Srimant S/O Shankar Rathod vs Sudhir S/O Hanamantappa Elager
2022 Latest Caselaw 1181 Kant

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           IN THE HIGH COURT OF KARNATAKA
                  KALABURAGI BENCH

       DATED THIS THE 27TH DAY OF JANUARY, 2022

                       BEFORE

       THE HON'BLE MR. JUSTICE V. SRISHANANDA

 CRIMINAL REVISION PETITION NO.200045/2017


BETWEEN:

SRIMANT
S/O SHANKAR RATHOD
AGE:49 YRS, OCC:AGRICULTURE
& BUSINESS, R/O VIVEK NAGAR,
NEAR IBRAHIMPUR RAILWAY GATE,
VIJAYAPUR.                           ..PETITIONER

(BY SRI./SMT : R S LAGALI)

AND:

SUDHIR
S/O HANAMANTAPPA ELAGER
AGE:44 YRS, OCCU:BUSINESS,
R/O PURNIMA ELECTRICALS,
NEAR NAAD KACHERI, DEVAR-HIPPERAGI,
TQ.SINDAGI,DIST.VIJAYAPUR    ...    RESPONDENT

(BY SRI./SMT : SANTOSH GOGI )

       THIS CRL.RP IS FILED U/S 397 R/W SEC. 401 OF
CR.P.C PRAYING TO, ADMIT THE REVISION PETITION AND
CALL FOR RECORDS. SET ASIDE THE JUDGMENT & ORDER
OF CONVICTION DATED 15.03.2017 PASSED BY THE II
ADDL. SESSIONS JUDGE, VIJAYAPUR, IN CRIMINAL
APPEAL NO.3/2016 IN DISMISSING THE APPEAL
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PREFERRED BY THE PETITIONER & THEREBY CONFIRMING
THE    JUDGMENT     &   ORDER    OF    CONVICTION
DATED:01.01.2016 PASSED BY THE CIVIL JUDGE & JMFC.,
COURT, SINDAGI IN C.C.NO.110/2013 & ACQUIT THE
PETITIONER OF ALL THE CHARGES, IN THE INTEREST OF
JUSTICE AND EQUITY.

     THIS CRIMINAL REVISION PETITION COMING ON
FOR HEARING THIS DAY, THE COURT MADE THE
FOLLOWING :

                             ORDER

1) The present Revision Petition is by the accused

who suffered an order of conviction for the offence

punishable under Section 138 of the Negotiable

Instruments Act, in CC No.110/2013 passed by the Civil

Judge & JMFC, Sindagi, which was confirmed by judgment

dated 15.3.2017 passed in Criminal Appeal No.3/2016

whereby the accused was convicted and sentenced to pay

a fine of Rs.8 lakhs as the compensation and also to

undergo simple imprisonment for one year with default

sentence.

2) Brief facts of the case are as under:

A private complaint came to be filed under Section

200 Cr.PC. by the respondent/complainant herein

contending that on 28.12.2012 the accused approached

the complainant and requested to give hand loan of Rs.4

lakhs in order to meet out his contract work. Accordingly,

the complainant given Rs.4 lakhs cash to the accused in

the presence of Saibanna Kasappa Natikar and Ramesh

Dhareppa Metagar. The accused has promised the

complainant that he would repay the same within 2-3

months and after completion of 2-3 months, when the

complainant demanded the accused for repayment of the

same, the accused has passed on a cheque bearing

No.050358 dated 13.2.2013 for a sum of Rs.4 lakhs in the

name of the complainant drawn on Axis Bank, Vijayapura

branch. On presentation of the cheque, the same came to

be dishonoured on 16.2.2013 and 25.2.2013, the said

cheque returned unpaid with an endorsement 'funds

insufficient'. Immediately statutory notice was issued to

the address of the accused, but the same is signed by one

Rathod. There is no reply to the legal notice and

therefore, the complainant sought for action against the

accused for the offence punishable under Section 138 of

the NI Act. After completing the formalities, learned Trial

Magistrate secured the presence of the accused and

recorded a plea. Accused pleaded not guilty. Therefore,

trial was held.

