Shriram Transport vs Ashok S/O Shankreppa Hugar
2021 Latest Caselaw 3405 Kant

               IN THE HIGH COURT OF KARNATAKA
                       DHARWAD BENCH

        DATED THIS THE 25TH DAY OF SEPTEMBER, 2021

                             BEFORE

        THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR

               CRIMINAL APPEAL NO.100184/2015

Between:

Shriram Transport Finance Co. Ltd.,
Gadag Branch,
Rept. By its GPA Holder,
Sharad Kumar Mohan Rao Bommanagi,
Age:36 years, Occ:Asst. Manager,
R/o:Gadag.
                                                     ...Appellant

(By Sri.R.H.Angadi, Advocate)

And:

Ashok S/o Shankreppa Hugar,
Age about 40 years, Occ:Business,
R/o Kalasapur,
Tq & Dist:Gadag.
                                                     ...Respondent
(By Sri.Sabeel Ahmed, Advocate (Amicus Curiae))

       This appeal is filed under section 378(4) of Cr.P.C. praying
to allow the appeal, to set-aside the impugned judgment and order
of acquittal passed in CC No.534/2014, dated 01.08.2015, passed
by the Ist Additional Civil Judge and JMFC I Court Gadag and
thereby convict the respondent/accused accordingly for the offence
punishable under Section 138 of NI Act, to call for the records and
to grant other relief as deemed fit in the facts and circumstances
of the case in hand.
                               2


       This appeal having been heard and reserved for judgment
on 21.09.2021, coming on for 'Pronouncement of Judgment' this
day, the court delivered the following:

                          JUDGMENT

This appeal is filed by the appellant/complainant

under Section 378(4) of Cr.P.C. against the judgment

and order of acquittal dated 01.08.2015 passed by the I

Additional Civil Judge and JMFC I Court, Gadag in

C.C.No.534/2014, wherein the learned magistrate has

acquitted the accused/respondent for the offence

punishable under Section 138 of NI Act, 1881.

2. For the sake of convenience parties herein

are referred to their original ranks occupied by them

before the trial Court.

3. The brief factual matrix leading to the case

are that accused has availed financial assistance from

the complainant for purchase of Mahindra vehicle of

2011 model bearing registered No.KA.26/TA-4266 by

executing the agreement of hypothecation and total

value of the agreement is Rs.4,56,280/-. It is also

specifically asserted that he has agreed to repay the

loan amount in periodical installments, but he has

defaulted in payment of periodical installments and

finally became due to the complainant - Company for a

sum of Rs.3,60,000/-. It is alleged that in discharge of

the said amount he has issued a cheque for

Rs.3,60,000/- in favour of the complainant and when

the said cheque was presented, it was bounced for

insufficient funds. Hence, after issuing the notice, this

complaint came to be lodged. After lodging the

complaint the learned magistrate has taken cognizance

and sworn statement of the authorized officer was

recorded. Then he has issued process and accused has

appeared through his counsel and was enlarged on bail.

He has denied the accusation made against him. Then

GPA holder-officer of the complainant is examined as

Pw.1 and complainant has also placed reliance on Ex.P1

to Ex.P7. Then the statement of the accused under

Section 313 of Cr.P.C. is recorded to enable the accused

to explain the incriminating evidence appearing against

him in the case of the prosecution and the case of

accused is of total denial. Then after hearing the

arguments, the learned magistrate has found that the

complainant has failed to prove that the cheque Ex.P1

was issued towards legally enforceable debt and

observed that blank cheque was taken at the time of

execution of the agreement itself and hence, it cannot

be enforced and thereby acquitted the accused. Being

aggrieved by this judgment of acquittal the complainant

has filed this appeal.

4. Heard the learned counsel for the appellant.

Respondent is unrepresented and as such looking to this

aspect, Sri.Sabel Ahmed, learned counsel is appointed

as Amicus Curiae to assist the Court. Heard the

arguments advanced by the learned amicus curiae also.

I have also perused the records in detail.

