Karnataka High Court

Vinayak Finance (Regd) vs Suresh S/O Ramachandra Mane on 10 January, 2022

Bench: M.Nagaprasannapresided Bymnpj

               IN THE HIGH COURT OF KARNATAKA
                       DHARWAD BENCH

           DATED THIS THE 10TH DAY OF JANUARY 2022

                           BEFORE

           THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

                CRIMINAL APPEAL NO.2893/2012

BETWEEN:

VINAYAK FINANCE (REGD)
REP. BY ITS MANAGER
SRI RAJU MANOHAR JADHAV
AGE: 36 YEARS, OCC: SERVICE
R/O. MENSI GALLI, BELAGAVI

                                                 ...APPELLANT.

(BY SHRI SHIVARAJ P MUDHOL, ADVOCATE.)


AND:

1.   SURESH S/O RAMACHANDRA MANE
     AGE: 48 YEARS, OCC: PROPRIETOR
     M/S SAI MEDICALS, H.NO.9
     BAZAR GALLI, VADAGAON, BELAGAVI.

2.   THE STATE OF KARNATAKA
     BY ITS PUBLIC PROSECUTOR
     HIGH COURT OF KARNATAKA
     CIRCUIT BENCH, DHARWAD.

                                                RESPONDENTS.

(BY SHRI SOURABH HEGDE, ADVOCATE, FOR SHRI SHREEVATSA S
HEGDE, ADVOCATE, FOR R.1;
SHRI PRAVEEN K. UPPAR, HCGP, FOR R.2.)
                                   2




      THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF
THE CODE OF CRIMINAL PROCEDURE, 1973, SEEKING TO SET ASIDE
THE    JUDGEMENT    AND     ORDER     DATED 31.05.2012,  IN
CRL.A.NO.70/2012 PASSED BY THE IV-ADDL. DIST. & SESSIONS
JUDGE & SPL. JUDGE (PCA) BELAGAVI AND TO CONFIRM THE
JUDGEMENT AND ORDER DATED 17.02.2012 IN C.C.NO.456/2007
PASSED BY THE JMFC II, BELAGAVI, ETC.,.

     THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY, THE
COURT DELIVERED THE FOLLOWING:


                            JUDGMENT

The appellant/Vinayak Finance is before this Court calling

in question the judgment dated 31.05.2012 passed by the

IV Additional District and Sessions Judge and Special Judge

(PCA), Belagavi, in Criminal Appeal No.70/2012 setting aside

the judgment and order of conviction dated 17.02.2012 passed

by the Judicial Magistrate First Class-II, Belagavi, in Criminal

Case No.456/2007 and acquitting the respondent/accused of the

offence punishable under Section 138 of the Negotiable

Instruments Act, 1981 ('the Act' for short').

2. Brief facts leading to the filing of the present appeal,

as borne out from the pleadings, are as follows:

The appellant runs a financial institution in the name and

style of Vinayaka Finance registered under the Karnataka

Co-operative Societies Act, 1959. The respondent runs a

medical shop in the name and style of Sai Medicals at Belagavi.

It transpires that the respondent approached the appellant and

requested for loan to meet his financial needs. On acceptance of

terms and conditions put forth by the appellant and on

execution of relevant documents, the respondent availed a loan

of Rs.30,000/- on 26.04.1995. The condition for advancing such

loan was that its repayment was to be within 90 days from the

date of receipt of the said loan, till which time monthly

installments were to be paid as interest. It is the case of the

appellant that the respondent became irregular in making

payment of installments and on 25-10-2003 the outstanding

balance of loan was Rs.60,000/-. On repeated requests the

respondent issued a post-dated cheque for Rs.47,500/- apart

from pigmy amount to be adjusted towards the loan that the

respondent had taken.

3. The cheque dated 5.11.2003 was issued to be

drawn on Belgaum Industrial Co-operative Bank Limited and

when the cheque was presented by the appellant through its

banker, it was dishonoured with an endorsement that the

account was closed. It is thereafter the appellant caused a legal

notice upon the respondent on 2.12.2003 and in spite of service

of the said notice, the respondent neither replied to the notice

nor paid the amount. It is on this premise the appellant filed a

complaint under Section 200 of the Code of Criminal Procedure,

1973, for the offence punishable under Section 138 of the Act.