3) In order to prove the case of the prosecution

the complainant got himself examined as PW-1 and

examined other two witnesses by name Saibanna Natikar

and Rameshbabu Metagar as PWs.2 & 3. He also relied on

six documentary evidence which were exhibited and

marked as Exs.P-1 to P-6. Thereafter, accused statement

came to be recorded under Section 313 Cr.PC. wherein,

the accused denied all the incriminatory circumstances

found against him. In order to rebut the presumption

available to the complainant, accused got examined

himself as DW-1 and other witnesses Virupakshappa

Dundappa Sindagi and Banu Dhanasing Pawar as DWs.3

and 4. On behalf of defence, two documents were marked

and exhibited as Exs.D-2 & D-2 which are cheque leaf and

marked portion of cheque leaf.

4) Therefore, the learned Trial Magistrate heard

the parties in detail and after appreciating the material

evidence on record convicted the accused for the offence

punishable under Section 138 of the NI Act, by recording a

finding that accused failed to rebut the presumption and

complainant is successful in establishing that there is a

hand loan transaction between the complainant and the

accused and the said cheque in question came to be

issued for repayment of the hand loan amount and passed

an order of conviction and sentence as referred to supra.

5) Being aggrieved by the same, accused

preferred an appeal before the First Appellate Court in

Criminal Appeal No.3/2016.

6) Learned Judge in the First Appellate Court after

securing the records and after hearing the parties in detail

confirmed the judgment and order of conviction and

sentence passed by the learned Trial Magistrate. Being

aggrieved by the same, accused is before this court in this

Revision Petition.

7) In this Revision Petition the following grounds

are raised:

GROUNDS:

¾ The Judgment & Order of Conviction passed

by the Courts below is against the facts of the case & the

evidence & materials placed on records. The Judgment &

Order of Conviction has resulted in miscarriage of justice

to Petitioner.

¾ The Judgment & Order of Conviction passed

by the Courts below is one sided & suffers from non-

application of mind. The Courts below have completely

ignored the defence urged by the Petitioner.

¾ It is respectfully submitted that, the trial

court as well as the lower appellate court ought to have

dismissed the complaint holding that the offence &

ingredients as enumerated in S. 138 NI Act were not

made out by the Complainant/ Respondent. It is

submitted that, the legal notice which is mandatory

requirement under the Proviso (c) appended to Section

138 NI Act remains unfulfilled and thereby no offence as

noted in S.138 NI Act is made out.

      ¾      Section 138 of the NI Act. Xxxx

      ¾      It is respectfully submitted that, yet another

reason to hold that the requirement of legal notice to be

served upon the Accused remains unfulfilled on the

ground that the endorsement on Ex. P. 4 which is the

postal acknowledgement which is produced before the

Hon'ble Court does not bear the signature of the

Petitioner. On bare perusal of the said Ex. P. 4 it bears

the signature of one K. K. Rathod who is nowhere related

or concerned to Petitioner / Accused. It is submitted that

the trial court as well as the lower appellate court failed

to hold that there was no pleading or evidence to the

effect that it was the Petitioner/ Accused who had set up

somebody by name K K Rathod & had received the notice.

It is submitted that, as noted above only upon the receipt

of the legal notice the offence as enumerated in S. 138 NI

Act is complete. It is submitted that, the trial court as

well as the lower appellate Court have completely ignored

this basic aspect of the matter & have on misplaced legal

reasoning and logic have held that the legal notice as duly

served upon the petitioner/accused. In view of such

variations in signature the trialk court as well as the lower

appellate court ought tohave held that the legal notice

was not served upon the petitioner/accused and thereby

acquitted the petitioner holding that no offence is made

out under Section 138 of the NI Act.

¾ It is respectfully submitted that, the trial

court has wrongly placed the burden upon the

Petitioner/Accused to demonstrate the fact that said K. K.

