Herman Castelino vs Dr Suresh Kudva
2022 Latest Caselaw 8469 Kant

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 9TH DAY OF JUNE, 2022

                             BEFORE

THE HON'BLE Dr. JUSTICE H.B. PRABHAKARA SASTRY

 CRIMINAL REVISION PETITION No.592 OF 2019

BETWEEN:

Herman Castelino,
Aged about 51 years,
S/o. Alex Castelino,
Residing at Kabettu,
Karkala Kasba Village,
Karkala Taluk,
Udupi District - 576 002.
                                                   ..Petitioner
(By Sri. H. Pavana Chandra Shetty, Advocate)

AND:

Dr. Suresh Kudva,
Aged about 60 years,
S/o. Late Vasudeva Kudva,
Residing at Door No.266/2,
Ananthashayana,
Karkala Kasba Village,
Karkala Taluk,
Udupi District 576 002.
                                                  .. Respondent
(By Sri. M. Vijaya Krishna Bhat, Advocate)

                                 ****
      This Criminal Revision Petition is filed under Section 397
read with Section 401 of the Code of Criminal Procedure, 1973,
praying to set aside the judgment and order dated 11-03-2019
passed by the Court of the Principal District and Sessions Judge,
Udupi District, Udupi, in Crl.Appeal No.5/2018 and judgment of
                                                     Crl.R.P.No.592/2019
                                    2


conviction and sentence passed by the Court of the Principal Civil
Judge and J.M.F.C. at Karkala in C.C.No.578/2014 by order
dated 18-12-2017 under Section 255(2) of the Cr.P.C. convicted
the petitioner for the offence punishable under Section 138 of
the    Negotiable   Instruments     Act   and    sentenced    the
accused/petitioner to undergo simple imprisonment for a period
of one year and pay a fine of `10,000/-. In default of payment of
fine, the accused/petitioner shall undergo simple imprisonment
for a period of six months, acting under Section 357 of Cr.P.C.
the compensation is awarded and accused/petitioner shall pay
compensation of `5,00,000/- to the respondent/complainant.

      This Criminal Revision Petition having been heard through
physical hearing/video conferencing hearing and reserved on
02-06-2022, coming on for pronouncement of orders this day,
the Court made the following:

                            ORDER

The present petitioner as the accused was tried by the

Court of the learned Principal Civil Judge and Judicial

Magistrate First Class, Karkala, (hereinafter for brevity

referred to as "the Trial Court"), in Criminal Case

No.578/2014, for the offence punishable under Section 138

of the Negotiable Instruments Act, 1881 (hereinafter for

brevity referred to as "the N.I. Act") and was convicted for

the said offence by its judgment of conviction and order on

sentence dated 18-12-2017.

Aggrieved by the same, the accused preferred a

Criminal Appeal, in the Court of the learned Principal District Crl.R.P.No.592/2019

and Sessions Judge, Udupi District, Udupi, (hereinafter for

brevity referred to as "the Sessions Judge's Court") in

Criminal Appeal No.5/2018.

The appeal was contested by the respondent who was

the complainant in the Trial Court. The Sessions Judge's

Court in its order dated 11-03-2019 dismissed the appeal,

confirming the judgment of conviction and order on

sentence passed by the Trial Court dated 18-12-2017 in

C.C.No.578/2014.

Aggrieved by the said order, the accused has preferred

this revision petition.

2. The summary of the case of the complainant in the

Trial Court was that, the complainant and the accused are

known to each other. The complainant is a Medical

Practitioner and a Medical Examiner in the Life Insurance

Corporation of India (LIC), Karkala Branch and the accused

is an LIC Agent. At the request of the accused, the

complainant had advanced a hand loan of a sum of

`5,00,000/- to the accused in cash in the first week of Crl.R.P.No.592/2019

January 2013 at his residence. The accused had issued a

cheque dated 20-03-2013 bearing No.749010 for

`5,00,000/- drawn on the Corporation Bank, Karkala

Branch, in favour of the complainant in discharge of the

amount legally due to the complainant. When the said

cheque was presented for realisation, the same came to be

dishonoured and returned for the reasons 'funds

insufficient' and 'Account Closed/Transferred to......', as per

the banker's memo dated 23-03-2013. Thereafter, the

complainant got issued a legal notice dated 04-04-2013,

calling upon the accused to make payment of the cheque

amount, however, the said notice was returned as

unclaimed. This constrained the complainant to institute a

criminal case against the accused, in the Trial Court, in

C.C.No.578/2014, for the offence punishable under Section

138 of the N.I. Act.

