Karnataka High Court

A B Gowda (Babu) vs R M Jagadish Gowda on 11 August, 2023

Bench: J.M.Khazi

                          1            CRL. A NO.71 OF 2012




   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 11TH DAY OF AUGUST, 2023

                       BEFORE

           THE HON'BLE MS.JUSTICE J.M.KHAZI

           CRIMINAL APPEAL NO.71 OF 2012

BETWEEN:

A.B. GOWDA (BABU),
S/O. LATE ANDANAPPA,
AGED ABOUT 48 YEARS,
R/AT: ANDANAPPA ROAD, KAMAKSHIPALYA,
BASAVESHWARANAGARA POST,
BENGALURU - 560 079.
                                           ...APPELLANT
(BY SRI. CHETHAN B.R, ADVOCATE FOR
    SRI. N. SHIVAKUMAR, ADVOCATE)

AND:

R.M. JAGADISH GOWDA,
S/O. MAYANNA GOWDA,
NO.196, 6TH CROSS,
SARASWATHIPURAM,
MAHALAXMI LAYOUT,
BENGALURU - 560 086.

(ALSO AVAILABLE AT #602,
UHBCS LAYOUT, I BLOCK,
III STAGE, BASAVESHWARNAGAR,
BENGALURU - 560 085.)
                                       .....RESPONDENT

(BY SRI. PRAVEEN HEGDE, ADVOCATE)

   THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET ASIDE
THE JUDGMENT OF ACQUITTAL DATED 16.11.2011 PASSED
BY THE XXII ACMM, BENGALURU CITY IN C.C.NO.19661/2007
FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF
                                  2            CRL. A NO.71 OF 2012




N.I.ACT AND FURTHER BE PLEASED TO CONVICT AND
SENTENCE THE RESPONDENT / ACCUSED FOR THE SAID
OFFENCE SO ALSO TO COMPENSATE THE APPELLANT /
COMPLAINANT SUITABLY IN ACCORDANCE WITH LAW, IN
THE ENDS OF JUSTICE.

     THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED    ON    16.06.2023, COMING   ON   FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:


                       JUDGMENT

1. Being aggrieved by the dismissal of the

complaint filed by him under Section 200 Cr.P.C against

the respondent/accused for the offence punishable under

Section 138 of Negotiable Instrument (for short "N.I.

Act"), appellant who is complainant has filed this appeal

under Section 378(4) of Code for criminal procedure (for

short "Cr.P.C.").

2. For the sake of convenience the parties are

referred to by their rank before the trial Court.

3. Complainant filed the complaint contending

that he entered into joint development agreement dated

15.04.2004 with one K.K.Thimarayappa with regard to

land in survey No.9/2 measuring 2.08.08 acre of

Herohalli village. Infact he started developing the said 3 CRL. A NO.71 OF 2012

land by spending huge amount. Due to family dispute of

K.K.Thimarayappa, the deal could not be concluded. In

the mean while, accused expressed his desire to

purchase the said land and agreed to pay complainant

Rs.9,00,000/- towards the money spent by him for

development of the said land and issued two post

cheques i.e., dated 17.12.2006 for Rs.2,00,000 and

15.01.2007 for Rs.7,00,000/-. Though the cheque for

Rs.2,00,000/- was realized, the one for Rs.7,00,000/-

was dishonored for want of sufficient funds. Complainant

got issued legal notice. Accused has intentionally failed to

receive it. Hence, the complaint.

4. After due service of notice, accused appeared

and contested the matter. He pleaded not guilty and

claimed trial.

5. In support of his case, complainant examined

himself as PW.1. He examined 3 witnesses as P.Ws.2 to

4 and relied upon Exs.P.1 to 16.

6. During the course of his statement, accused

has denied the incriminating evidence.

4 CRL. A NO.71 OF 2012

7. Accused has examined as D.W.1 and relied

upon Ex.D.1 to 8.

8. Vide the impugned judgment and order, the

trial Court dismissed the complaint.

