Nagaraj Alias Nagappa Karennavar vs Sri. Basalingayya Hiremath
2022 Latest Caselaw 2529 Kant

               IN THE HIGH COURT OF KARNATAKA
                       DHARWAD BENCH

           DATED THIS THE 16TH DAY OF FEBRUARY 2022

                                  BEFORE

           THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

                    CRL.P NO 101776 OF 2021

BETWEEN

NAGARAJ ALIAS NAGAPPA KARENNAVAR,
S/O. KAREPPA,AGED ABOUT 37 YEARS,
OCC WARD NO. 03, PLOT NO. 18,
3RD CROSS, BRAHAMAN CHETANA PARK
DODDANAYAKANAKOPPA DHARWAD-580008.

                                                     ...PETITIONER
(BY SRI.RAVI HEGDE, ADV.,)

AND

SRI. BASALINGAYYA HIREMATH,
S/O. BASAYYA HINDU, AGRICULTURIST,
AND AURVEDIC PANDIT, AGED ABOUT 55 YEARS,
R/O. KHB COLONY, BALLARI ROAD,
SIRAGUPPA-583121, DIST BALLARI.
                                                    ...RESPONDENT
(BY SRI.K.S.PATIL, ADV.,)

      THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C.,
SEEKING TO QUASH THE ENTIRE PROCEEDINGS INITIATED IN CC
NO.1414/2019, ON THE FILE OF CIVIL JUDGE AND JMFC AT
SIRAGUPPA,    AGAINST       THE     PETITIONER/ACCUSED   FOR   THE
OFFENCES PUNISHABLE U/S 138 OF N.I. ACT, VIDE DOCUMENT NO.1.


      THIS PETITION COMING ON FOR ADMISSION THIS DAY, THE
COURT MADE THE FOLLOWING:
                                    2




                                ORDER

The petitioner is before this Court calling in question

proceedings in C.C.No.1414/2019 pending before the Civil

Judge and JMFC, Siaguppa for offences punishable under

Section 138 of the Negotiable Instruments Act, 1881.

2. Heard Sri.Ravi Hegde, learned counsel for the

petitioner and Sri.K.S.PATIL, learned counsel for the

respondent.

3. Brief facts leading to the filing of the present petition

as borne out from the pleadings are as follows:

Petitioner and respondent-complainant claim to be

acquaintances. The respondent registers a complaint under

Section 200 of the Cr.P.C. alleging offences punishable under

Section 138 of the N.I.Act. The reason that triggered the

complaint is that the petitioner had approached the

respondent and has assured the respondent-complainant

that he would get him a job of Sub-Inspector of Excise by

using his influence and claims to have demanded money for

the same. The complaint further narrates that an amount of

Rs.5 lakhs was paid totally, Rs.2 lakhs each on two

occasions and a lakh later. In furtherance of the said

payment, the petitioner appears to have issued a cheque for

the said amount which when presented was dishonoured for

want of sufficient funds. This resulted in a legal notice being

caused upon the petitioner and later proceedings initiated for

offences punishable under the Act. Thus, the proceedings

initiated was for an amount that was allegedly paid by the

respondent on the alleged assurance of the petitioner getting

him a job. The learned Magistrate takes cognizance of the

offence and issues process to the petitioner. It is at that

stage, the petitioner knocks the doors of this Court in the

subject petition.

4. The learned counsel appearing for the petitioner

would submit that for invocation of Section 138 of the

N.I.Act, it should be a legally enforceable debt. The breach of

promise that too by a person who was never in the capacity

of getting a job can never mean it was a legally enforceable

debt.

5. On the other hand, the learned counsel appearing for

the respondent would contend that the petitioner lured the

respondent that he would get him a job of Sub-Inspector of

Excise and cheated him with the money as he failed to fulfil

the promise and in assurance of the receipt of the amount

the petitioner had issued the cheque and therefore, he is

liable to be prosecuted under the provisions of the Act.

6. I have given my anxious consideration to the

submissions made by the learned counsel for the parties and

perused the material on record.

7. The afore-narrated facts are not in dispute. Sections

138 and 139 of the N.I.Act recognizes legally recoverable debt

and imposes such presumption in favour of the holder of the

cheque. Illegal considerations or a contract which is opposed

to public policy entered into between the parties, even if a

cheque is issued in furtherance of such contract, would not

become a legally recoverable debt for initiation of

proceedings. The said principle is applicable to the case at

hand.

8. The Co-ordinate bench of this Court in the case of

R.PARIMALA BAI vs. BHASKAR NARASIMHAIAH1, has held

as follows:

"18. On careful perusal of the above said decisions, it is crystal clear that in order to attract Section 138 of the Negotiable Instruments Act, the ingredients of Section 138 have to be established primarily by the complainant by pleading in the complaint with regard to the existence of any legally recoverable debt or liability on the part of the accused. Even a semblance of doubt is raised with regard to the existence or non existence of legally recoverable debt, then also it should be established during the course of trial by means of pleading the facts and leading evidence. It is the defence taken up by the accused that there was no legally enforceable debt, and further that, it is not only the defence, but also the court has to examine whether on complete reading of the complaint itself whether any offence u/s.138 of the Negotiable Instruments Act is constituted or not. It is a very well recognized principle of criminal jurisprudence that, if on plain and meaningful reading of the complaint or the FIR, the allegations made in the complaint or in the FIR do not constitute any offence or under any penal law for the time being in force, the continuation of such prosecution amounts to abuse of process of law. Therefore, the court has to examine without reference to the defence of the accused on the basis

(2018) 6 KLJ 445

of the complaint itself whether there existed ingredients of Section 138 of the Negotiable Instruments Act. Even in order to take cognizance and issuance of process against the accused, such exercise has to be done, to nip the case at the bud to avoid un-necessarily accused facing the trial.