5. The learned counsel for the appellant would

contend that the judgment and order of the Court below

is erroneous, perverse and capricious and calls for

interference. It is submitted that Court below has not

appreciated the facts involved in this case and has not

properly appreciated the oral and documentary

evidence. That no where in the agreement there is

observation that after repossession of the hypothecated

vehicle the agreement comes to end and the said

observation is erroneous. That the observation of the

trial Court that the complainant had issued post dated

cheque at the time of execution of the agreement, is

without any evidence and the said observation is

erroneous and lead to miscarriage of justice. That

observation regarding GPA is also improper and on the

same documents initially cognizance was taken by

issuing process and now the same documents have been

disputed. That the trial Court has lost sight that the

signature on the cheque has been admitted and the

presumption under Section 139 of NI Act is in favour of

the complainant but trial Court has failed to appreciate

these aspects and failed to note presumption under

Section 118 and 139 of NI Act have not been rebutted.

That the reasonings assigned and the conclusion arrived

by the Court below is not proper and reasonable one.

That the trial Court has wrongly applied principles in

respect of the citations relied by other side and during

the observations, it has wrongly observed that the

cheque is post dated which has resulted in miscarriage

of justice and hence, he seeks for allowing the appeal by

setting aside the impugned judgment.

6. Per contra the learned amicus curiae has

supported the case of the trial Court contending that the

complainant has not maintained proper accounts and the

date of availment of loan and exact loan is no where

pleaded in the complaint. How the total agreement value

is arrived at Rs.4,56,280/- is not at all explained by the

complainant and the vehicle was also seized illegally

without notice and sold without giving the notice by

mutual agreement. It was sold without intimation and

even the vehicle inventory was not done at the time of

seizure of the vehicle. He would contend that all these

aspects have been considered by the trial Court and the

legally enforceable debt itself is not established and

hence, the trial Court is justified in acquitting the

accused and as such he would contend that judgment of

acquittal passed by the trial Court does not call for any

interference. Hence, he would seek for dismissal of the

appeal.

7. Having heard the arguments and perusing

the records, now the following point would arise for my

consideration:

Whether the judgment acquittal passed by the trial Court is sustainable in the eye of law?

8. It is to be noted here that according to the

complainant the accused has availed loan for purchase

of Mahindra vehicle bearing No.KA.26/TA-4266 by

executing a loan cum hypothecation agreement. Very

interestingly, complainant all along simply asserted that

total agreement value is Rs.4,56,280/- but they did not

assert as to what is the amount of the loan advanced for

purchase. This pleading is completely silent. Ex.P7 is the

statement of account produced. It discloses that loan

amount is Rs.3,50,000/- but, it is asserted that total

agreement value is Rs.4,56,280/- and these anomalies

are not at all explained by the complainant. Pw.1 who

claims to be the authorized officer pleads ignorance

about all these aspects. Even Ex.P7 is not a document

which is required to be admitted as it is a notarized copy

and the document attested by authorized officer is also

not produced.

9. On perusal of Ex.P7, it is evident that certain

installments were paid but where they were credited and

how they have adjusted is not forthcoming from Ex.P7.

Even the sale proceeds were credited, but, again the

balance is shown to be Rs.3,50,000/- and when the loan

itself is availed in 2011 to the extent of Rs.3,50,000/-

and when the vehicle was seized and sold, again the

same amount of loan is said to have been pending and

this is not at all explained by the complainant. Hence, it

is evident that the complainant has not produced proper

accounts.

10. Pw.1 claims to be the Manager of the

Company and he also simply asserts that agreement

value is Rs.4,56,280/- and did not explain what is exact

the loan advanced. He is not prepared to explain as to

how the agreement value is Rs.4,56,280/- and the

pleadings are also silent regarding the date of availment

of loan.

11. On the contrary, in the cross examination

Pw.1 admitted that the loan of Rs.3,50,000/- was

advanced. If that is the case then how the agreement

value has come to Rs.4,56,280/- is not at all

forthcoming. No explanation is given in the entire

evidence. The date of advancement of the loan is also

not forthcoming. It is alleged that the accused has

committed default. He claims that the vehicle was seized

for default in payment and sold for Rs.2,70,000/-. The

vehicle was alleged to have been seized within 1 year

and sold it for Rs.2,70,000/- out of the loan amount of

Rs.3,50,000/-. Further certain payments were also made

by the accused, then there is no evidence as to how

again Rs.3,50,000/- is shown as balance that too when

the cheque is issued in 2013 itself within 2 years.

12. Pw.1 claims that he do not know how the

payment was made by the accused at the time of

purchase of vehicle. Further in his cross examination he

admits that before seizing of the vehicle notice was

issued, but no document is forthcoming for having

seized the vehicle by issuing notice. Even they have not

produced to whom the vehicle was sold and how it was

sold. There is no evidence as to when the vehicle was

exactly seized, what was the condition of the vehicle and

to whom it was sold, whether it was sold by auction or

by any mutual agreement is not at all forthcoming.

