Smt. Rajeshri M G vs Mr. Gayasuddin J
2023 Latest Caselaw 10747 Kant

Karnataka High Court

Smt. Rajeshri M G vs Mr. Gayasuddin J on 18 December, 2023

Author: Rajendra Badamikar

Bench: Rajendra Badamikar

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   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 18TH DAY OF DECEMBER, 2023

                        BEFORE

    THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR

           CRIMINAL APPEAL No.1756/2021
BETWEEN:

SMT. RAJESHRI .M.G,
W/O ANIL KUMAR,
AGED ABOUT 32 YEARS,
RESIDING AT FLAT NO.409,
4TH FLOOR, DS MAX SANVILL
APARTMENT, BALAJI LAYOUT,
MALLATHAHALLI,
BENGALURU-560 056.
                                             ....APPELLANT
(BY SMT. TAMILARASI .K, ADVOCATE FOR
    SRI. VIJAYA KUMAR .K, ADVOCATE)

AND:

MR. GAYASUDDIN .J,
PROPRIETOR,
M/S. G.J. PROJECTS,
HAVING OFFICE AT NO.81/A,
2ND FLOOR, 32ND CROSS,
2ND BLOCK, RAJAJINAGAR,
BENGALURU-560 052
                                          .... RESPONDENT

(BY SRI. V.S. RAVINDRA HOLLA, ADVOCATE)

     THIS APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C.
PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT AND
ORDEROF ACQUITTAL IN C.C.NO.5795/2018 DATED 17.09.2021
PASSED BY THE IV ADDITIONAL SMALL CAUSES JUDGE AND
A.C.M.M., COURT OF SMALL CAUSES(SCCH-6), BENGALURU AND
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ALLOW     THE  ABOVE    APPEAL    AND   CONVICT   THE
RESPONDENT/ACCUSED FOR THE OFFENCE P/UNDER SECTION
N.I.ACT AND COMPENSATE THE APPELLANT/COMPLAINANT.

     THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 06.12.2023, COMING ON FOR 'PRONOUNCEMENT
OF JUDGMENT' THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
                      JUDGMENT

This appeal is filed by the complainant/appellant

under Section 378(4) of Cr.P.C. challenging the

judgment of acquittal in C.C.No.5795/2018, dated

17.09.2021 passed by IV Additional Small Causes Judge

and A.C.M.M., Court of Small Causes (SCCH-6),

Bengaluru.

2. For the sake of convenience, the parties

herein are referred with the original ranks occupied by

them before the trial Court.

3. The brief factual matrix leading to the case

are as under:

The accused is the proprietor of M/s. G.J. Projects

and was carrying business of formation of layouts and

selling sites. He had appointed the complainant as a

commission agent to promote his business in the year

2014-2015 and later on appointed the complainant as a

marketing manager on 28.08.2015. The accused

agreed to pay the commission to the complainant to

promote his business. The accused failed to pay the

commission amount as agreed by him and

subsequently, towards repayment of the said amount,

he has issued cheques dated 28.08.2018 bearing

No.079681 for Rs.5,00,000/-, cheque bearing

No.079682 for Rs.5,00,000/-, cheque bearing

No.076983 for Rs.5,00,000/-, cheque bearing

No.320734 for Rs.5,00,000/- as well as cheque bearing

No.320374 for Rs.5,00,000/-, dated 29.08.2018 drawn

on Union Bank of India, Gandinagar Branch, Bengaluru.

When the said cheques were presented by the

complainant for encashment, the cheques were

dishonoured for "insufficient of funds". The complainant

has issued a statutory notice to the accused. The said

notice was duly served on the accused and he gave a

vague reply. Hence, the complainant claims to have

filed a complaint under Section 200 of Cr.P.C. against

the accused, alleging that he has committed an offence

punishable under Section 138 of the Negotiable

Instruments Act, 1881 (for short 'N.I. Act').

4. The learned Magistrate after recording the

sworn statement and after appreciating the documents

has taken cognizance for the offence punishable under

Section 138 of the N.I. Act and issued a process against

the accused. The accused appeared through his counsel

and he was enlarged on bail. The plea under Section

138 of the N.I. Act is framed against the accused and

he denied the same.

5. The complainant was got examined herself as

PW1 and placed reliance on twenty one documents

marked at Ex.P1 to Ex.P21. After the conclusion of the

evidence of the complainant, the statement of accused

under Section 313 Cr.P.C. is recorded to enable the

accused to explain the incriminating evidence appearing

against him in the case of the complainant. The case of

accused is of total denial. He got examined himself as

DW1 and placed reliance on ten documents marked at

Ex.D1 to Ex.D10.