Rathod is not concerned to Accused/Petitioner. It is

submitted that the very approach of the trial court

imposing the burden of establishing the fact that K.K.

Rathod is not related or concerned to Petitioner has not

legal basis. It is submitted that, as per the S. 138 NI Act

the burden is upon the Complainant Respondent to clearly

demonstrate that the legal notice issued was duly served

upon him. It is submitted that S. 94 of the NI Act makes

a specific provision for the mode of service of notice upon

the drawer of cheque/ instrument. It is submitted that the

Complainant Respondent must establish that the Accused

Petitioner has received the legal notice by putting his

signature to the postal acknowledgement & to discharge

the said burden completely the Complainant ought to

have examined the Postman to prove that the postman

had delivered the demand notice to accused by obtaining

his signature to postal acknowledgement. In view of the

different signature on Ex. P. 4 postal acknowledgement

the Complainant ought to have examined the postman

&non-examination of Postman has rendered the case of

the Complainant Respondent regarding service of legal

notice has not established.

¾ It is respectfully submitted that, the trial

court as well as the lower appellate court have completely

ignored the fact that the cheque in question though

belongs to Petitioner Accused has failed to question

appreciate the fact that the same is misused by the

Complainant Respondent. It is submitted that it is the

specific defence of the Petitioner is that the cheque in

question was given as security for the transaction dated

20.12.2011 between the Complainant & one V. D. Sindagi

(Dw-2). It is submitted that in order to establish the said

fact the Petitioner / Accused has produced Ex. D. 2 which

is the marked portion in record slip appended to the

cheque book. It is submitted that the said record was

noted during the usual course of business/ work &

therefore assumes importance. It is submitted that the

Complainant/ Respondent has nowhere in cross

examination of the Accused/ petitioner denied the said

document or entry. It is submitted that the trial court has

not even discussed this aspect of the matter. However,

the lower appellate court on misplaced legal reasoning

has held that it is inconsequential and has held that the

accused/petitioner has not discharged his burden to rebut

the presumption raised under Section 139 of NI Act.

¾ It is respectfully submitted that, the trial

court as well as the lower appellate court has completely

ignored the admission elicited in the cross examination of

Pw-2 Saibanna Natikar regarding the transaction Dt.

20.12.2011 between the Complainant & one V. D.

Sindagi. It is submitted that on perusal of the cross

examination of Dw-2 Saibanna Natikar it is clear that said

Saibanna has admitted during the cross examination

about the transaction Dt. 20.12.2011 wherein the cheque

in question was given as security for the sum of Rs.

2,00,000/-. It is submitted that the said admission has

remained unimpeached as no clarification has been

afforded by re-examination of the said witness. In view of

Ex. D. 2 not being denied by the Complainant &

admission by Pw-2 about the issuance of the cheque for

the transaction Dt.20.12.2011 it would probablize the

defence that the cheque was given as security & the same

has been misused by the Complainant Respondent. The

courts below have brushed aside the said material aspect

as none issues.

¾ It is respectfully submitted that, the contents

of the cheque namely the payee, the amount in words &

numbers & the date are not written by the Accused. It is

submitted that it is the specific defence of the Accused

that the cheque in question was given has a signed blank

cheque to Complainant towards the transaction

Dt.20.12.2011 as security of purchase of electric item

from the Complainant's shop. It is the complainant's

specific case that the Accused issued cheque on

13.02.2013 for a sum of Rs. 4,00,000/-. It is submitted

that the courts below completely ignored the fact that

there is change of ink meaning thereby the contents are

written by somebody else other than the

Accused/Petitioner.

¾ It is respectfully submitted that, the trial

court has specifically held that though there is change in

ink regarding the signature & the contents of the cheque

same would not vitiate the proceedings as it would give

an imply authority to fill up the contents of the cheque. It

is submitted that such reasoning does not hold good for

the reason that there is no pleading to the effect that the

Accused/ Petitioner had only issued a signed blank

cheque & had asked the Complainant to fill up the

contents. On the contrary there is a specific pleading that

the Accused. Petitioner issued a cheque for a sum of Rs.

