Nagendrasa Vasusa Raibagi vs Mohansa Nagusa Chavan
2022 Latest Caselaw 5512 Kant

                               1




              IN THE HIGH COURT OF KARNATAKA
                      DHARWAD BENCH

           DATED THIS THE 28TH DAY OF MARCH, 2022

                          BEFORE

             THE HON'BLE MR. JUSTICE P.N.DESAI

       CRIMINAL REVISION PETITION NO.100136/2015

BETWEEN:

NAGENDRASA VASUSA RAIBAGI
AGE: 47 YEARS, OCC: BUSINESS
R/O. GHAJENDRAGAD, TQ: RON
DIST: GADAG

                                               ...PETITIONER.

(BY SHRI N.J.APPANNANAVAR, ADVOCATE, FOR SHRI LAXMAN T
MANTAGANI, ADVOCATE.)


AND:

MOHANSA NAGUSA CHAVAN
AGE: 54 YEARS, OCC: BUSINESS
R/O. GHAJENDRAGAD
TQ: RON, DIST: GADAG

                                             ...RESPONDENT.

(BY SHRI S H MITTALKOD, ADVOCATE.)

      THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 READ WITH SECTION 401 OF THE CODE OF
CRIMINAL PROCEDURE, 1973, SEEKING TO SET ASIDE THE
JUDGMENT AND ORDER PASSED BY THE ADDL. DIST. & SESSIONS
JUDGE, GADAG, IN CRL.A.NO.47/2014 DATED 27.03.2015
CONFIRMING THE JUDGMENT AND ORDER PASSED BY THE
SENIOR CIVIL JUDGE & JMFC, RON, IN C.C.NO.213/2013 DATED
30.10.2014 FOR THE OFFENCE PUNISHABLE UNDER SECTION 138
OF THE NEGOTIABLE INSTRUMENTS ACT, 1881, BY ALLOWING
THE ABOVE CRIMINAL REVISION PETITION, ETC.,.
                                    2




     THIS PETITION HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 4.3.2022, COMING ON FOR PRONOUNCEMENT OF
ORDERS THIS DAY, THE COURT PASSED THE FOLLOWING:


                                 ORDER

This revision petition is filed challenging the

judgment dated 27.3.2015, passed by the Addl. District

and Sessions Judge, Gadag, in Crl.A.No.47/2015, wherein

the appeal came to be allowed and the judgment of

conviction and order of sentence dated 30.10.2014, passed

by the Senior Civil Judge and JMFC, Ron, in

C.C.No.213/2013, is set aside and the appellant/accused is

acquitted for the offence punishable under section 138 of

the Negotiable Instruments Act, 1881.

2. The revision petitioner was complainant before

the trial Court and respondent is accused. They will be

referred as complainant and accused as per their

respective ranks before the trial Court for convenience in

this revision petition.

3. The complainant filed a complaint before the

JMFC Court contending that the accused is his relative and

accused was in need of money for his domestic needs.

Therefore, accused borrowed a hand loan of Rs.3,00,000/-

from complainant and assured that he will repay the same

within 5-6 months. When the complainant requested the

accused after five months to return the money as agreed,

the accused issued a cheque bearing no.011285 for

Rs.3,00,000/- dated 22.4.2010 drawn on

S.S.K.Co-operative Credit Society, Ilkal, in the name of the

complainant. Then the complainant presented the cheque

with the banker. The same was returned dishonoured with

an endorsement 'drawer stopped payment'. Then the

complainant issued a statutory legal notice on 19.8.2010,

which was served upon the accused on 21.8.2010. He has

given a false reply and not repaid the amount. Therefore,

the complainant lodged a complaint stating that the

accused has committed the offence punishable under

section 138 of the Negotiable Instruments Act, 1881.

4. Before the trial Court, the complainant himself

got examined as PW.1 and also got examined Manager of

the Bank as PW.2. Eight documents were marked as

Exs.P.1 to P.8. The accused has not adduced any defence

evidence nor any documents were marked on his behalf.

