Murtuja vs Zakeer
2021 Latest Caselaw 3336 Kant

                             1        CRL.A.No.200123/2017




           IN THE HIGH COURT OF KARNATAKA
                   KALABURAGI BENCH

     DATED THIS THE 16TH DAY OF SEPTEMBER, 2021

                          BEFORE

        THE HON'BLE MRS. JUSTICE J.M.KHAZI

         CRIMINAL APPEAL No.200123/2017


BETWEEN:

Murtuja S/o Khajapatel Bagali,
Aged about 40 yers, Occ: Business,
(Karnataka Jewelers)
R/o J.M.Road, Vijayapur.
                                                 ... Appellant

(By Sri. Shivanand V.Pattanshetti, Advocate)


AND:
Zakeer S/o Ibrahimsab Indikar,
Age: Major, Occ: Govt. Servant,
R/o Rajput Galli, Near Arkat Ali Darga,
J.M.Road, Vijayapur.
                                               ... Respondent
(By Sri. G.G.Chagashetti, Advocate)

      This Criminal Appeal is filed under Section 378(4) of
Cr.P.C. with a prayer to allow the appeal by setting aside
judgment and order dated 06.07.2017 of the learned IIIrd
Addl. JMFC Vijayapura in Criminal Case No.698/2015,
acquitting the respondent and to convict the respondent
for the offense punishable U/s 138 of N.I.Act and impose
fine twice the amount of dishonored cheque along with
appropriate sentence of imprisonment.
                                    2          CRL.A.No.200123/2017




      This appeal having been heard and reserved on
01.09.2021, coming on for pronouncement of judgment
this day, J.M.KHAZI J., delivered the following:

                             JUDGMENT

Being aggrieved by the dismissal of complaint filed

under Section 200 of Code of Criminal Procedure

(hereinafter referred to as 'Cr.P.C.' for short), 1973, for

the offence punishable under Section 138 of Negotiable

Instruments Act (hereinafter referred to as 'N.I.Act' for

short), 1881, against the accused, complainant has filed

this appeal under Section 378(4) of Cr.P.C.

2. After due service of notice, respondent has

appeared through counsel.

3. For the sake of convenience, the parties are

referred to their ranks before the Trial Court.

4. It is the case of the complainant that he is a

business man whereas accused is a Government teacher.

They are close friends since for the last few years. In the

month of April-2014, accused approached complainant

with a request to advance a sum of `.5,10,000/- by way of

hand loan to meet his urgent family necessity. Since

complainant is having complete trust in the accused and to

over come his difficulty, he extended hand loan of

`.5,10,000/- to the accused. Accused promise to repay

the same within six months.

5. It is further case of the complainant that after

six months when accused did not choose to repay the

amount, on his repeated request and demand accused

issued cheque No.686146 dated 09.12.2014 for

`.5,10,000/- drawn on State Bank of Hydrabad, Bijapur

branch with a request to present the same for collection.

When complainant presented the same, it was returned

with endorsement "insufficient funds". Inspite of issue and

service of legal notice dated 26.12.2014 calling upon the

accused to pay the amount due under the cheque, accused

has not complied with the said request and therefore the

complaint.

6. After due service of summons, accused

appeared through counsel and contested the case.

7. In support of his case, complainant has

examined himself as PW1 and relied upon the Ex.P1 to P5.

Through the cross examining of PW1, the accused has got

marked one document as Ex.D1.

8. In his statement under Section 313 of Cr.PC

accused has denied the incriminating evidence against

him. He has not chosen to lead evidence on his behalf.

9. After hearing the arguments on both sides, the

trial court dismissed the complaint on the ground that the

complainant has failed to prove that he had advanced loan

of `.5,10,000/- to the accused. On the other hand, the

accused has proved that the cheque in question was issued

by way of security to the land transaction between the

complainant and brother of the accused.

10. Being aggrieved by the impugned judgment

and order of acquittal, the complainant has filed this

appeal on the following grounds.

i) In view of presumption under Section 118

and 139 of N.I.Act, issue of cheque and dishonor

of the same is sufficient to constitute the offence

under Section 138 of N.I.Act. In the instance

case, without any rebuttal evidence by the

accused, the trial court has wrongly held that

the accused has rebutted the presumption.