19. Now, coming to the factual aspects of this case. It is clear from the complaint averments that it is the case of the complainant that, the complainant has a son by name B. Sharath, the accused and complainant were known to each other since long. The complainant met the accused and in fact the accused had assured to provide a job to his son in HAL factory. In this context, the accused had requested the complainant to pay an amount of Rs.10 lakhs and he demanded the same for the purpose of providing a job to the son of the complainant. In this context, it is stated that, on various occasions, the complainant has paid some amounts to him. As the accused could not get the job to the son of the complainant, the complainant approached the accused. Then the accused again demanded for further amount for making payment to the Officers. As per the demand, the complainant paid amount to him. In total, lot of amount has been paid to the accused for the purpose of securing job to the son of the complainant. As the accused was not able to secure the job in HAL to the complainant's son, the complainant demanded for repayment of the money. In that context, it is said that on 1.5.2009, the accused issued a cheque bearing No.262871 for a sum of Rs.10 lakhs and on presentation of the said cheque it came to be dishonoured on the ground of 'funds insufficient'. After complying the other provisions of Section 138 of the Negotiable Instruments, it appears the complaint came to be lodged.

20. It is seen that, there are absolutely no allegations whatsoever that the accused has taken this money as a loan or a debt or as a liability at

any point of time. It is clear cut case of the complainant that, he has paid money for the purpose of securing job for his son, even without examining whether the accused has got any authority to provide job to his son or not and what is the procedure that is required to be followed by the HAL factory for the purpose of selecting any candidate for the purpose of providing any job. Therefore, without examining anything, the complainant himself has entered into a void contract with the accused and paid money as against the public policy for illegal purpose.

21. As could be seen from the rulings cited by the learned counsel for the petitioner and the provision of Section 23 of the Indian Contract Act, it is crystal clear that if on the basis of a void contract and particularly if the consideration is illegal, and consideration is for immoral or illegal purposes or which is against the public policy, then the whole transaction becomes void, the consideration paid in such contract becomes an illegal consideration and when it is said it is legal or unlawful consideration, it can not be at any stretch of imagination called as a legally recoverable debt.

22. Now, coming to the submission made by the learned counsel for the respondent with the help of the above said decisions cited, the cases have been considered with regard to the averments made in the complaint and the complainant has specifically stated with regard to the existence of the legally recoverable debt in the complaint. On the other hand, it is only the defence taken up by the accused that there exists no legally recoverable debt. Therefore, in that context, the courts have held that it requires evidence and the defence taken by the accused has to be established during the course of full dressed trial.

23. Another point which has been raised in those decisions is with regard to the debt which is

barred by limitation. If the debt is barred by limitation but if it cannot be outrightly said that it is an illegal transaction or it is an illegal consideration, then even if the debt is time barred, if the accused is willing to pay that amount, there is no bar for the complainant to receive that amount. Therefore, the illegal consideration or time barred debt stands on a different footing and illegal consideration is only barred from recovery. Therefore, the said ruling cited by the learned counsel is not presently helpful to the complainant herein.

24. So far as Section 139 of the Negotiable Instruments Act is concerned, of course there is a presumption under law. Initially the court has to draw presumption in favour of the complainant if on plain reading of the complaint, the court is of the opinion that the complainant has pleaded that there existed a legally recoverable debt and in support of that contention. The presumption has to be raised in favour of the complainant regarding existence of legally recoverable debt. But, if an illegal consideration is relied upon by the complainant himself, then such presumption u/s.139 of the Negotiable Instruments Act, cannot be raised at the initial stages also. It all depends upon the facts and circumstances of each case on the basis of the pleadings of the parties.

25. Section 138 of the Negotiable Instruments Act mandates that, there should be an existence of legally recoverable debt and in order to attract Section 138 of the Negotiable Instruments Act, the party has to plead with regard to the existence of legally recoverable debt. If he pleads with regard to the existence of the legally recoverable debt u/s.138 of the Act, then only presumption u/s.139 of the Act can be raised in favour of the complainant. If the complainant himself does not plead the existence of legally recoverable debt, then there is no question of raising any initial presumption in favour of the complainant. Therefore, even considering the

provisions of Section 139 of the Negotiable Instruments Act, there is no question of accused rebutting the presumption unless the presumption is raised in favour of the complainant. If the court for any reason comes to the conclusion that the ingredients of Section 138 of the Negotiable Instruments Act, are not made out, the court cannot take cognizance of such matter, and for the purpose of calling the accused to appear before the court and contest the proceedings."

The aforesaid legal position is not in dispute. Therefore,

with the facts obtaining in the case at hand being identical to

the underlined principle recognized in the aforesaid judgment

"legally recoverable debt", the subject proceedings also will

have to be rendered unsustainable.

9. For the aforesaid reasons, the following:

ORDER

(i) Criminal Petition is allowed.

(ii) The proceedings in C.C.No.1414/2019 stands

quashed qua the petitioner.

SD JUDGE Vb/-