After hearing the arguments, the learned JMFC convicted

the accused for the offence punishable under section 138

of the Negotiable Instruments Act, 1881 and sentenced the

accused to undergo simple imprisonment for six months

and ordered Rs.5,00,000/- to be paid as compensation

under Section 357(3) of Cr.P.C. and in default to pay the

compensation amount, to undergo simple imprisonment for

a period of three months. Aggrieved by the same, the

accused preferred appeal before the learned District and

Sessions Judge, wherein the learned Sessions Judge after

hearing the parties set aside the said judgment of

conviction and order of sentence by the impugned order,

which is now assailed in this revision.

5. Heard Shri N.J.Appannanavar, the learned

counsel for the petitioner and Shri S.H.Mittalkod, the

learned counsel for the respondent.

6. The learned counsel for the petitioner argued

that the learned Sessions Judge has erred in appreciating

the evidence in a proper perspective. Though the signature

and cheque are admitted by the accused, and he has

issued notice, the same is not properly appreciated by the

learned Sessions Judge. Both the parties are known to

each other. The appellate Court committed error in

assessing the evidence of complainant. PW.1 has got a

hand loom business and he has got a financial capacity to

pay such amount. The learned Sessions Judge instead of

confirming the judgment of conviction has wrongly

acquitted the accused which needs to be set aside.

7. Against this, the learned counsel for the

respondent Shri S.H.Mittalkod argued that the learned

Sessions Judge has rightly appreciated the evidence and

the complainant has failed to prove that he has capacity to

lend the said amount. In fact the cheque was lost by this

accused/respondent. Accordingly he has given a reply

notice Ex.P.8 to show that he lost the cheque in a hotel

near Gajendragad. He has intimated the bank to stop

payment. It is also contended that there is a dispute

between the complainant and accused regarding one

property and a civil suit has been filed and just to take

revenge, the complainant has misused one of the cheque

through his nephew Narayansa. The learned Sessions

Judge has considered all the aspects and referring to the

evidence of Bank Manager has held that the complainant

has failed to prove the case as there is no money

transaction proved, the learned Sessions Judge has rightly

set aside the judgment of conviction and hence argued to

dismiss this revision petition.

8. I have perused the revision petition, judgments

of both the Courts and records of the case. From the above

materials the point that arises for my consideration is as

under:

"Whether the judgment passed by the learned Sessions Judge in Crl.A.No.47/2014 is legally correct and the appreciation of evidence is based on sound principles regarding appreciation of evidence in the offence under the provisions of Negotiable Instruments Act, 1881, which is popularly called as cheque bounce case?"

9. I have perused the written complaint which is

filed by the petitioner and also his examination-in-chief. It

is stated in the examination-in-chief affidavit that the

accused is his close relative and as he was in need of

money, he borrowed hand loan and in discharge of that

hand loan, after 5-6 months he has issued this cheque.

The complainant has produced the said cheque which is at

Ex.P.1 which shows that the cheque was issued in favour

of the complainant for Rs.3,00,000/-. Signature on it is

also not disputed by the accused. It is also evident that the

said cheque was returned with a shara 'payment stopped'

by the bank. Ex.P.4 is the bank challan. Ex.P.6, P.7 are the

postal receipt and postal acknowledgment. Ex.P.5 is the

legal notice and Ex.P.8 is reply notice. So on perusing the

material, prima facie the complainant has made out the

ingredients of offence punishable under section 138 of the

Negotiable Instruments Act, 1881.

10. It is the defence of the accused that he has lost

the cheque. PW.1 in his evidence has stated that he is

getting about Rs.2,00,000/- income per year. He has also

stated that he is getting income from hand looms business.

He has stated that he has not taken any promissory note

and he has not fixed any interest as accused is his relative.

The complainant has stated that he has no knowledge that

Narayansa filed a suit against this accused. Some

suggestion was made that the accused lost 10 cheques

while going to Bhagya Nagar. The complainant has

expressed his ignorance. He has denied suggestion that

Narayansa has committed theft of one cheque and got filed

a false case through the complainant. It is suggested that

the complainant is doing clothe business with an

investment of Rs.10,000/-. He has denied it. Except some

suggestion, there is nothing in the cross-examination so as

to disbelieve his evidence. The evidence of complainant

that he is getting amount from the hand loom business and

he has kept the amount collected out of the income and

given it to the accused is not denied. There is no denial of

evidence of complainant about the financial capacity.