3. The accused appeared in the Trial Court and

contested the matter through his counsel. He pleaded not

guilty and claimed to be tried, as such, the Trial Court Crl.R.P.No.592/2019

proceeded to record the evidence. To prove his case, the

complainant got himself examined as PW-1 and got marked

documents from Exs.P-1 to P-20 and closed his side. The

accused got himself examined as DW-2 and examined one

more witness - Sri. Akki Basavaraj as DW-1 and got

marked documents from Exs.D-1 to D-8, in his support.

4. The Trial Court after recording the evidence led

before it and hearing both side, by its impugned judgment

of conviction and order on sentence dated 18-12-2017

convicted the accused for the offence punishable under

Section 138 of the N.I. Act and sentenced him to undergo

simple imprisonment for a period of one year and pay a fine

of `10,000/-. In default of payment of fine, the accused

shall undergo simple imprisonment for a period of six

months. Acting under Section 357 of the Code of Criminal

Procedure, 1973, it directed the accused to pay

compensation of a sum of `5,00,000/- to the complainant.

Challenging the said judgment of conviction and order on

sentence passed by the Trial Court, the accused preferred Crl.R.P.No.592/2019

an appeal in Criminal Appeal No.5/2018, before the learned

Sessions Judge's Court, which after hearing both side, by its

impugned judgment dated 11-03-2019 dismissed the

appeal filed by the accused, while confirming the impugned

judgment of conviction and order on sentence passed by

the Trial Court. Being aggrieved by the judgments of

conviction and order on sentence, the accused has preferred

this revision petition.

      5.     Learned      counsel       for   the   revision    petitioner

(accused)       and         learned           counsel          for    the

respondent/complainant are appearing physically in the

Court.

L

6. The Trial Court and Sessions Judge's Court's

records were called for and the same are placed before this

Court.

7. Perused the materials placed before this Court

including impugned judgments and the Trial Court and

Sessions Judge's Court's records.

Crl.R.P.No.592/2019

8. For the sake of convenience, the parties would be

henceforth referred to as per their rankings before the Trial

Court.

9. Learned counsel for the petitioner (accused) in his

argument admitted that the accused is the drawer of the

cheque at Ex.P-1 and that the said cheque has been

dishonoured when presented for its realisation with the

shara 'Account Closed'. However, his main point of

argument was that the said cheque at Ex.P-1 is materially

altered in its date, as such, the instrument has become

void. This aspect, both the Trial Court and the Sessions

Judge's Court have not noticed. He further submitted that

the complainant has failed to prove that he had financial

capacity to lend such a huge amount of money of

`5,00,000/- as loan to the accused. He further submitted

that the accused and complainant are not in good terms.

Since the accused, as an LIC agent, refused to pay the

demanded commission by the complainant in the LIC

policies' premiums of the colleagues of the complainant, Crl.R.P.No.592/2019

the complainant in whose clinic the accused used to

leave his belongings including the documents like the

cheques has taken out the cheque in question and misused

by him.

10. Learned counsel for the respondent (complainant)

in his argument submitted that there is no material

alteration in the cheque. The year column in the cheque at

Ex.P-1 is clearly shown as '2013'. The alleged alteration

from the year '19' to '20B', is not suggested to PW-1 in his

cross-examination, but only an alteration in the cheque has

been suggested. He further submitted that being a Medical

Practitioner from the year 1984, the complainant had

sufficient source of income and that his mother also had

saved the amounts given to her by her children, as such,

the complainant and his mother had sufficient source of

income which had enabled the complainant to lend the loan

amount to the accused.

Crl.R.P.No.592/2019

11. After hearing the learned counsels for the parties,

the only point that arise for my consideration in this revision

petition is:

Whether the judgments under revision are perverse, illegal and erroneous, warranting interference at the hands of this Court?