Hence, it appears that the complainant has managed the

things amongst themselves and disposed of the vehicle.

Complainant in the complaint no where asserted

regarding seizure of the vehicle though Pw.1 claims that

he has intimated the sale to accused No.1 orally. The

said contention cannot be accepted as the company is

dealing with the matter and it is not accepted that

company deals orally.

13. Further on perusal of Ex.P6 i.e., loan cum

hypothecation agreement paragraph No. 1.7 deals with

issuing post dated cheques in respect of the installments

due. Hence, the Clause in Ex.P6 itself disclose that the

complainant has obtained post dated cheques. Hence, it

is evident that the cheque dated 19.12.2013 is obtained

by the complainant at the time of execution of the

agreement Ex.P6 itself and it is a post dated cheque.

Hence, in view of the decision of the Hon'ble Apex Court

reported in 2014 12 SCC 539 in the case of

M/s.Indus Airway Pvt. Ltd. and others vs. M/s.

Magnum Aviation Pvt. Ltd. and another, wherein the

Hon'ble Apex Court has clearly observed that the post

dated cheque issued cannot be considered towards

discharge of legally enforceable debt or otherwise

liability and consequently the offence for dishonour of

cheque under Section 138 of NI Act is not attracted. The

evidence on record disclose Ex.P1 when compared with

Ex.P6, establish that it is the post dated cheque issued

at the time of execution of Ex.P1. Even that apart,

account statement itself discloses that no proper

account is maintained and Pw.1 does not know anything

about this.

14. Further the complainant is relying on Ex.P5 -

Power of attorney. At the first instance Ex.P5 is not a

certified copy, but, it is the notarized copy. Further it is

executed by the Managing Director in favour of Pw.1. It

is all along contended that the Managing Director was

authorized in this regard and the letter of authorization

is relied but again letter of authorization is issued by the

Managing Director himself and he claims that it is on the

basis of the resolution of the Company. But the

resolution of the company itself not placed on record to

show that the Managing Director was authorized to

execute the power of attorney. Hence, the authority of

Pw.1 is also questionable as he does not know anything

and power of attorney executed in his favour is also not

in accordance with law. Even the statement of the

account relied as per Ex.P7 does not explain the factual

matrix as to what is the exact loan amount, when it is

availed, what are the other ancillary charges etc., The

date of availment of loan is not clearly mentioned in the

complaint. Further Ex.P7 statement of account is also

notarized copy and not certified by the accountant of the

company. There is no evidence as to when exactly the

vehicle was seized and admittedly no notice was issued

to the complainant and after seizure, the hypothecation

agreement came to an end and again the complainant

wanted to proceed against the accused. However, when

the vehicle was sold is also not forthcoming. Hence, it is

evident that the documents produced by the

complainant are not at all maintained in proper way and

they have failed to establish legally enforceable debt to

the tune of Rs.3,60,000/- as referred in Ex.P1. Merely

admission of signature of Ex.P1 does not assist the

prosecution in proving the guilt of the accused. Though

the presumption is in favour of the complainant, the

evidence and cross examination of Pw.1 and the

documents itself disclose that the presumption stands

rebutted. No material evidence is placed by he

prosecution in this regard.

15. Learned counsel for the appellant has placed

reliance on unreported decision of this Court in

Crl.A.No.100213/2015 and Crl.A.No.100186/2015

along with connected cases and argued that in all

these matters in similar circumstances the appeal came

to be allowed. But the facts and circumstances of said

cases are entirely different and in the instant case the

statement of account, seizure of the vehicle, non

averment of exact loan are issues and hence considering

the different facts and circumstances, the principles

enunciated in the above referred decision cannot be

made applicable and they cannot act as a precedent in

this case. Hence, looking to these facts and

circumstances the judgment of the trial Court cannot be

said to be erroneous or illegal so as to call for any

interference by this Court. The learned magistrate has

considered all these aspects in proper perspective and

arrived at a just decision. Hence, the judgment of the

trial Court does not call for any interference and it is

sustainable under law. The Court places its appreciation

on the record of the assistance rendered by the amicus

curiae. Under such circumstances, I answer the point

under consideration in the affirmative.

Accordingly, I proceed to pass the following:

ORDER

The appeal is dismissed. The fees of amicus

curiae is fixed at Rs.5,000/-.

Sd/-

JUDGE

NS