9. Being aggrieved by the same, complainant

has filed this appeal contending that the impugned

judgment and order are opposed to the general principles

of law, facts, circumstance and probabilities of the case

on hand. The trial Court has erred in not raising

presumption under Section 139 of N.I.Act. The trial Court

has erred in accepting defence of the accused that he

lent Rs.9,00,000/- to the complainant and purposely

allowed the subject cheque for Rs.7,00,000/- to be

dishonored on the ground that, complainant has not

executed necessary documents. The trial Court has erred

in holding that the notice is not duly served on the

accused, though he failed to receive it despite intimation

delivered. The trial Court has erred in relying upon

defence document, more particularly, Exs.D.3 and 4

which are concocted. The findings of the trial Court are 5 CRL. A NO.71 OF 2012

contrary to the evidence placed on record and as such,

perverse and prays to allow the appeal, convict the

accused and sentence him accordingly.

10. On the one hand, learned counsel for accused

supported the impugned judgment and order and prays

to dismiss the appeal.

11. Heard elaborate arguments of both sides and

perused the records.

12. Thus, it is the definite case of the complainant

that though initially he entered into a sale agreement and

joint venture for development of land in Sy.No.9/2 for

formation of sites with the owner K.K.Thimmarayappa,

on account of litigation initiated by his family members,

he was forced to back of. However, in the meanwhile he

had made some investment and when accused decided to

purchase the same property for a higher price, he agreed

to compensate the complainant by paying Rs.9,00,000/-

and in this regard, he issued two cheques for

Rs.2,00,000/- and Rs.7,00,000/-. Infact, the cheque for

Rs.2,00,000/- was encashed, but the one for 6 CRL. A NO.71 OF 2012

Rs.7,00,000/- was dishonoured for want of sufficient

funds. Complainant has alleged that intentionally the

accused has failed to receive the statutory notice and

consequently to comply with it, or atleast to send reply

and without any alternative, he has prosecuted the

complainant for the offence punishable u/sec.138 of N.I.

Act.

13. Though the accused admit of having issued

cheques for Rs.2,00,000/- and Rs.7,00,000/- to the

complainant, he has disputed that they were issued to

compensate the complainant. He has denied that before

he purchased the land in Sy.No.9/2 from

K.K.Thimmarayappa, there was an agreement between

K.K.Thimmarayappa and complainant for sale of said

property and joint development. Accused has specifically

contended that complainant has borrowed loan of

Rs.9,00,000/- from him and the two cheques in question,

were issued towards the same. However as the

complainant failed to execute documents, he did not

arrange for honoring the cheque for Rs.7,00,000/-. So

far as issue of legal notice is concerned, the accused has 7 CRL. A NO.71 OF 2012

taken up a defence that by the time the notice was

issued, he was no longer residing in the address to which

it was sent and as such, there is no service of statutory

notice and consequently he could not send the reply.

14. Having regard to the fact that the accused

admit that the cheque in question for Rs.7,00,000/- is

issued by him in favour of the complainant, drawn on his

account maintained with his banker and it bears the

signature, presumption u/sec.118 and 139 of N.I. Act is

operating in favour of the complainant that the subject

cheque was issued towards legally recoverable debt or

liability and the burden is on the accused to rebut the

said presumption by establishing his defence.

15. Now coming to the defence of the accused

that he is not residing in the address to which the legal

notice was sent. Ex.P.10 is the postal envelop through

which statutory notice was sent to the accused. The

endorsement on it dated 07.05.2007 made by postman-1

(PM.1) is "left not known". It appears the postal

authorities have made another attempt to deliver the 8 CRL. A NO.71 OF 2012

said postal envelop and the same was entrusted to the

postman of 2nd beat and he visited the said address

twice i.e on 09.05.2007 and 10.05.2007 and found the

door locked and delivered intimation. It is an intimation

in prescribed proforma (RP 52) left at the address,

directing the addressee to collect the post/parcel from

the concerned post office by producing proper

identification. This fact is forthcoming from the

endorsement "door locked intimation delivered".

Admittedly despite delivery of intimation, accused has

not chosen to receive the envelop. This also creates

doubt whether the accused really left the address or has

intentionally failed to receive the envelop despite

intimation given to him.

16. The accused has relied upon Ex.D.1 which is a

ration card (APL card) issued by the Food and Civil

Supplies Department. It is issued on 21.03.2007. In this

document the address of accused is given as No.302

UHBCS layout, first block, third stage, Basaveshwara

nagar, Bangalore. The accused has not placed any

material to show that earlier to Ex.D.1 he was having a 9 CRL. A NO.71 OF 2012

ration card (APL Card) showing his earlier address. That

could have been helpful to prove that subsequent to the

issue of cheque of Ex.P.5, he shifted his residence. It is

relevant to note that as per Ex.P.3-sale deed dated

28.07.2006 accused has purchased land in Sy.No.9/2

measuring 2.08.08 acres for total sum of

Rs.1,11,25,000/-. Having regard to the fact that he is

having the capacity to spend more than one crore rupees

to purchase the said land, it is quiet evident that he is

not eligible for holding ration card at Ex.D.1 and in

absence of any other document to prove that subsequent

to issue of Ex.P.6-cheque he has changed his residence,

this Court is not having any hesitation to hold that Ex.D.1

is secured only for the purpose of this case.