12. It is not in dispute that the complainant is a

Doctor, as such, a Medical Practitioner in his profession and

is running a Hospital in the Town of Karkala. He is also a

Medical Practitioner for the LIC of India, attached to the

Karkala Branch. It is also an admitted fact that the accused

is an LIC agent attached to the Karkala Branch of LIC and

that both the complainant and the accused were known to

each other. It is also not in dispute that the cheque at

Ex.P-1 which is for a sum of `5,00,000/- is drawn by the

accused and the name of the payee is shown as that of the

complainant. It is also not in dispute that the cheque was

presented for its realisation by the complainant through his

banker, however, the same came to be returned unpaid.

Crl.R.P.No.592/2019

According to the accused, the said cheque came to be

returned for the reason of closure of his account, which is

also the evidence of DW-1 - Bank Manager, however,

according to the complainant, the said cheque was returned

for the reason of not only closure of the account, but also of

insufficiency of funds in the account of the accused, as

could be seen from the cheque return memo issued by the

Banker at Ex.P-2. It is in the light of the above undisputed

facts, the contentions of the parties are required to be

analysed in the light of the evidence led by them.

13. The complainant got himself examined as PW-1

wherein he reiterated the contentions taken up by him in

his complaint. Apart from Ex.P-1 and Ex.P-2, he has also

produced one more banker's memo for return of the cheque

issued by his banker at Ex.P-3, a copy of the lawyers notice

at Ex.P-4, unclaimed RPAD cover along with original legal

notice in it at Ex.P-5 and P-5 (a) respectively. With this,

the complainant contended that after return of the cheque,

he got issued a legal notice within time to the accused, Crl.R.P.No.592/2019

demanding the payment of the cheque amount, however,

the said notice was returned to the sender un-served. The

complainant was cross-examined extensively from the

accused's side, where attempts were made to show that the

complainant had no financial capacity to lend such a huge

sum of money and that the cheque was not issued by the

accused to the complainant towards dischargal of any

legally enforceable debt. It was specifically suggested to

the witness that there was no loan availed by the accused

from the complainant much less a sum of `5,00,000/-, as

contended by the complainant. It was also suggested to

the witness that there is alteration in the cheque at Ex.P-1.

14. From the accused's side, the then Manager of the

Corporation Bank, Karkala was examined as DW-1, who, in

his evidence, has stated that the cheque at Ex.P-1 which

pertains to the account of the accused was returned for the

reason of 'Account Closed' when presented for its

realisation. He has admitted a suggestion that there was

material alteration in the date mentioned in the cheque at Crl.R.P.No.592/2019

Ex.P-1. Though it was suggested to the witness in his

cross-examination from the complainant's side that the

cheque was returned for two reasons including the reason

of insufficiency of funds, however, the witness stated that

the cheque was returned for the reason of closure of the

account, still, he cannot say about the other reason since

the endorsement at Ex.P-2 was not written by him.

15. The accused got himself examined as DW-2

wherein, though he has not denied that the cheque at

Ex.P-1 was drawn by him, he specifically stated that he has

not given the said cheque to the complainant at any point of

time, much less towards the non-existing loan of a sum of

`5,00,000/- in favour of the complainant. On the other

hand, he has taken a defence that since he was meeting the

complainant and his wife quite often, towards medical

examination of the proposers of the Insurance Policies, at

that time, the complainant and/or his wife might have lifted

the subject matter cheque from his bag and have misused

it. The witness was cross-examined extensively from the Crl.R.P.No.592/2019

complainant's side, where attempts were made to show that

the accused was facing few more similar cheque dishonour

cases as an accused. In order to show that, the signature

at Ex.P-1(a) was that of the accused, the vakalath of the

accused with his signature therein was marked at Exs.P-6

and P-6(a) to show that the accused was facing several

other criminal cases, majority of which are the cases

regarding the offence punishable under Section 138 of the

N.I. Act. The certified copies of the order sheets in several

criminal cases were marked from Exs.P-7 to P-20 in the

cross-examination of DW-1. The accused also got marked

eight documents from Exs.D-1 to D-8 from his side

including copy of the statements of account, Form No.16,

and a letter.