4. Proceedings went on after taking cognizance for the

offence punishable under Section 138 of the Act and the learned

Magistrate by his judgment dated 17.2.2012 convicted the

respondent for the offence punishable under Section 138 of the

Act against which the respondent preferred appeal in Criminal

Appeal No.70/2012. The first appellate Court by its judgment

dated 31.5.2012, set aside the order passed by the learned

Magistrate and acquitted the respondent of the offence

punishable under Section 138 of the Act. It is this order of

acquittal by the first appellate Court that has driven the

appellant to this Court in the subject appeal.

5. Heard Shri Shivaraj P.Mudhol, learned counsel for

the appellant, Shri Sourabha Hegde, learned counsel for

Shri Shreevatsa S. Hegde, learned counsel for respondent No.1

and Shri Praveen K. Uppar, learned High Court Government

Pleader for respondent No.2.

6. The learned counsel appearing for the appellant

would vehemently argue and contend that it is an admitted fact

that the respondent had availed a loan of Rs.30,000/- and

towards discharge of legally enforceable debt, a cheque was

issued in favour of the appellant, as the amount of Rs.47,250/-

was still outstanding in the loan account of the respondent. The

learned Magistrate had purportedly passed an order of

conviction against the respondent/accused. The first appellate

Court has grossly erred in re-appreciating the entire evidence

and acquitting the respondent. He would seek restoration of the

order passed by the learned Magistrate.

7. On the other hand, the learned counsel appearing

for the respondent would refute the submissions made by the

appellant and contend that a blank cheque taken from the

hands of the respondent is used by the appellant 8 years after

disbursement of loan and when there was no legally enforceable

debt that could be claimed against the respondent and without

there being such debt, the cheque that was issued cannot result

in a presumption that the respondent is guilty. The order of the

first appellate Court is in fact in tune with law and does not call

for interference is the submission made by the learned for the

respondent/accused.

8. I have given my anxious consideration to the

submissions made by the respective parties and perused the

entire material on record.

9. The appellant who runs a financial institution

granted a loan of Rs.30,000/- to the respondent on 26.4.1995.

The condition was that the loan had to be repaid within 90 days.

It is the claim of the appellant that when the respondent refused

to pay or became irregular in payment and the amount of

Rs.30,000/- had then become Rs.60,000/- as on 25.10.2003,

deposited a chqeue for realization allegedly given by the

respondent for a sum of Rs.47,500/- which is dated 5.11.2003.

The cheque was presented on 21.11.2003 and later on it being

dishonoured, a notice was caused on 2-12-2003. Even according

to the appellant, the outstanding amount was Rs.60,000/- and

the cheque that was issued by the respondent was for an

amount of Rs.47,500/-. If the amount was advanced on

26.4.1995 and Ex.P.1 cheque was issued on 5.11.2003, the loan

which was required to be repaid within 90 days was already

time barred by the time when steps were taken by the appellant

for recovery of the said loan. Therefore, the question that arose

before the first appellate Court and that arises before this Court

is whether there was any legally enforceable debt against the

respondent by the appellant in law on the very transaction

becoming time barred. The first appellant Court on hearing the

parties formulated the following points for its consideration:

1) Whether the complainant proves beyond all reasonable doubt that accused issued a cheque for Rs.47,500/- bearing No.310658 dated 5.11.2003 drawn on Belgaum Industrial Co-operative Bank Limited, Belgaum towards discharge of legally enforceable debt to complainant, when presented it by him through his bank, it was bounced for the reason of account closed and in spite of issuance of notice, accused/appellant failed to pay the cheque amount and thereby committed an offence under Section 138 of the N.I.Act?

2) Whether the impugned order passed by the learned Magistrate is erroneous, perverse, arbitrary as well as capricious so as to call for any interference by this Court?

3) What order?

10. The first appellate Court on a clear consideration of

the contentions and the evidence that was brought before the

trial Court and on re-appreciation thereto held that there was no

enforceable debt against the respondent for the sheer fact that

the cheque was issued on 5.11.2003 for a transaction that had

to be closed within 90 days from the date of disbursement of

the amount. If there was no legally enforceable debt against the

respondent, the fact of mere presentation of cheque or issuance

of cheque would not amount to presumption under Section 139

of the Act. On that ground, the first appellate Court has by

rendering cogent and coherent reasons reversed the order