Karnataka High Court

Sri Gopal vs Smt C N Yashodamma on 24 June, 2022

Bench: M G Bymguj

                             1


    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

           DATED THIS THE 24TH DAY OF JUNE, 2022

                         BEFORE

             THE HON'BLE MRS.JUSTICE M.G. UMA

       CRIMINAL REVISION PETITION NO.489/2017


BETWEEN:

SRI. GOPAL
SON OF SHIVE GOWDA
AGED ABOUT 55 YEARS
BHARADWAJ NILAYA, UPSTIAR
BESIDE OLD RTO OFFICE ROAD
HOSAMANE EXTENSION
CHIKKAMAGALURU CITY - 577 101.
                                                ... PETITIONER

(BY SRI: JAYAKIRTHI M.C., ADVOCATE)


AND:

SMT. C.N. YASHODAMMA
WIFE OF LATE C. VENKATARAM
AGED ABOUT 62 YEARS
RESIDING AT 1ST CROSS
KUVEMPU NAGARA
CHIKKAMAGALURU CITY - 577 101
                                             ... RESPONDENT

(BY SRI: GIRISH B BALADARE, ADVOCATE)

      THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 OF CR.P.C. PRAYING TO SET ASIDE THE ORDER
DATED 08.12.2015 PASSED BY THE II ADDITIONAL CIVIL JUDGE
AND J.M.F.C., CHIKKAMAGALURU IN C.C.NO.606 OF 2013
CONVICTING THE PETITIONER FOR THE OFFENCE UNDER SECTION
138 OF N.I. ACT AND THE ORDER DATED 06.04.2017 PASSED BY
THE II ADDITIONAL SESSIONS JUDGE, CHIKKAMAGALURU IN
CRL.A.NO.7 OF 2016.
                                    2


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

                          ORDER

The revision petitioner-accused is before this Court

being aggrieved by the judgment of conviction and order of

sentence dated 08.12.2015 passed in CC No.606 of 2013 by

the learned II Additional Civil Judge and JMFC, Chikmagalur

(hereinafter referred to as 'Trial Court' for brevity) which was

confirmed by the judgment dated 06.04.2017 passed in

Criminal Appeal No.7 of 2016 by the learned II Additional

Sessions Judge, Chikkamagaluru (hereinafter referred to as

'First Appellate Court' for brevity), for the offence punishable

under Section 138 of the Negotiable Instruments Act (for

short 'NI Act').

2. Brief facts of the case are that, the respondent

herein is the complainant filed private complaint in PCR

No.251 of 2013 against the accused alleging commission of

the offence punishable under Section 138 of the NI Act. It is

alleged that the accused had borrowed a sum of

Rs.5,00,000/- from the complainant as hand loan for the

purpose of improving his coffee estate, agreeing to repay the

said amount. Accordingly, accused issued the cheque bearing

No.885946 dated 24.01.2013 for Rs.5,00,000/- drawn on

Indian Bank, Chikmagaluru towards repayment of hand loan

obtained by him. When the cheque in question was presented

for encashment, the same was dishonored as funds

insufficient. Legal notice was issued to the accused calling

upon him to repay the cheque amount. Legal notice was

served on him. But in spite of that, there was no reply nor

the accused repaid the cheque amount. Thereby, he has

committed the offence punishable under Section 138 of NI

Act. Accordingly, the complainant requested the Trial Court to

take cognizance of the offence and to initiate legal action.

3. The Trial Court took cognizance of the offence and

registered the criminal case in CC No.606 of 2013 for the

above said offence and the accused was summoned to appear

before the Trial Court. The accused appeared before the Trial

Court, pleaded not guilty and claimed to be tried. The

complainant examined herself as PW1 and got marked Exs.P1

to P6 in support of her contention.

4. The accused denied all the incriminating materials

available on record in his statement recorded under Section

313 of Cr.P.C. He also examined DW1 being the Manager of

the Bank and examined himself as DW2 and got marked

Exs.D1 to D7 in support of his defence.

5. The Trial Court after taking into consideration all

these materials on record, came to the conclusion that even

though the complainant has proved the existence of legally

recoverable debt, issuance of cheque and dishonor of the

same for the reason funds insufficient, accused has not

probablised his defence. Therefore, he is liable for conviction.

Accordingly, the impugned judgment of conviction and order

of sentence was passed.