6. After hearing the arguments and after

appreciating the oral and documentary evidence, the

learned Magistrate has acquitted the accused only on

the ground that the complainant is not registered as

real estate agent under Section 9 of the Real Estate

(Regulation and Development) Act, 2016 (for short

'RERA Act') in view of the definition under Section 2(m)

of the said Act. Though it is held that there is a legally

enforceable debt, but since the transaction is hit by the

provisions of RERA Act acquitted the accused. Being

aggrieved by this judgment of acquittal, the

complainant is before this Court by way of this appeal.

7. Heard the arguments advanced by the

learned counsel for the appellant and learned counsel

for the respondent. Perused the records.

8. The learned counsel for the appellant would

contend that there is no serious dispute of the fact that

the complainant can be treated as real estate agent and

acquittal is only on the ground of she is not registered

under Section 9 of the RERA Act. It is submitted that

the cheque belongs to the accused and the signature

has been admitted. Further, it is admitted that accused

has also worked as a commission agent and later on,

marketing manager. He would contend that admittedly,

the RERA Act came into effect in 2016 and the

transaction has taken place prior to the same. Hence,

he would contend that provisions of RERA Act are not

applicable. It is also asserted that Ex.P13 and Ex.P14

are documents executed by accused and they are in the

form of acknowledgement admitting the debt and as

such, the issue of limitation also does not come in the

way. Hence, he would contend that when the cheques

were issued towards repayment of commission, the

accused is liable to pay the same and it amounts to

legally enforceable liability. He would also contend that

accused has taken inconsistent defences and Ex.P13 &

Ex.P14 were not disputed and it amounts to continuous

liability and hence, the provisions of RERA Act cannot

be made applicable to the case in hand. Hence, he

would seek for allowing the appeal and convicting the

accused/respondent herein.

9. Per contra, the learned counsel for

respondent would contend that there are five cheques

each of Rs.5,00,000/- and complainant nowhere

pleaded the nature of the transaction. He would also

contend that transaction is of 2014 & 2015 and cheque

was issued in 2018 and debt is time barred as Ex.P13

and Ex.P14 are disputed documents. It is also asserted

that in Ex.P14 two cheques referred with Sl.No.733 &

734 are not referred and the defence of accused is that

while complainant was working, blank cheques were

issued towards payment of bonus to staff and look after

administration and they have been misused. Hence, he

would contend that the legally enforceable debt is not

established and as such, it is sought for dismissal of the

appeal.

10. Having heard the arguments and after

appreciating the oral and documentary evidence, now

the following point would arise for my consideration:

"Whether the judgment of acquittal passed by the trial Court is perverse and arbitrary so as to call for any interference by this Court."

11. At the outset, the disputed cheques are

marked at Ex.P1 to Ex.P5. It is undisputed fact that the

said cheques belong to accused and they bear the

signatures of the accused. Ex.P11 is the legal notice

issued to the accused and service of legal notice is also

undisputed. Ex.P12 is the reply notice and in the reply

notice, accused has nowhere disputed the status of the

complainant. But it is asserted that the cheques were

taken by the complainant while working with the

accused as marketing manager and for showing the

said cheques to her advertisers by way of guarantee

and there is no legally enforceable debt. The defence

taken by the accused in Ex.P12 is very specific that the

cheques were given to show the advertisers by way of

guarantee.

12. However, Ex.P13 and Ex.P14 are material

documents and signatures on these documents are not

disputed by the accused. Even on comparison of

signature on vakalath it is evident that they are one

and the same. On perusal of Ex.P13 & Ex.P14, it is

evident that the cheque numbers referred at Ex.P1 to

Ex.P3 are specifically referred there. Further, there the

commission, incentive etc., is specifically mentioned.

Hence, prima facie there is no dispute of the fact that,

the complainant was working under the accused as an

agent and later on marketing manager.

13. Accused was examined himself as DW1 and

in his examination-in-chief itself, he has admitted that

the accused was working as commission agent in 2014

to June 2015 and she worked on commission. He has

also admitted that the complainant used to receive

Rs.60,000/- monthly salary along with Rs.12,000/-

commission for each site registration and she was given

a target of registration of 25 to 30 sites per month.

However, in the further cross-examination, the accused

asserts that from April-2016 last week to May first

week he had been to Mecca for pilgrimage. He asserts

that in this period he has given complete authority to

the complainant to look after the business and towards

business promotion and advertisement, he has issued

blank cheques to the accused.