4,00,000/- to Complainant on 13.02.2013 upon demand.

In fact Pw-2 & Pw-3 also depose that the Accused /

Petitioner issue the cheque for a sum of Rs. 4,00,000/- to

Complainant on 13.02.2013. In view of such contradictory

evidence the cheque is discharged as filling of the cheque

without express or implied authority amounts to material

alteration rendering the cheque unenforceable. It is

submitted that considering this aspect of the matter the

trial court as well as the lower appellate court ought to

have held that there was material alteration of the

cheaque thereby rendering it unenforceable.

¾ It is respectfully submitted that. the lower

appellate court proceeded on assumptions & presumption

than on actual material on record. lt is submitted that,

the Sessions Court has held that the Accused / Petitioner

has not examined V. D. Sindagi to explain about the

transaction Dt. 20.12.2011 between the Complainant & V.

D. Sindagi in which regard the Accused had issued the

cheque in question. It is submitted that on perusal of the

reasons assigned in the Judgment it appears that the

Sessions Court has proceeded on the premises that

Accused has not examined V. D. Sindagi. It is submitted

that the lower appellate court fell in error in not observing

the fact that Dw-2 Virupaxappa S/o. Dhareppa Sindagi is

the very same V. D. Sindagi. So, the lower Appellate

court has proceeded on the premises that Dw-2

Virupaxappa S/o. Dhareppa Sindagi & V. D. Sindagi are 2

different persons.

¾ It is respectfully submitted that the trial

court as well as the lower appellate court have ignored

the elementary principle of criminal jurisprudence

regarding the degree of proof upon the Accused. It is

submitted that the degree of proof to establish the

defence is governed by the principles preponderance of

probability whereas, the degree of proof casted upon the

Complainant or the prosecution is governed by the

doctrine of proof beyond reasonable doubt meaning

thereby the burden of degree of proof upon Accused is

lesser compared to the Complainant. It is submitted that

the Accused need not proved his defence but create a

reasonable doubt in the Complainant's case. So

considering the totality of circumstances & the materials

placed on record the trial court as well as the lower

appellate court ought to have held that the defence of the

Accused stood established & he ought to have been

acquitted of all the charges.

¾ Without prejudice to the above noted

ground, the sentence of simple imprisonment for one year

& fine of Rs.8,00,000/- is harass & not proportionate to

the offence established. The trial court ought to have

taken in account the nature of the transaction, the

financial backdrop of parties, the punishment thereof and

the evidence adduced by the Complainant to bring home

the guilt. The trial court has completely over looked the

elementary principle of penology that the punishment

should be proportionate to the offence involved. The

imposition of such long terms of sentence & imposing

double the cheque amount without assigning proper

reasons clearly demonstrates the non-application of mind

by the court below.

¾ The Petitioner seeks the leave of this Hon'ble

Court to urge other grounds at the time of hearing of the

matter."

8) Re-iterating the above grounds, the learned

counsel for the Revision Petitioner Sri R.S. Lagali,

vehemently contended that both the courts have grossly

erred in convicting the accused for the offence punishable

under Section 138 of the NI Act, resulting in miscarriage of

justice and sought for allowing the Revision Petition.

9) He further pointed out that statutory notice is

not properly served on the Revision Petitioner and the

Revision Petitioner has specifically stated in his evidence

before this court that the cheque was issued as a security

and the same has been misused by the complainant and

the learned Judge in the First Appellate Court has not

properly bestowed its attention to the deposition of DW-2

and has observed that the Revision Petitioner has not

examined Sri V.D. Sindagi properly before the court to

prove the transaction and therefore, sought for allowing

the Revision Petition.

10) Alternatively, he contended that the sentence

is excessive and sought for modification of the sentence.