17. Moreover, when summons was sent to the

accused to the address given in the complaint, to which

the legal notice was sent, he failed to appear before the

Court. Therefore, the trial Court was pleased to issue

NBW against him. The concerned police have submitted

report stating that though repeatedly the concerned

police went to the address he was not available and have 10 CRL. A NO.71 OF 2012

sought for further time to apprehend and produce him

before the Court. The report does not state that accused

is not residing in the said address. If accused had shifted

from the said address the report would have been to that

effect. In the mean while before police could arrest him,

he has appeared before the trial Court and secured bail.

This also creates doubt as to the defence of the accused

that the statutory notice is not served on him.

18. It is pertinent to note that out of the two

cheques said to have been issued by the accused to the

complainant for advancing the alleged loan, the cheque

for Rs.2,00,000/- was dated 17.12.2006 and the subject

cheque for Rs.7,00,000/- is dated 15.01.2007.

Admittedly as per Ex.P4 the cheque for Rs.2,00,000/- is

encashed on 18.12.2006 by the complainant. The ration

card at Ex.D1 dated 21.03.2007 is subsequent to issue of

these two cheques and encashment of cheque for

Rs.2,00,000/-. Though the accused has contended that

he allowed the cheque for Rs.2,00,000/- to be encashed

and since the complainant failed to handover him

property documents and also execute documents for 11 CRL. A NO.71 OF 2012

security of the alleged loan borrowed by him, he i.e.

accused did not arrange for honouring the subject

cheque at Ex.P5 for Rs.7,00,000/-, admittedly he has not

given any instructions to his banker to stop payment of

the same. If at all he intentionally failed to arrange for

payment of Ex.P5 for the reason that complainant failed

to execute necessary documents, there was no

impediment for him to instruct his banker to stop

payment. This creates doubt as to the veracity of the

defence of the accused and that Ex.P5 and another

cheque were issued for advancing loan to the

complainant.

19. Such being the case, in the absence of further

proof the defence of accused that he shifted his residence

from the address to which legal notice was sent and as

such, it was not served on him cannot be accepted. He

could have produced some further documents such as

any subsequent communications made to him through

post to the address to which he changed his residence or

place of work. If really he changed his address, he could

have intimated the postal department his onwards 12 CRL. A NO.71 OF 2012

address and the post office would have redirected the

correspondence came to his previous address.

20. Thus from the above discussion, this Court is

of the considered opinion that accused has failed to prove

that he had shifted his residence and therefore, there is

no due service of statutory notice. On the other hand,

through the oral and documentary evidence placed on

record, the complainant has proved that though the

statutory notice was sent to the address of the accused,

intentionally he has failed to receive the same and either

comply with it or send reply putting forth reasons for not

complying it. This aspect is not appreciated by the trial

Court.

21. By not receiving the notice and thereby failing

to send reply, the accused has lost an opportunity to

spell out his defence at the earliest available opportunity.

Thereby it could be conveniently held that the defence

set up by the accused at trial is an afterthought. Anyhow,

it is necessary to examine whether the defence set up by

the accused is plausible and acceptable.

13 CRL. A NO.71 OF 2012

22. As already discussed, the accused has taken

up a specific defence that the cheques for Rs.2,00,000/-

and Rs.7,00,000/- were issued towards advancing of loan

of Rs.9,00,000/- and though the complainant was able to

encash cheque for Rs.2,00,000/-, accused intentionally

did not arrange for payment of Rs.7,00,000/- as

complainant failed to execute necessary documents. It is

pertinent to note that as deposed by him, the accused

was earlier doing money lending business. He was a land

developer and financially sound to purchase the property

as per Ex.P3 for Rs.1,11,25,000/- and which the

complainant was supposed to purchase for

Rs.30,00,000/-. Certainly he was in a dominant position.