16. The main contention of the learned counsel for

the petitioner (accused) is that, the cheque at Ex.P-1 has

been materially altered, without the notice or consent of the

drawer of the cheque, as such, the instrument has become

invalid.

Crl.R.P.No.592/2019

17. Learned counsel for the respondent submits that

there is no such material alteration in the instrument and

that the cheque is shown to have been issued by the drawer

in the year 2013.

18. A perusal of the cheque at Ex.P-1 would go to

show that, in the date column, the first two digits of the

year is printed as '19', however, the said two digits i.e. '19'

is shown to have been cancelled/scored off with a dash, i.e.

'--' marked on those two digits/figures and after that, it is

written as '20' followed by another figure which for a naked

eye appears to be as '8', but, in close scrutiny looks like 'B',

which, according to the complainant is '13'. The said two or

one figure after the two digits/figures '20' is the subject

matter of different interpretation by the learned counsels

from both side.

In the cross-examination of PW-1, without explaining

as to what the alleged material alteration is, it was only

suggested to the witness that, there is a material alteration

in the cheque at Ex.P-1. However, the said suggestion was Crl.R.P.No.592/2019

not admitted as true by the witness. The accused in his

examination-in-chief has not stated anything about the

alleged alteration in the date of the cheque. Therefore,

naturally in his cross-examination also, nothing has come

out regarding the alleged alteration of the date of the

cheque. However, DW-1, the Bank Manager of the drawee

Bank, in his examination-in-chief has admitted a suggestion

as true that there is an alteration in the date of the cheque

at Ex.P-1, however, he volunteered to say that he does not

know as to who has made that alteration and when. The

said evidence of DW-1 the Bank Manager that there is

material alteration in the date of the cheque at Ex.P-1, has

not been denied or disputed in the cross-examination of the

said witness from the complainant's side.

The un-denied evidence of DW-1 the Manager of the

Drawee Bank prevents the Court from understanding the

two digits in the date column which could have been read or

recognised as '8' or 'B' from taking it as '13', however, the

fact remains that there is alteration in the date of the

cheque at Ex.P-1. Even the learned Sessions Judge's Court Crl.R.P.No.592/2019

also in Criminal Appeal No.5/2018 in its impugned judgment

has opined that the date in the cheque at Ex.P-1 shows that

it was altered, however, the learned Judge has opined that

he was unable to accept the same as a material alteration.

On the other hand, he has given his own interpretation

observing that the account was closed in the year 2005.

Therefore, when an attempt was made to mention the year

as '2013', it was written as '2008' instead of '2013'.

If at all there was any such attempt for alteration, the

year should have been written as '2008' but not as '208'.

The said reasoning of the learned Sessions Judge's Court is

also not convincing because he himself has stated that, in

an attempt to mention the year as '2013', it was written as

'2008' instead of '2013'. Thus, the further attempt to make

the year as '2013' would naturally amount to an alteration

which is admittedly not authenticated by the drawer of the

instrument.

19. In M.L. Tannan's Banking Law and Practice in

India Twenty-eighth Edition - 2021, he has defined

"Material alterations" at page 950, as below:

Crl.R.P.No.592/2019

"An alteration is material, which in any way alters materially or substantially the operation of the instrument and the liabilities of the parties thereto, irrespective of the fact whether or not the change is prejudicial to the payee."

Apart from stating that a banker must be very careful

when there is a material alteration in the cheque presented for

payment and that it should see that such alteration has been

made with the drawer's consent or authority and is confirmed

by his signature, Tannan has also given few examples of

material alterations in which the alteration of the date of the

instrument with the purpose of accelerating or postponing the

time of the payment comes on the top.

20. In the instant case, the alteration in the cheque at

Ex.P-1 has been admitted by none else than the drawee Bank

Manager in his evidence as DW-1. Though it was not elicited

from him about the nature of the said alteration, however, he

has identified the said alteration as an alteration in the date of

the cheque. As analysed above, in the date column, the year

appears to have been manipulated and appears to have been Crl.R.P.No.592/2019

postponed the time of payment. Thus, undoubtedly, it is a

material alteration in the cheque.