6. Being aggrieved by the impugned judgment of

conviction and order of sentence passed by the Trial Court,

the accused has preferred Criminal Appeal No.7 of 2016

before the First Appellate Court. The First Appellate Court

after considering the contentions of the parties, confirmed the

judgment of conviction and order of sentence passed by the

Trial Court and dismissed the appeal. Being aggrieved by the

same, the accused is before this Court seeking to allow the

revision petition and to set aside the impugned judgment of

conviction and order of sentence passed concurrently by both

the Courts.

7. Heard Sri.M C Jayakirthi, learned counsel for the

revision petitioner and Sri.Girish B Baladare, learned counsel

for the respondent. Perused the materials on record including

the Trial Court records.

8. Learned counsel for the revision petitioner

submitted that a bald complaint was filed alleging that loan of

Rs.5,00,000/- was given to the accused. Date of the said

loan is not stated by the complainant nor she has produced

any document to show her financial capacity to lend the

amount. The accused has taken specific defence that he had

financial transaction with the husband of the complainant and

he had repaid the loan amount that was obtained from her

husband. Since the accused had issued blank cheque as

security in favour of the husband of the complainant, the

complainant misused the same and presented the same for

encashment. Therefore, the offence under Section 138 of NI

Act is not committed by the accused, since there is no legally

recoverable debt. DW1 - the Manager of the Bank spoke

about Exs.D1 and 4. The accused stepped into the witness

box and deposed as DW2. Nothing has been elicited during

the cross examination. The suggestion put to PW1 discloses

that the financial transaction by the accused with the husband

of the complainant is literally admitted. Under such

circumstances, the accused is successful in probablising the

defence taken by him. Both the Trial Court as well as First

Appellate Court ignored these materials on record and

proceeded to convict the accused. Hence, he prays to allow

the revision petition.

9. Per contra, learned counsel for the respondent

opposing the submission made by the learned counsel for the

revision petitioner submitted that the complainant has

categorically stated that the accused had obtained hand loan

of Rs.5,00,000/- for improving his coffee estate. Even though

an attempt was made by the accused to contend that he had

issued blank cheque in favour of the husband of the

complainant and the same was misused by the complainant,

the same has not been probablised. Admittedly, legal notice

issued by the complainant was served on the accused, but

there is no reply. Even if the blank cheque was issued to the

husband of the complainant and the same was not returned to

him, the accused could have instructed the bank to stop

payment, but no attempt was made by the accused. None of

the documents produced by the accused or the evidence of

DWs.1 and 2 are helpful in rebutting the presumption under

Sections 118 and 139 of NI Act. Therefore, the Trial Court as

well as the First Appellate Court are right in convicting the

accused.

10. Learned counsel for the respondent placed

reliance on the decision of the Hon'ble Apex Court in the case

of M/s Kalamani Tex and another Vs P

Balasubramanian1, to contend that once the accused admits

that the cheque and signature found thereon, the

presumption of law arises and burden is on the accused to

rebut the same. In the present case, even though the

defence was taken by the accused, presumption is not

rebutted and the defence is not probablised. Hence, he prays

for dismissal of the revision petition as devoid of merits.

(2021) 5 SCC 283

11. In view of the rival contentions urged by the

learned counsel for the parties, the point that would arise for

my consideration is:

"Whether the revision petitioner has made out any grounds to interfere with the impugned judgment of conviction and order of sentence passed by the Trial Court and which was confirmed by the First Appellate Court?"

My answer to the above point is in 'Negative' for the

following:

REASONS

12. It is the specific contention of the complainant

that she had lent the amount of Rs.5,00,000/- in cash as

hand loan to the accused for the purpose of improving his

coffee estate. Towards repayment of the loan amount, the

cheque was issued by him. The accused has not denied the

contention that Ex.P1 - cheque belongs to him. On the other

hand, he categorically admits that the cheque belongs to his

bank account and it bears his signature. Issuance of legal

notice and non issuance of reply is also not in dispute. The

contention taken by the accused during trial is that,

immediately after receipt of the legal notice, he met the

husband of the complainant and enquired as to why such false

legal notice was issued, for which, the husband of the

complainant replied that he will look into the matter and see

that no complaint is filed. But this defence taken by the

accused is never probablised.

13. The accused is a degree holder. He is having

financial transaction with various banks. He had not thought

it fit to give stop instructions to the bank when the blank

cheque was issued and the same was not returned by the

husband of the complainant. Nor he has issued the legal

notice raising such defence at the earliest point of time.