11. One witness Manikprabhu is examined as PW.2

and he has stated that the said cheque Ex.P.1 was

returned with an endorsement from the SBM Ilkal as per

Ex.P.2 and Ex.P.3 as the payment was stopped. In the

cross-examination he has stated that he does not know

who has given stop payment to Ilkal Co-operative Society.

He has stated that generally if a cheque is lost, a holder of

cheque book will intimate stop payment.

12. It is evident that Ex.P.1 cheque is admittedly

belongs to the account of accused. The signature on

cheque is also admitted by the accused. The complainant

has issued statutory notice which is served on the accused

and accused has given reply. Under section 118 and 139 of

the Negotiable Instruments Act, 1881, there is a

presumption in favour of holder of the cheque. In this

regard the Hon'ble Supreme Court in Rangappa vs. Sri

Mohan, reported in (2010) 11 SCC 441 has laid down

the principles, which is referred subsequently in number of

decisions. The Hon'ble Supreme Court in a decision

reported in (2002) 1 SCC 234 in the case of MMTC

Limited and another vs. MEDCHL Chemicals and

Pharma (P) Ltd. and another, held that once the

accused admitted his signature on Ex.P.1, it is for the

accused to rebut the presumption available under Section

139 of the Negotiable Instruments Act, 1881. In this

regard in the decision in Dhakshayani vs. Malathi

Dayan, reported in 2012 (5) Kar.L.J. 165, this Hon'ble

Court has stated as under:

Questioning an order of conviction and the consequential sentence imposed by the learned Magistrate for an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the Act') and having failed in Cri. A. No. 25124 of 2010, on the file of the Sessions Court at Bangalore, accused has filed this criminal revision petition.

2. Sri Hiremathad, learned Advocate appearing for the petitioner contended that the petitioner has been convicted for an offence under Section 138 of the Act, when the ingredients necessarily to be established have not been established by the respondent- complainant. Learned Counsel submitted that the defence of the accused has not been correctly appreciated and hence, impugned judgments being perverse, interference in the matter is necessary.

3. Sri M.D. Raghunath, learned Advocate appearing for the respondent, on the other hand, contended that the issuance of Ex.P.1 being not in dispute and that the same having been returned by the bank, whereafter a demand was made and the payment having not been made, complaint was filed and the offence committed by the accused having been established by the evidence of P.W.1, and on the basis of Exs. P.1 to P.17, learned Magistrate is justified in finding the accused guilty and in imposing the sentence. Learned Counsel submitted that the Appellate Court

has re-appreciated the evidence and the appeal having been found to be devoid of merit, was dismissed. Learned Counsel submits that in view of the concurrent finding of fact by the Courts below, no interference in the matter is called for.

4. Perused the record. In view of the rival contentions, point for consideration is, whether the Courts below are justified in holding the petitioner guilty of an offence under Section 138 of the Act?

5. Petitioner does not dispute the fact of she having entered into an agreement of sale dated 5-9-2007 with the respondent vide Ex.P.1. The sale transaction did not materialize. Hence she issued the cheques Exs.P.6 to P.9 towards refund of the advance sale consideration amount received pursuant to Ex. P.1. Said cheques when presented, were returned vide Exs.P.10 to P.13. Immediately, upon return of the cheques at Exs. P.6 to P.9, demand notice vide Ex.P.14 was sent, to which there is a reply as per Ex.P.17. It can be seen from Ex. P.17, that the petitioner sought time to pay the amount payable under the cheques i.e., Exs. P.6 to P.9. Since the amount was not paid, complaint under Section 200 of the Criminal Procedure Code. 1973 for the offence under Section 138 read with Section 142 of the Act was filed.

6. Complainant deposed as P.W.1.

Nothing material has been elicited in the evidence of P.W.1 to hold that the claim made by her based on Exs. P.6 to P.9, P.10 to P.13 and P.14 is not tenable. In a complaint under Section 200 of Cr.P.C. for the offence under Section 139 of the Act, the Court has to presume that the cheque has been issued for

a debt or liability. Accused was examined under Section 313 of Cr. P.C. and it is a case of denial. Though the accused deposed later as D.W.1 and marked Exs. D.1 and D.4, the defence being not probable and inconsistent with the stand taken in Ex. P.17, the presumption having not been rebutted, learned Magistrate is justified in recording the finding of guilt of the accused under Section 138 of the Act.