11) Per contra Sri Santosh Gogi, learned counsel

for the respondent supported the impugned judgment by

contending that the loan transaction has successfully

proved by the complainant by examining himself and two

witnesses and the cheque came to be issued for

repayment of the loan amount and whereby, the there is

no dispute that the signed cheque is parted from the

custody complainant and therefore, the complainant has

discharged the initial burden cast on the complainant and

therefore, the complainant enjoys the presumption under

Section 118 and 139 of the NI Act, which has not been

properly rebutted by the accused and therefore, both the

courts were justified in convicting the accused for the

offence punishable under Section 138 of the NI Act and the

sentence passed by the learned Trial Magistrate confirmed

by the First Appellate Court is appropriate sentence in the

facts and circumstances of the case and sought for

dismissal of the Revision Petition in toto.

12) In view of the rival contentions and having

regard to the limited scope of the revisional jurisdiction,

following points would arise for consideration:

"(i) Whether the finding recorded by the learned Trial Magistrate confirmed by the First Appellate Court that the accused is guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, is suffering

from factual patent defect or error of jurisdiction or legal infirmity, and thus calls for interference?

(ii) Whether the sentence is excessive?

13) In the case on hand, issuance of cheque and

the signature of the accused in Ex.P-1 cheque is not in

dispute. The cheque came to be issued according to PW-1

towards the repayment of the loan amount. In order to

prove the hand loan complainant examined himself and

two witnesses as PWs.2 & 3. The name of PWs.2 & 3

appears in the very complaint itself. Further, in the cross

examination of PWs.1 to 3, there is no material elicited so

as to establish that the cheque came to be issued by the

accused for and on behalf of DW.2 for purchase of the

electrical items. Further, even if it is issued as a security,

as per the latest ruling of the Hon'ble Apex Court in the

case of Sripati Singh Vs. State of Jharkhand and

another reported in 2021 SCC online SC 1002, even

assuming that cheque came to be issued for security

purpose, as per the settled principles of law, the same is

also an offence as is contemplated under Section 138 of

the NI Act.

14) Further, since the loan transaction is

established and the cheque came to be issued towards the

repayment of the loan amount, the complainant has

discharged the initial burden cast on him and as such, the

complainant enjoys the presumption available to the

complainant under Section 139 of the NI Act. In order to

rebut the presumption available to the complainant,

accused got himself examined as DW-1. In his

examination in chief, he has categorically deposed that he

issued the cheque as a security for the electrical items

purchased by DW-2.

15) However, DW-2 in his examination in chief

admits that himself and DW1 visited the shop of the

complainant and purchased electrical items and cheque

came to be issued by DW-1 towards the purchase of

electrical items and thereafter, DW-1 has paid the entire

two lakhs in cash, and demanded for return of the cheque

which was promised to be returned by the complainant

within 8 to 10 days. This version of DW-1 and DW-2

clearly shows that there was a transaction between the

complainant and accused. What exactly is the transaction

is not proved by DWs.1 & 2 by placing the invoice or any

other document for having purchased the electrical items

to the tune of two lakhs. Therefore, in the absence of any

such evidence placed on record, the learned Trial

Magistrate has placed reliance on the oral testimony of

PWs.1 to 3 in holding that the cheque came to be issued

towards repayment of the hand loan by the accused to the

complainant.

16) The defence of the accused having taken a

specific defence that DW-2 has purchased electrical items

to the tune of Rs.2 lakhs and blank cheque came to be

passed on by him, which was mis-used by the complainant

by filling Rs.4 lakhks is not established by placing

necessary oral and documentary evidence on record.