Therefore, the findings of the trial court is liable

to be set aside.

ii) The trial court misdirected itself by relying

on the statement of the complainant in the cross

examination, which is a statement relating to

the year 2013 where as the cheque in question

was issued on 19.12.2014. Therefore, the

admission alone is not sufficient to rebut the

presumption available in favour of the

complainant.

iii) Since the accused has admitted the fact of

issue of cheque and his signature, it is necessary

to raise a initial presumption in favour of the

complainant that the cheque in question was

issued towards repayment of any debt or

liability. Therefore, the findings of the trial court

are perverse and not inconsonance with the

provisions of the N.I.Act.

iv) The trial court has wrongly casted the

burden on the complainant. It has failed to

consider the evidence of complainant in its

entirety. The trial court has wrongly casted the

burden on complainant by relying upon Section

101 of Indian Evidence Act.

11. On the other hand, the learned counsel

representing accused has supported the impugned

judgment and order and submitted that after the accused

has successfully rebutted the presumption arising under

Section 139 of N.I.Act, the trial court has rightly placed the

onus on the complainant to prove that he had the financial

capacity to advance `.5,10,000/- to the complainant and in

fact he has so advance the said amount and on the failure

of the complainant to discharge the onus, the trial court

has rightly dismissed the complaint and prays to dismiss

the appeal also.

12. Heard the arguments and perused the records.

13. It is not in dispute that complainant and

accused are known to each other. It is definite case of

the complainant is that to meet urgent family necessity,

accused has borrowed a sum of `.5,10,000/- from him

promising him to repay the same within six months. After

expiry of six months when he did not come forward to

repay the said amount, at his insistence accused has

issued a cheque which ultimately came to be dishonored

on the ground of insufficient funds. Admittedly, accused

has not sent any reply to the legal notice. During the

course of cross examination of the complainant, accused

has set up a defence that complainant has sold agricultural

land to the brother of accused and at that time by way of

security complainant has issued a blank cheque and after

completion of the sale transaction, the said cheque was

not returned and misusing the same, complainant has filed

the criminal case. The accused has also set up a defence

that complainant never had the financial capacity to

advance a sum of `.5,10,000/- to the accused and in fact

he had no such financial necessity to borrow the said sum

from the complainant. In the light of these contentions, it

is to be examined whether the trial court has rightly

dismissed the complaint and whether it is a fit case calling

for interference by this court.

14. Before going to the merits of the case, it is

necessary to refer to Section 139 of the N.I.Act which

deals with the presumption in favour of the holder of a

cheque. It reads as under:-

"139. Presumption in favour of holder.- 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 for the discharge, in whole or in part, of any debt or other liability."

15. The reading of Section 139 would pose a

question as to whether the presumption referred to in

Section 139 is only with regard to the fact that the cheque

in question is issued towards discharge in whole or in part

of any debt or other liability or it also includes a

presumption regarding the existence of a legally

enforceable debt or liability. In the decision reported in

2008 AIR SCW 738 (Supreme Court) in the matter of

Krishna Janardhana Bhat V/s Datatraya G. Hegde, it

was held that Section 139 merely rises a presumption in

favour of holder of cheque that same has been issued for

discharge of any debt or other liability and existence of

legally recoverable debt is not a matter of presumption

under Section 139 of N.I.Act. However, this controversy

was set at rest by the Full Bench of the Hon'ble Supreme

Court in the case reported in (2010) 11 SCC 441 in the

matter of Rangappa V/s Sri Mohan, wherein it is held

that the presumption under Section 139 of N.I.Act is not

only to the effect that the cheque in question was issued

towards discharge in whole or in part of any debt or other

liability, but also includes presumption regarding the

existence of a legally enforceable debt or liability.

16. In the above discussion, the Hon'ble Supreme

Court further held that:

"Section 139 is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a devide to prevent undue delay in the course of litigation.

However, it must be remembered that the offence made punishable by Section 138 can be

better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is unsually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge as unduly high standard of proof.

The 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. 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."

17. Thus, with both presumptions acting in favour

of the complainant, it is to be examined whether the

accused has succeeded in rebutting the presumption and

thereby shifting the onus on the complainant to prove that

he had financial capacity to advance the amount under the

cheque and in fact, he has advanced the same to the

accused.

18. As already noted, in the complaint, the

complainant has stated that accused borrowed a

`.5,10,000/- from him to meet his family necessity.

However, during the course of his cross examination,

complainant who examined as PW1 has deposed that

accused borrowed the said amount for purchasing a house.

Accused has taken up a specific defence that complainant

has neither the capacity to advance `.5,10,000/- nor the

accused had any such legal necessity to borrow

`.5,10,000/- from the accused. Consequently accused

has cross examined the complainant as to his financial

capacity to lend `.5,10,000/-. On this aspect, complainant

has stated that he is a real estate agent by profession, but

he has not maintained any account regarding his income

and expenditure from the said profession. Complainant

has also admitted that he has not produce any document

to show that at the relevant point of time he had

`.5,10,000/- to advance the same to the accused. On this

aspect, he has volunteered and stated that he was having

money which he has obtained by sale of agricultural land

to the brother of accused. In fact accused has produced a

photo copy of sale deed by which complainant has sold 1

acre 20 guntas to the brother of accused. It is marked

Ex.D1. As evident from this document, the said land was

sold a sum of `.90,000/- and the sale transaction is dated

11.09.2013.