7. There is neither any perversity nor illegality committed by the Courts below in the matter of appreciation of evidence. The ingredients to punish the accused for the offence under Section 138 of the Act has been made out. Hence, the petition is devoid of merit.

13. In the light of these principles if the present

case is considered, then it is evident that it is the defence

of the accused that he was going along with one

Narayansa Raibagi to some village in the year 2006 and he

kept signed cheque in his bag. When they were taking tea

in a hotel, there was theft of his bag. According to

accused, the said Narayansa has filed a civil suit against

him and he has given one of the cheque to this

complainant and got filed the case.

14. This defence of accused rests with his defence

only. There is no iota of evidence placed before the Court

to show that Narayansa accompanying him in the year

2006 and he lost the cheque and the said Narayansa has

misused the cheque after nearly four years of theft of

cheque and got lodged the complaint.

15. Once the complainant is able to show by his

oral and documentary evidence that the accused has

issued the cheque, which is admitted by the accused and it

was returned and dishonoured, the presumption arises in

favour of the complainant. The accused can rebut such

presumption by two ways.

a) First is by cross examining the complainant and his witnesses if any and show before the Court that the case of complainant is not true. This he can do by showing preponderance of probabilities.

b) The second is, the accused himself can lead defence evidence in support of defence taken by him. If the Court considers the defence evidence of accused is probable, again the burden shifts on the complainant to show that defence of the accused is not tenable.

16. In this regard there is a decision of the Hon'ble

Supreme Court in the case of Kalamani Tex and another

Vs. P. Balasubramanian reported in (2021) 5 SCC 283

considered the presumption under N.I Act and how the

accused has to rebut such presumption. It is held at

paragraph No. 13 as under:

"13. 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 crystallised by this Court in Rohitbhai Jivanlal Patel V. State of Gujarat (2019) 18 SCC 106, in the following words :(SCC pp.120-21, para 18)

18. In the case at hand, even after purportedly drawing the presumption under section 139 of 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 favor, 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."

17. Further the Hon'ble Supreme court in case of

APS FOREX SERVICES PRIVATE LIMITED Vs. SHAKTI

INTERNATIONAL FASHION LINKERS AND OTHERS -

(2020) 12 SCC 724 considered in detail the presumption

under N.I Act and held that when the financial capacity of

the complainant is not questioned, then there is no

necessity for the complainant to adduce evidence in proof

of his financial capacity. It is held at paragraph Nos.8, 8.1,

8.2 and 8.3 as under:

8. On the presumption under Section 139 of the N.I. Act, few decisions of this Court are required to be referred to and considered.

8.1 In K.N. Beena V. Muniyappan, (2001) 8 SCC 458, it is observed and held

by this Court that under Section 118 of the N.I. Act, unless the contrary is proved, it is to be presumed that the negotiable instruments (including a cheque) had been made or drawn for consideration. It is further observed and held that under Section 139, the Court has to presume, unless the contrary is proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. It is further observed that thus, in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that the cheque has not been issued for a debt or liability is on the accused.

8.2 In Rangappa Vs Sri Mohan, (2010) 11 SCC 441 again, this Court had an occasion to consider the presumption of existence of a legally enforceable debt or liability under Section 139 of the N.I. Act. In the aforesaid decision, after considering other decisions of this Court on Sections 118(a) and 139 of N.I. Act, it is observed and held that there exists a presumption which favours the complainant. It is further observed that the presumption under Section 139 of the N.I. Act is in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein there is existence of legally enforceable debt or liability can be contested. In Para 27 this Court observed and has held as under:(SCC PP.453-

54)

"27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a

strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant

- accused cannot be expected to discharge an unduly high standard of proof."

8.3 In Kishan Rao Vs. Shankargouda, (2018) 8 SCC 165 after considering the decision of this Court in Kumar Exports V. Sharma Carpets, (2009) 2 SCC 513, it is observed and held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. This Court in para 19 of that judgment considered paras 14, 15, 18 & 19 of the decision in Kumar Exports (2009) 2 SCC 513 as under: (Kishan Rao V.