14. Apart from that, he further admitted that

during October-2016 he has undertaken the work of Sai

Residency and provided the blank cheques in Deepavali

2016 towards bonus for executors. These stands are

completely inconsistent and contrary. The accused

asserts that the cheques were issued while he had been

to Mecca in April 2016 and then in Deepavali 2016

towards payment of bonus, but why he has issued

blank cheques is not at all explained. The burden is on

the accused to rebut the presumption, as the cheques

belongs to the accused and that they bear his

signature, are admitted. Hence, the presumption under

Section 139 of the N.I. Act is in favour of complainant.

15. Much cross-examination was made regarding

complainant working different projects and details were

sought. But accused himself in his examination-in-chief

admitted the status of complainant as marketing

manager and a commission agent. Hence, cross-

examination of PW1 in this regard does not have much

relevance in this regard.

16. The accused further admitted that in January-

2018 he has transferred Rs.1,00,000/- by way of

account transfer to the complainant and he paid

Rs.4,00,000/- by cash. But no such evidence is

forthcoming. He has also admitted that the complainant

has approached Rajajinagar Police Station, wherein the

complainant has demanded Rs.50,00,000/- and it was

settled for Rs.25,00,000/-. But he asserts that the

settlement was not for Rs.25,00,000/- but for

Rs.20,00,000/-. If this version is taken note, then it is

evident that the matter was settled for Rs.20,00,000/-

and as per his own contention he paid Rs.5,00,000/-.

But to substantiate the said contention he has not

produced any records.

17. The documents produced by the accused are

regarding transaction taken place before the Police and

he has not disputed them. On the contrary, he admits

that he himself voluntary states that he got it settled

for Rs.20,00,000/-. But as per the case of the

complainant, it was settled for Rs.25,00,000/-. Further,

Ex.P13 and Ex.P14 completely demolish the defence of

the accused and accused has not lead any piece of

evidence to show that he issued the cheque either to

promote his business to show the guarantee to the

advertisers or by way of bonus to the other employees.

As such, the contention of the accused in this regard

cannot be accepted and presumption available in favour

of complainant is not rebutted by the accused.

18. On perusal of Ex.P13 and Ex.P14, it is evident

that they are dated 25.10.2017 and 14.05.2018.

Though it is alleged that transaction is of 2014 and

2015, when exactly transactions or commission was

due is not explained by the accused, as he is now

taking up a new defence on limitation. This defence was

not raised before the learned Magistrate and now it is

asserted that the transaction is hit by the law of

limitation. In that event, the accused is required to

prove as to when he was exactly due to pay the amount

to complainant. It is a continuing transaction and

further, accused being the custodian of all the material

records, has not produced any documents to

substantiate his contention. Further, Ex.P13 and Ex.P14

clearly establish that it amounts to acknowledgement

and hence, the arguments advanced that the claim is

barred by law of limitation holds no water at all. Since

the accused has raised this issue, it is for him to specify

when the amount was specifically due and from that

day the limitation begins, but no such evidence is

forthcoming. The learned counsel for respondent in this

context has placed reliance on a decision of this Court

in Crl.RP.287/2015 (S.S. Ramesh VS. K. Lokesh)

dated 16.08.2023, but the facts and circumstances of

the said case are entirely different and in the said case

there was clear evidence that the loan was advanced in

2002 and the cheque was issued in 2007 and hence,

the limitation was considered. But no such evidence is

forthcoming in the instant case. Hence, the said

principles cannot be made applicable to the facts and

circumstances of the case in hand.

19. The learned counsel for respondent has

further placed reliance on a decision reported in 2023

LiveLaw (SC) 752 (K.Hymavathi Vs. The State of

Andhra Pradesh & Anr.). But the facts and

circumstances are entirely different and in the instant

case, during the trial, the accused has nowhere raised

an issue of limitation that the debt is barred by law of

limitation and he has not even produced any documents

to show that on which particular date the liability has

arisen and the claim being barred by law of limitation.

Under such circumstances, the principles enunciated in

the above cited decision will not come to the aid of the

appellant in anyway.

20. The learned counsel for respondent has

further placed reliance on decision of Apex Court in

2021 SCC OnLine SC 1044 (Newtech promoters

and developers Pvt. Ltd. Vs. State of UP & Ors.

Etc.). He invited the attention of the Court to para 31,

32 and 54 and on the basis of this, he would contend

that the RERA Act of 2016 is applicable and since

complainant is not registered as an agent, question of

she enforcing any liability against the accused does not

arise at all. But in the said judgment itself in para

No.33 it is clearly held that registration of real estate

projects become mandatory and without registering the

real estate projects with the RERA Authority established

under the act, no promoter is required to advertise

marketing any plot or apartment or building etc.