Further, no prudent person would keep quiet if the cheque

is mis-used, no action has been taken by the accused

either by issuing legal notice or by filing a private police

complaint about the alleged misuse of Ex.P1. Under such

circumstances, the learned Trial Magistrate has rightly

rejected the evidence placed by the accused and convicted

the accused for the offence punishable under Section 138

of the NI Act. However, the learned First Appellate Court

got confused the name of V.D.Sindagi and discussed at

length in the judgment that the accused failed to examine

V.D. Sindagi. On record, it is seen that V.D.Sindagi is none

other than DW-2 whose name is Virupakshappa Dundappa

Sindagi, to that extent First Appellate Court's order is

incorrect. Nevertheless, the finding recorded by the

learned Trial Magistrate and up held by the First Appellate

Court, supplementing additional reasons for not

examining V.D. Sindagi, needs to be ignored and the

relevant portion which has been relied for the purpose of

confrontation of the conviction order is upheld by this court

in the revisional jurisdiction. This court having regard to

the limited scope of revisional jurisdiction, re-considered

the material evidence on record. On such re-

consideration, it is found that PWs.1-3 have

categorically deposed before the court about the hand loan

taken by the accused from the complainant on 28.12.2012

to the tune of Rs.4 lakhs. Subsequently, a cheque came to

be issued for repayment of the said amount.

      17)   The       cheque   on     presentation   came        to   be

dishonoured.      Statutory notice sent to the registered

address of the accused. However, the acknowledgement

depicts that it is signed by one Rathod. In such

circumstances, again the complainant enjoys the

presumption under General clauses Act that registered

address, it is deemed to have served on the addressee

irrespective of, who signs the acknowledgement. It is for

the accused to show that he was not residing in the

address shown in the acknowledgement cover. Under such

circumstances, the contention urged on the behalf of the

Revision Petitioner that the statutory notice is not properly

served and therefore, the accused cannot be convicted for

the offence punishable under Section 138 of the NI Act,

cannot be countenance in law. Further, since the rebuttal

evidence placed by the accused is not sufficient in

establishing that the cheque came to be issued for the

purpose of security and therefore, the learned Trial

Magistrate rightly concluded based on the oral testimony

of PWs.1 to 3 that the cheque came to be issued for the

purpose of repayment of the hand loan. Accordingly, on

such reconsideration of the material evidence on record,

this court is of the considered opinion that the order of the

learned Trial Magistrate recording a finding that the

accused is guilty of the offence under Section 138 of the NI

Act, confirmed by the First Appellate Court is based on

sound and logical reasons and not suffering from any

patent factual defect or error of jurisdiction or legal

infirmity or perversity. Accordingly, Point No.1 is

answered in the negative.

18) Reg Point No.2: The cheque came to be

issued on 13.2.2013 and dishonoured on 25.2.2013.

Roughly 9 years have elapsed. Under such circumstances,

the learned Trial Magistrate taking note of the fact that the

cheque is for a sum of Rs.4 lakhs and taken for the

business transaction, has imposed Rs.8,00,000 as fine and

Rs.7,90,000/- was ordered to be paid as compensation to

the complainant. Apart from that, the learned Trial

Magistrate also sentenced the accused to undergo simple

imprisonment for a period of one year.

19) It is now settled principle of law that the

primary object of convicting an accused for the offence

punishable under Section 138 of the NI Act, is to recover

the amount covered under the cheque and only in a special

circumstances, the accused can also be sentenced to

undergo imprisonment. But, no such special case is made

out in the case on hand so as to maintain one year simple

imprisonment. Suffice to say, having regard to the nature

of transaction, and the time of transaction, if fine amount

is reduced from Rs.8 lakhs to Rs.7 lakhs, ends of justice

would be met. Accordingly, Point No.2 is answered and

following order is passed:

ORDER

(i) Criminal Revision Petition is allowed in part.

(ii) While maintaining the order of conviction for the offence punishable under Section 138 of the NI Act, the accused is ordered to pay fine of Rs.7,05,000/-. Out of the which, a sum of Rs.7 lakhs is ordered to be paid as compensation to the complainant.

(iii) The balance fine amount shall be appropriated to the State.

(iv) Time is granted to pay the amount till 28.2.2022. Failing which, the accused shall undergo simple imprisonment for one year.

(v) Office is directed to return the Trial Court records with a copy of this order to enable the learned Judge of the Trial Court to issue modified conviction order.

Sd/-

JUDGE

PL*