHITS AND
FINANCE COMPANY PVT. LTD
NO.3, THIMMAIAH CHAMBERS
1ST CROSS ROAD, GANDHINAGAR
BENGALURU - 560 009
REPRESENTED BY ITS
LEGAL CLERK AND GPA HOLDER
H.M.RAJA
S/O MAHADEVA H.M
AGED ABOUT 28 YEARS
NOW THE PRESENT G.P.A HOLDER
NAVEEN KUMAR.V
S/O VENKATESH
AGED ABOUT 22 YEARS                         ...   APPELLANT

[BY SRI B.ASHOK KUMAR, ADVOCATE
 AND SRI M.ABDUL RAHIMAN, ADVOCATE]

AND:

M.A.ZAULLA KHAN
S/O RAHMAN KHAN
AGED ABOUT 56 YEARS
R.K.ENTERPRISES
NO.5, VIJYALAKSHMI COMPLEX
M.R.LANE, SJP ROAD CROSS
BENGALURU - 560 002                   ...     RESPONDENT

[BY SRI A.S.KULKARNI, ADVOCATE]
                            ***
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      THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF
CR.P.C., PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF
ACQUITTAL DATED 05.10.2016 PASSED BY THE XLII ADDL. C.M.M.,
BANGALORE      IN  C.C.NO.8023/2014   -   ACQUITTING     THE
RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I.ACT.

     THIS CRIMINAL APPEAL COMING ON FOR ADMISSION, THIS
DAY THE COURT DELIVERED THE FOLLOWING:

                           JUDGMENT

This appeal is preferred by the complainant against the

judgment and order of acquittal passed by the trial Court,

acquitting the accused/respondent of an offence punishable

under Section 138 of Negotiable Instruments Act, 1881 (for short

N.I. Act).

2. Brief facts of the case are that the complainant is a

company registered under the Companies Act, 1956 and

engaged in chits and finance business. The accused joined two

chits in chit group bearing No.J2H-946, tickets No.15 and 19 for

a sum of Rs.5,00,000/- each. He participated in both the chits

and became a successful bidder and received the prize amount

from the complainant company. After bidding the aforesaid two

chits, accused committed default in payment of the chit amount.

Hence, complainant requested the accused for repayment of the

chit amount. On insistence, the accused verified the account and

found that a sum of Rs.1,45,000/- each was due to the

complainant in respect of two chits and towards payment of the

said amount, accused issued a cheque bearing No.108240 dated

31.12.2012 for a sum of Rs.2,90,000/- drawn on HDFC Bank

Limited, Bannerghatta Road Branch, Bengaluru. The said cheque

was presented by the complainant to the drawee bank on

03.01.2013, which came to be dishonoured with an endorsement

"Account closed", on 04.01.2013. A legal notice was issued on

23.01.2013 through RPAD which was returned with postal shara

as "Not in Station". Since, the accused failed to repay the

amount, complaint was filed on 06.03.2013, alleging an offence

under Section 138 of N.I. Act.

3. Before the trial Court the complainant got examined

himself as PW.1 and got marked Exs.P1 to P10. The trial Court

after considering the entire evidence and material on record was

pleased to acquit the accused. Hence, this appeal.

4. The accused has not disputed that he joined two

chits in chit group belonging to the complainant. However, the

contention raised by him is that the said chit amount was repaid

in time but the cheque which was given as security in the

beginning was misused by the complainant.

5. Initial burden of proving the guilt of the accused lies

on the complainant. In the present case, a cheque dated

31.12.2012 said to have been issued by the accused for a sum of

Rs.2,90,000/- towards the discharge of legal liability is said to be

dishonourned and therefore it is alleged that the accused has

committed an offence punishable under Section 138 of N.I. Act.

The complainant is examined as PW.1. The complainant has got

marked Exs.P1 to P10. Ex.P1 is the certified copy of the GPA

executed by the complainant-company in favour of PW.1. Ex.P2

is the certified copy of Board Resolution, Ex.P3 is the cheque,

Ex.P3(a) is the signature of the accused, Ex.P4 is the bank

memo, Ex.P5 is the office copy of the legal notice, Ex.P5(a) is the

postal receipts, Ex.P5(b) is the returned postal receipts,

Ex.P5(bb) is the copy of the legal notice found in the returned

postal cover, Exs.P6 & 7 are two vouchers, Exs.P8 & 9 are two

copies of account extract, Ex.P10 is the complaint.

6. PW.1 in his evidence has deposed that he has no

personal knowledge about the chit transaction and he is deposing

on the basis of the documents. In the complaint there is no

averment about the date of commencement and termination of

chit and the date on which the accused became a defaulter in

payment of chit amount and the particulars as to what is the

principal amount and the amount towards the interest. In the

cross-examination of PW.1, it is elicited that a chit was

commenced on 13.10.2007 and terminated on 13.05.2009.

According to the complainant, cheque was issued by the accused

on 13.12.2012 to discharge the liability. It is also not stated as

to what was the principal amount and interest accrued. These

particulars are also not stated by PW.1 in his evidence. It is not

forthcoming as to how many installments were paid by the

accused and from which month the accused failed to pay the

installment.

7. As per the cross-examination conducted by the

defence, the disputed cheque dated 13.12.2012 was issued in

respect of the chit which was closed on 13.05.2009. A contention

was raised by the defence that, to attract the penal provisions

under Section 138 of N.I. Act, it is essential that the dishonoured

cheque should have been issued in discharge, wholly or in part or

any other debt or liability of the drawer to the payee. The debt

or other liability means legally enforceable debt or other liability.

Therefore, the cheque which is issued in respect of a transaction

which was prior to 13.05.2009 cannot be said to be a legal

enforceable debt. In this connection, the learned counsel for

respondent has relied on a judgment of this Court in 'K.V.Subba

Reddy vs. N.Raghava Reddy' passed in Criminal Appeal

No.545/2010 decided on 28.02.2014, wherein, the observations

made by the Hon'ble Apex Court in Special Leave Appeal

(Criminal Appeal No.1785/2001) in the case of 'Sasserivil Joseph

vs. Devasaia' has been extracted which reads as under:

"We have heard learned counsel for the petitioner. We have perused the judgment of the High Court of Kerala in Criminal Appeal No.161 of 1994 confirming the judgment/order of acquittal passed by the Additional Sessions Judge, Thalassery in Criminal Appeal No.212 of 1992 holding inter alia that the cheque in question having been issued by the accused for due which was barred by limitation the penal provision under Section 138 of Negotiable Instruments Act is not attracted in this case.

On the facts of the case as available on the records and the clear and unambiguous provision in the explanation of Section 138 of the Negotiable Instruments Act the judgment of the lower appellate Court as confirmed by the High Court is unassailed.

              Therefore,      the    special   leave        petition   is
     dismissed."

8. From the material on record it cannot be said that

the accused was due to pay an amount of Rs.2,90,000/- as on

31.12.2012 and the cheque in question was issued by the

accused in discharge of a legally enforceable debt. There is no

illegality committed by the trial Court in acquitting the accused.

Hence, the appeal is dismissed.

Sd/-

JUDGE

HB/-