21. Section 87 of the N.I. Act which speaks about the

effect of material alteration, states that any material alteration

of a Negotiable Instrument renders the same void as against

any one who is a party thereto at the time of making such

alteration and does not consent thereto, unless it was made in

order to carry out the common intention of the original

parties.

In the instant case, there is nothing on record to show

that the alteration in the date of the cheque at Ex.P-1 was

made in order to carry out the common intention of the

original parties. Therefore, by virtue of the material alteration

being made to the date of the cheque without any

authentication thereto by the drawer of the cheque, the

instrument becomes void. However, the banker, even there

being a material alteration in the cheque, did not proceed to

mention the same as one among the reasons for returning of

the cheque, but only stated that the cheque was returned for Crl.R.P.No.592/2019

the reason of closure of the account by the drawer. As

noticed above, the Bank Manager as DW-1 referring to the

register maintained by them, has stated that the cheque at

Ex.P-1 was returned by them by mentioning only the reason of

closure of the account. He made it clear even in his cross-

examination that the banker had returned the cheque only

with the reason of "Account Closed", as such, he could not

give any explanation as to how come the reason of 'funds

insufficient' was also shown as marked with a tick '√' in the

cheque return memo at Ex.P-2. However, in the cross-

examination of PW-1, it was suggested that the complainant,

with an intention to ensure that he would maintain a case

against the accused for the offence punishable under Section

138 of the N.I. Act, manipulated the cheque return memo

showing the same as returned even for the reason of

insufficiency of funds. Therefore, it is clear that since the

account of the drawer of the cheque was closed with the

drawee Bank as on the date of the presentation of the cheque

at Ex.P-1, it confined the reason for returning of the cheque

only to the reason of "account closed". Thus, it cannot be Crl.R.P.No.592/2019

deduced that, had there been any material alteration in the

cheque at Ex.P-1, the banker should have necessarily

mentioned about the same. At the cost of repetition, it is

again observed that DW-1 as a Bank Manager of the drawee

Bank himself has stated that there is alteration in the date

column of the cheque at Ex.P-1. Surprisingly, neither the Trial

Court nor the learned Sessions Judge's Court have noticed this

aspect, on the contrary, merely because there was a cheque

return memo and legal notice copy, they have proceeded to

hold that the guilt against the accused has been proved

beyond all reasonable doubts. Had they noticed the material

alteration existing in the cheque at Ex.P-1, making the

instrument at Ex.P-1 void, then, they would not have

proceeded to hold the accused before it guilty of the alleged

offence. Since the said finding of both the Trial Court as well

the learned Sessions Judge's Court holding the accused guilty

of the alleged offence is now established to be a perverse and

erroneous finding, the same warrants interference at the

hands of this Court. Thus, without discussing the other aspect

of the alleged allegation of financial incapacity of the Crl.R.P.No.592/2019

complainant to lend such a huge sum of money to the

accused, suffice it to hold that the impugned judgments of

both the Courts deserve to be set aside and the accused

deserves to be acquitted of the alleged offence.

Accordingly, I proceed to pass the following:

ORDER

[i] The Criminal Revision Petition stands allowed.

[ii] The impugned judgment of conviction and order

on sentence passed by the learned Principal Civil Judge and

Judicial Magistrate First Class, Karkala, dated 18-12-2017 in

Criminal Case No.578/2014, holding the petitioner herein

(accused) guilty of the offence punishable under Section

138 of the Negotiable Instruments Act, 1881, and the

impugned judgment passed by the learned Principal District

and Sessions Judge, Udupi District, Udupi, dated 11-03-

2019, in Criminal Appeal No.5/2018, confirming the

judgment of the Trial Court, are hereby set aside;

[iii] The petitioner (accused) - Sri. Herman Castelino,

Aged about 51 years, S/o. Alex Castelino, Residing at

Kabettu, Karkala Kasba Village, Karkala Taluk, Udupi Crl.R.P.No.592/2019

District, is acquitted of the offence punishable under Section

138 of the Negotiable Instruments Act, 1881.

Registry to transmit a copy of this order to both the

Trial Court and also to the Sessions Judge's Court along

with their respective records, forthwith.

Sd/-

JUDGE

BMV*