Shankargouda, (2018) 8 SCC 165, SCC PP.171-72)

19. This Court in Kumar Exports v.

Sharma Carpets (2009) 2 SCC 513, had considered the provisions of the Negotiable Instruments Act as well the Evidence Act. Referring to Section 139, this Court laid down the following in

paras 14, 15, 18 and 19 : (SCC pp.519-

20)

"14. Section 139 of the Act provides that it shall be presumed, unless the contrary isproved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.

15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence.

Under the Evidence Act, all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions"

(irrebuttable). The term "presumption" is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof".

* * *

18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident

that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.

19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as

presumed, the purpose of the presumption is over."

18. In the light of these principles if the defence of

the accused is considered, then this defence rests with his

reply notice only. If at all he has lost the cheque, as stated

in his explanation in the statement recorded under section

313 of Cr.P.C., he could have lodged the complaint with

the police. One carbon copy of the letter stated to be

addressed to the SSK bank dated 5.6.2006 is produced

along with written statement. But no evidence is adduced

calling upon any officials of the bank to prove his

contention and to show that he has intimated the bank

about theft of cheques. To whom he was giving signed

blank cheques at Bhagyanagar, why they asked him blank

cheques, what happened to his other cheques, mentioned

in reply? No explanation is forthcoming. No bank statement

is produced to show that he had any move in his bank on

the date he lost the cheque, no persons were examined to

prove it. If at all he has lost the cheque in the year 2006

itself, then how one cheque came in possession of this said

Narayansa is also not forthcoming; why he has misused

only one cheque if there are six cheques is also not

forthcoming. Why this Narayansa waited for four years to

institute a case through this complainant is also not

forthcoming. Therefore, simply taking such defence

without any basis, without producing any iota of evidence

and giving such a reply will not help the accused in any

way. Therefore, such a contention or defence of the

accused has no basis at all and will not help him in any

way.

19. The accused has not entered the witness box

and asserted on oath whatever defence he has taken in the

light of defence taken by him. Generally no person will

keep with him for 4-5 years some signed cheques and give

it to another person to file a complaint. Such a defence is

neither probable nor tenable. Neither he has examined the

manager of the said bank to show what happened to those

cheques nor he has produced any material to show that

what is the reason for stop payment, who given it.

Therefore, though the learned JMFC has appreciated the

evidence in a proper perspective and considered all the

materials, the learned Sessions Judge has erred in

appreciating the evidence. The learned Sessions Judge has

wrongly come to a conclusion that expenditure of

complainant is more than his income and status of the

complainant also shows that he has no such income.

20. The First Appellate Court has unnecessarily put

the burden on the complainant stating that though accused

was working as a labourer, the complainant has not taken

precautionary measure and not made enquiry with the

accused what is the reason for loan. Such an observation

has no basis at all and it is common that the persons in

Ilkal area who are having hand looms and power looms

business are earning huge amount. The learned Sessions

Judge failed to note the contention of the complainant that

himself and accused are known to each other and they are

relatives, is not denied. Simply because stop payment was

given, that does not mean that the accused has lost the

cheque. The learned Sessions Judge has wrongly

interpreted the evidence of PW.2 which is a general

statement that if generally a cheque is lost, a person could

issue intimation to the bank 'stop payment', but that is not

with regard to the cheque of accused. The accused has not

led any evidence or the manager of the said bank to show

that because of loss of cheque, he has issued 'stop

payment'.

21. The financial capacity of the complainant is

never disputed. Simply because PW.1 has not filed income

tax returns, that does not mean that he has no sufficient

income from the business. It is stated that complainant

has not produced his bank balance sheet. Such an

observation of the leaned Sessions Judge is without there

being any evidence. The learned Sessions Judge has not

properly appreciated the examination-in-chief and cross-

examination evidence. He has ignored settled principles

regarding appreciation of evidence in cheque bounce case

and imagined on his own certain things which are not

based on any material. The financial capacity of the

complainant was never in question. Admittedly the

occupation of both the complainant and accused is shown

as business. In the complaint he has stated that

complainant has kept the amount which he received from

the business in his house, so question of producing bank

statement does not arise.