14. The complainant is examined as PW1 and was

cross examined by the learned counsel for the accused at

length. During cross examination, the defence taken by the

accused is categorically denied. It is the specific contention of

the complainant that she was working as teacher and retired

from service during 2012. The same is admitted by the

accused. Under such circumstances, it cannot be contended

that the complainant was not having sufficient funds with her

to lend the amount. Moreover, she has produced her pass

book of Karnataka Bank as per Ex.P6, which shows that

during December 2012, she had around Rs.2,00,000/-

balance in her bank account.

      15.   DW1     being    Accounts     Manager     of   SBM,

Chikmagaluru is examined on behalf of the accused.           He

admits that Ex.D4 i.e., the challan in respect of Ex.P1 -

cheque. During cross examination of this witness, it is elicited

that there is no rule that contents of cheque are to be written

by the drawer himself. Therefore, evidence of this witness is

in no way helpful to rebut the presumption.

16. The accused examined himself as DW2 to speak

about his defence. He states that during 2004, he had

borrowed the amount of Rs.50,000/- from the husband of the

complainant and had issued the blank cheque drawn on

Indian Bank. He had promised to repay the loan amount

within three years. Subsequently, it was settled between him

and the husband of the complainant. Accordingly, he had

issued two cheques for Rs.50,000/- and both cheques were

encashed by the husband of the complainant. The accused

further states that the blank cheque which he had given was

not returned by the husband of the complainant even in spite

of demand in that regard.

17. The accused categorically admits that Ex.P1

cheque belongs to him and it bears his signature. However,

the contents and other writings found in Ex.P1 are not

admitted. During cross examination, witness admits that the

complainant was working as teacher, but he pleaded his

ignorance that she retired from the service. He admits that

he had no document in support of his contention that the

blank cheque was issued as security in favour of the husband

of the complainant. He was also not having any document to

show that interest was paid to her husband and the financial

transaction between them was settled. However, he denied

the suggestion that Ex.P1 cheque was issued by him towards

legally recoverable debt as he obtained loan of Rs.5,00,000/-

from the complainant.

18. The facts and circumstances of the case narrated

above discloses that the accused categorically admits Ex.P1

cheque belong to his bank account and its bears his signature.

Once the issuance of cheque is admitted, the presumption

under Sections 118 of 139 of NI Act comes into operation and

it is for the accused to rebut the said presumption. Of course,

the accused can rebut the presumption either by cross

examining the complainant or by producing documents or by

stepping into the witness box deposing about the defence. In

the present case, accused examined DW1 and produced

certain documents in support of his defence and he also

stepped into the witness box as DW2. Even though such

contentions were taken by the accused, he never probablised

his defence not the legal presumptions are rebutted.

19. There is no dispute regarding the financial

condition of the complainant to lend the amount of

Rs.5,00,000/- during 2012. When it is the contention of the

accused that he had issued blank cheque during 2004, some

material could have been produced by the accused to

probablise the same. Atleast, he could have issued stop

payment instruction to his bank when the cheque in question

was issued in blank to the husband of the complainant and

there was no legally recoverable debt . No such attempt was

made by the accused and there is no explanation for the

same.

20. The Hon'ble Apex Court in its recent decision in

Kalamani (supra) considered the presumptions under

Sections 118 and 139 of NI Act and the defence that could be

taken by the accused in rebuttal of presumption. It has

referred to its earlier decision in Basalingappa Vs

Mudibasappa and other decisions and held in paras 14, 15,

16 and 18 as under:

"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat in the following words:

"In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant

as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused....."

15. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant-Respondent to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.

      16. No doubt, and as correctly argued by
senior    counsel     for        the    appellants,    the



presumptions         raised   under    Section       118   and

Section 139 are rebuttable in nature. As held in MS Narayana Menon v. State of Kerela, which was relied upon in Basalingappa (supra), a probable defence needs to be raised, which must meet the standard of "preponderance of probability", and not mere possibility. These principles were also affirmed in the case of Kumar Exports (supra), wherein it was further held that a bare denial of passing of consideration would not aid the case of accused.

18. Even if we take the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite Bir Singh v. Mukesh Kumar, where this court held that:

"Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."

(Emphasis supplied)

21. Thus, the position of law is very well settled by

three Judges Bench decision of the Hon'ble Apex Court.

Therefore, the contention of the learned counsel for the

revision petitioner that the accused has raised probable

defence that he had issued blank cheque as security to the

husband of the complainant and he probablised the same,

cannot be accepted.

22. In view of the discussions held above, I am of the

opinion that the complainant is successful in proving the guilt

of the accused beyond reasonable doubt and the accused has

not rebutted the legal presumptions to probablise his defence.