At any stretch of imagination, it cannot be accepted that

he would advance loan of Rs.9,00,000/- to the

complainant without taking any documents. If the

defence taken by accused, is correct, after realizing that

the complainant has already encashed the cheque for

Rs.2,00,000/- before executing necessary documents,

the proper course available to the accused was to

demand the complainant to return the other cheque and 14 CRL. A NO.71 OF 2012

on his failure to do so to instruct his banker to stop

payment. The accused has very conveniently not chosen

to opt either of these options. He has also not taken any

steps to recover back Rs.2,00,000/- from the

complainant, which was the natural course available to

him.

23. According to the accused after he purchased a

property from K.K. Thimmarayappa, he compromised

with his son that is PW2 K.T. Umesh by paying him

Rs.7,00,000/- by way of two cheques for Rs.3,50,000/-

each. During his cross-examination, the accused has

admitted that both of these cheques are dishonoured and

complaint filed by him for the offence punishable under

section 138 of N.I. Act against the accused are pending.

This creates doubt as to the bonafides of accused in

honoring the commitments made by him. Consequently,

the Court is left with no other alternative but to hold that

it is a false defence taken by the accused to escape from

the liability of this case. In other words, the accused has

failed to prove his defence and rebut the presumption 15 CRL. A NO.71 OF 2012

which is operating in favour of the complainant and

against the accused.

24. PW2-K.T.Umesh is the son of

K.K.Thimmarayappa, the vendor of accused and who

executed the sale agreement at Ex.P2 and entered into

joint development agreement at Ex.P1 with the

complainant and PW3 Chandrashekar, which was

subsequently purchased by the accused. Through his

evidence and with the support of evidence of PW2 and 3,

the complainant has proved that before selling the

property to accused, K.K.Thimmarayyappa had executed

Ex.P1 and 2 as a result of which complainant started the

development work and it probablises the contention of

complainant that at the time of purchasing the said

property accused agreed to pay Rs.9,00,000/- to

compensate the complainant for the work carried out by

him and issued two cheques out of which the subject

cheque was dishonoured for want of funds. The evidence

of PW2 and 3 prove the fact that K.K.Timmarayappa was

not keeping well and therefore he could not be

summoned. Though the accused has disputed the said 16 CRL. A NO.71 OF 2012

fact he has not summoned K.K.Timmarayappa to

disprove that he has not executed any sale agreement at

Ex.P2 or joint development agreement at Ex.P1.

25. Thus, despite leading elaborate evidence, the

accused has failed to prove his defence and thereby

rebut the resumption under section 118 and 139 of the

N.I. Act. On the other hand, with the aid of the

presumption operating in his favour and also through the

oral and documentary evidence placed on record, the

complainant has proved the allegations against accused

beyond reasonable doubt. The trial court has failed to

appreciate these aspects and thereby come to a wrong

conclusion that the charge leveled against accused is not

proved. The findings of the trial court are contrary to the

oral and documentary evidence placed on record and as

such perverse, calling for interference by this court.

26. When once the Court comes to the conclusion

that the allegations against the accused are proved

beyond reasonable doubt, the next question would be to

what punishment the accused is liable.

17 CRL. A NO.71 OF 2012

27. The punishment prescribed for the offence

under Section 138 of the N.I.Act is imprisonment for a

term which may extend to two years or with fine which

may extend to twice the amount of cheque or with both.

The liability of the accused vide Ex.P4 cheque is

Rs.7,00,000/-. The transaction between the complainant

and accused is of the year 2006. Inspite of incurring such

liability towards the complainant, accused has taken up a

false defence and driven the complainant to indulge in

litigation in all these 16-17 years. Taking into

consideration these aspects, I am of the considered

opinion that sentencing accused to pay a fine in a sum of

Rs.14,00,000/-, which is double the amount of cheque, in

default of paying the fine sentencing him to undergo

imprisonment for a period of six months would meet the

ends of justice and accordingly, I proceed to pass the

following:

ORDER

i. Appeal filed by the complainant under Section 378(4) of Cr.P.C is allowed. The impugned judgment and order dated 18 CRL. A NO.71 OF 2012

16.11.2011 in C.C.No.19661/2007 on the file of XXII ACMM AND XXIV Addl.Small Causes Judge, Bengaluru City is set aside.

ii. Accused is convicted for the offence punishable under Section 138 of the N.I. Act and sentenced to pay fine in a sum of Rs.14,00,000/- in default of payment of fine, to undergo imprisonment for a period of six months.