22. On the other hand, the learned Sessions Judge

failed to note that the defence taken by the accused itself

is improbable one. If at all somebody stolen the cheque

and misused it, definitely legal action will be taken against

them by the person who has lost the cheque. But the

accused has not at all filed any criminal case against the

said Narayansa or against this complainant. Accused has

not entered the witness box and substantiated his defence.

On the other hand, both oral and documentary evidence

placed by the complainant coupled with the presumption

under the provisions of N.I.Act, the complainant has

successfully discharged his burden. On the other hand the

accused has failed to discharge the onus shifted upon him

to show by preponderance of probabilities complainant's

case is not acceptable. Hence the judgment passed by the

learned Sessions Judge is illegal, perverse and not based

on sound principles regarding appreciation of evidence in

N.I.Act case. On the other hand the learned trial Judge has

properly appreciated the evidence and has rightly come to

the conclusion that the accused has committed the offence

under section 138 of N.I.Act.

23. The learned counsel for the petitioner has relied

upon the decision of the Hon'ble Supreme Court in (2019)

4 SCC 197 in the case of Bir Singh vs. Mukesh Kumar,

wherein the Supreme Court in paragraph nos.32, 33, 34,

35, 36 and 37 has discussed section 20, 87, 139 of the

Negotiable Instruments Act, 1881 and effect of signed

blank cheque and it is also held that the presumption

under section 139 of N.I.Act, in the absence of cogent

evidence to show that cheque was not issued in discharge

of debt. The learned counsel also relied upon another

decision of the Hon'ble Supreme Court reported in (2018)

8 SCC 165 in the case of Kishan Rao vs.

Shankargouda wherein at paragraph nos.21 to 24 the

Honb'le Supreme Court referred to the decision of its

earlier three judges bench decision in Rangappa vs. Sri

Mohan (supra) and elaborated the presumption under

section 139 of the Negotiable Instruments Act, 1881 and it

is held in that case also taken defence in the reply notice

that the cheque was stolen has been rejected in view of

the presumption. The said defence by the accused is

negatived.

24. Further, the learned counsel also relied upon

another decision in Goa Plast (P) Ltd. vs. Chico Ursula

D'souza, reported in (2004) 2 SCC 235 wherein it is

held that simply giving stop payment to the bank will not

help the accused to show that he has lost the cheque. On

the other hand, it is required to show that he had sufficient

funds in the account as on the date of signing and

presentation of the cheque on the date when the letter

denying liability was written to the complainant and on the

date of issuing instruction for stop payment. In that case

also bank manager was not examined to show that he had

sufficient funds in his account for payment. The Hon'ble

Supreme Court held that offence under section 138 of the

N.I.Act would be made out and at paragraph no.25 it is

held as under:

25. In the instant case, the cheque issued by the respondent has been stopped for payment on his instructions and the cheque was returned to the appellant unpaid. In view of our discussion in the foregoing paragraphs and on the consideration of the facts and circumstances of the case and the law on the subject, we hold that the respondent shall be deemed to have committed an offence. When the matter was taken up for further hearing on 17.11.2003, learned counsel for the respondent submitted that this Court may consider the case of the respondent and the reason for his inability to pay the amount and may consider imposing lesser sentence by taking a lenient view. We are unable to countenance the said submission for the various reasons stated supra. We have no doubt that the respondent has committed an offence punishable under the provisions of Section 138 of the Act and is liable to be punished. The transaction in question took place between the parties in the year 1993, therefore, Section 138, as it stood at the relevant time, would be applicable to the present case. Section 138 provides imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both. Section 138 has now been amended and the penalty of imprisonment for a term which may extend to one year has been substituted to two years as provided by the Amending Act of 2002 and the fine which may extend to twice of the amount of the cheque. This has been prescribed as the punishment for the offence under Section 138 of the Act.

25. In view of the principles stated in the above

referred decision and the discussions made above, in my

considered view if the impugned judgment of the learned

Sessions Judge is considered, then it is evident that the

said judgment is illegal, perverse and not based on settled

principles regarding appreciation of evidence in dishonour

of cheque cases which needs to be set aside.