19. During his cross examination, complainant has

admitted that in the sale deed the reason for selling the

land is stated to be financial constraint. At page 3 in the

last sentence, he has deposed that out of the sale

consideration, he has repaid loan of `.5,00,000/- and still

he is due to repay some amount. This piece of evidence of

the complainant indicates that when he sold agricultural

land to the brother of accused, he had some loans to repay

and utilizing the amount received through the sale of land

he has repaid the portion of the loan. Such being the

case, the complainant has failed to prove that out of the

sale consideration he has advanced the loan to accused

and he had financial capacity to advance `.5,10,000/- to

the accused. During the cross examination of the

complainant, the accused has elicited that the deliberations

for the sale were held about six months prior to the

execution of the sale deed and on account of carrying out

survey there was delay. He has admitted that during the

sale transaction, he demanded a cheque by way of security

and since the brother of the accused was not having a

cheque, accused issued the cheque at Ex.P1. The relevant

portion reads as under:-

"Rjâ DUÀĪÀ ¸ÀªÀÄAiÀÄzÀ°è DgÉÆæ¬ÄAzÀ ZÉP£ À ÄÀ ß ¨sz À v Àæ U É ÁV ¥Àq¢ É gÀÄvÉÃÛ £É JAzÀgÉ ¸Àj, ¸Àzj À ¸ÀªÀÄAiÀÄzÀ°è DgÉÆæAiÀÄ CtÚ£À ºÀwg Û À ZÉPï E®èzÀ PÁgÀt ¸Àzj À AiÀĪÀgÀÄ

DgÉÆæAiÀÄ ZÉP£ À ÀÄß ¤ÃrgÀÄvÁÛgÉ JAzÀgÉ ¸Àj, ¤¦-1£ÀÄß ¸ÁQëUÉ vÉÆÃj¸À¯ÁV ¸Àzj À ¢£ÀzA À zÀÄ ¤ÃrzÀ ZÉPï JAzÀÄ UÀÄgÀÄw¸ÀÄvÁÛg.É "

20. However, when suggested that it was a blank

cheque, the complaint has stated that it was filled. But, he

is unable to state who has filled the cheque, but admitted

that it does not bear the hand writing of the accused. In

fact in the next para, the complainant admitted that after

execution of the sale deed, the brother of accused did not

demand return of the cheque. Though he denied that no

financial transaction has taken place between him and the

accused, in the next sentence, he admitted that since

accused is working as teacher he had no necessity to take

hand loan from him. Thus, through the cross examination

of the complainant, the accused has establish that the

complainant had no financial capacity to lend and he had

no necessity to borrow `.5,10,000/- from him. On the

other hand, he has establish that the cheque in question

was issued by way of collateral security at the time of sale

transaction that took place between complainant and the

brother of the accused. Consequently, the accused has

rebutted both presumptions in favour of the complainant.

Thereby, the onus is shifted on the complainant to prove

his financial capacity and also the necessity of the accused

to borrow `.5,10,000/-. By not placing any evidence either

oral or documentary on record, the complainant has failed

to discharge the onus shifted on him.

21. The learned counsel representing the

complainant argued that the accused has not stepped into

the witness box and thereby has failed to rebut the

presumption acting in favour of the complainant. As held

by the Hon'ble Supreme Court in the matter of Kishan

Rao V/s Shankargouda, reported in (2018) 8 SCC 165

in order to rebut the presumption, it is not necessary for

the accused to step into the witness box. On the other

hand, he has successfully rebutted the presumption, by

cross examining the complainant and eliciting admission

through him.

22. Taking into consideration, the oral as well as

documentary evidence placed on record and in the light of

the admissions elicited through the cross-examination of

complainant, the trial court has rightly come to the

conclusion that the offence punishable under Section 138

of N.I.Act is not made out against the accused and

dismissed the complaint. Having regard to the facts and

circumstances of the case and the oral and documentary

evidence placed on record, I am of the considered view

that there is no perversity in the conclusions arrived at and

this is not a fit case to interfere with the finding arrived at

by the Trial Court.

23. In the result, I proceed to pass the following:

ORDER

The appeal filed by the complainant fails and

accordingly it is dismissed.

Sd/-

JUDGE

SMP