26. However though the conviction of the accused

for the offence punishable under section 138 of the

Negotiable Instruments Act, 1881 is to be confirmed but

the order of sentence of imprisonment needs to be set

aside. Because the accused and the complainant are

relatives and only for domestic and financial difficulties the

loan was borrowed and it is not for any commercial

purpose.

27. The Hon'ble Supreme Court in a decision

reported in 2021 SCC Online SC 788 in the case of

Triyambak S. Hegde Vs. Sripad has referred the

decision of Kaushalya Devi Massand Vs. Roopkishore

reported in AIR 2011 SC 2566 and has held that it is not

like IPC cases wherein the sentence of imprisonment is

called. On the other hand they are like a regulatory

offences for recovery of the amount paid. It is held at

paragraphs no.21 and 22 of the above decision as under:

21. Having arrived at the above conclusion, it would be natural to restore the judgment of the Learned JMFC. Though in that regard, we confirm the order of conviction, we have given our thoughtful consideration relating to the appropriate sentence that is required to be imposed at this stage, inasmuch as: whether it is necessary to imprison the respondent at this point in time or limit the sentence to imposition of fine. As noted, the transaction in question is not an out and out commercial transaction. The very case of the appellant before the Trial Court was that the respondent was in financial distress and it is in such event, he had offered to sell his house for which the advance payment was made by the appellant. The subject cheque has been issued towards repayment of a portion of the advance amount since the sale transaction could not be taken forward. In that background, what cannot also be lost sight of is that more than two and half decades have passed from the date on which the transaction had taken place. During this period there would be a lot of social and economic change in the status of the parties.

Further, as observed by this Court in Kaushalya Devi Massand V. Roopishore Khore, (2011) 4 SCC 593, the gravity of complaint under N.I Act cannot be equated with an offence under the provisions of the Penal Code, 1860 or other criminal offences. In that view , in our opinion, in the facts and circumstances of the instant

case, if an enhanced fine is imposed it would meet the ends of justice. Only in the event the respondent-accused not taking the benefit of the same to pay the fine but committing default instead, he would invite the penalty of imprisonment. Hence, appropriate modification is made to the sentence in the manner as indicated hereinbelow:

22. For all the aforestated reasons, the following order;

(i) The order dated 01.12.2009 passed by the High Court in Criminal Revision Petition No. 1282/2006 and 1481/2006 are set aside.

(ii) The conviction ordered in C.C No. 790/2000 by the learned JMFC is restored.

(iii) The sentence to undergo simple imprisonment for six months and fine of Rs.2,00,00/- (Rupees two lakhs only) is however modified. The Respondent/Accused is instead sentenced to pay the fine of Rs.2,50,000/- (Rupees two lakhs fifty thousand only) within three months. In default of payment of fine the Respondent/Accused shall undergo simple imprisonment for six months.

(iv) From the fine amount, a sum of Rs.2,40,000/- (Rupees two lakhs forty thousand only) shall be paid to the Appellant/Complainant as compensation.

(v) The Appeals No. 849-850/2011 are accordingly allowed in part.

(vi) The pending applications, if any, stand disposed of."

28. Therefore, in my considered view the order of

sentence of imprisonment for sox months needs to be set

aside by modifying it to fine of Rs.5,000/- only and the

order of payment of Rs.5,00,000/- as compensation is to

be upheld.

29. In the result, I pass the following:

ORDER

i) The revision petition is allowed in part.

ii) The judgment dated 27.3.2015, passed by the Addl. District and Sessions Judge, Gadag, in Crl.A.No.47/2015, acquitting the accused is set aside.

iii) The judgment of conviction dated 30.10.2014, passed by the Senior Civil Judge and JMFC, Ron, in C.C.No.213/2013 convicting the accused for the offence punishable under section 138 of the Negotiable Instruments Act, 1881 is confirmed.

iv) The order of sentence of imprisonment for a period of six months

passed by the learned JMFC is set aside and modified as fine of Rs.5,000/-.

v) The accused is sentenced to pay fine amount of Rs.5,000/- and in default of payment of fine amount, he shall undergo simple imprisonment for a period of one month.

             vi)   The    order     of    payment     of
        compensation     of   Rs.5,00,000/-   to     the

complainant by accused is confirmed and upheld. The said compensation amount shall be paid to him within six months.

Sd/-

JUDGE Mrk/-