Admittedly, it is not the complainant who is a real

estate agent, but complainant is working under accused

as a marketing manager from 2015 as admitted. Unless

the accused registers his project, he cannot take

advantage of the said Act. Further, the transactions in

this case were prior to 2015 and question of applying

the provisions of RERA Act does not arise at all. Apart

from that, in the said decision, it is mandated that

under the said act, the on going project are required to

be registered. Further in para No.54, the Apex Court

has analyzed and held that the applicability of the Act

of 2016 is retroactive in character and it is further

observed that the projects already completed or to

which the completion certificate has been granted are

not under its fold and therefore, the vested or accrued

rights if any, in no manner are affected. Admittedly, the

accused has taken the projects and it is for him to

explain which projects are incomplete and which

projects are completed so as to attract the provisions of

RERA Act. The accused cannot put a negative onus on

the complainant who is working under accused and

under such circumstances, the bar under RERA Act will

not come to the aid of the accused/respondent herein in

any way. As observed above, Ex.P13 and Ex.P14 being

undisputed documents, they revive the claim and it is in

the form of acknowledgments.

21. In view of these facts and circumstances, the

accused cannot escape his liability under the guise of

non-registration under the RERA Act and infact when he

employed the complainant as marketing manager, he is

required to register the project and then he should

have asked the complainant to get registered. But

instead of doing so he is attempting to take the benefit

of RERA Act, which was given effect in 2016. But the

complainant's right was accrued prior to 2016. Hence,

the provisions under Section 9 of the RERA Act cannot

be made applicable to the facts and circumstances of

the case in hand.

22. The learned Magistrate has considered all

these aspects and has rightly come to a conclusion that

the accused is liable to pay a cheque amount to the

complainant. But only on the ground of non-registration

and in view of the bar under Section 9 of the RERA Act,

he acquitted the accused. But however, as observed

above, the learned Magistrate has erred in appreciating

the provisions of RERA Act and applicability of the RERA

Act, in view of the fact that the transactions were of

2014 & 2015, prior to implementation of RERA Act and

accused has not disclosed whether the project is

completed or not and he would have been the best

witness in the given circumstances. He has withheld

material evidence in this regard and adverse inference

is required to be drawn as against him and he cannot

take advantage of his own wrong. As such, the said

observation of the learned Magistrate in this regard is

erroneous and calls for interference.

23. The cheque amount is for Rs.25,00,000/- and

the complainant is fighting the litigation since 2018.

The accused having availed the services of the

complainant, now instead on paying the due to the

complainant, he is taking untenable defence. The

cheque was issued towards legally enforceable debt and

hence, it is evident that the accused has committed the

offence under Section 138 of the N.I. Act.

24. The offence under Section138 of the N.I. Act

is punishable with imprisonment, which may extend to

two years or with the fine which may extend to double

the cheque amount or both. In the instant case, it is

exclusively commercial transaction between the parties

and hence, imposition of sentence of imprisonment is

not warranted. However, the complainant is fighting the

litigation since 2018 and she was deprived for benefit

pertaining to services rendered by her, though accused

utilized her services in order to expand his business.

Under such circumstances, looking to the facts and

circumstances, in my considered opinion, the accused is

required to be imposed with a fine of Rs.40,00,000/-

which would serve the purpose and accordingly, the

point under consideration is answered in the

affirmative. As such, appeal needs to be allowed.

Accordingly, I proceed to pass the following:

ORDER

(i) The appeal is allowed.

(ii) The impugned judgment of acquittal passed by IV Additional Small Causes Court and ACMM, Bengaluru, in C.C.No.5795/2018, dated 17.09.2021, is set aside.

(iii) The accused is held guilty of the offence punishable under Section 138 of the N.I. Act.

(iv) The accused is sentenced to pay a fine of Rs.40,00,000/- (Rupees Forty Lakhs only) for the offence punishable under Section 138 of the N.I. Act and in default of payment of fine, he shall undergo imprisonment for a period of one year.

(v) Out of the fine amount, Rs.39,75,000/-

(Rupees Thirty Nine Lakhs Seventy Five Thousand only) shall be paid to the complainant by way of compensation and Rs.25,000/- (Rupees Twenty Five thousand only) shall be credited to the State.

(vi) Send back the TCRs to the trial Court with a direction to the learned Magistrate to secure the presence of the accused and collect fine amount or execute default sentence.

Sd/-

JUDGE

DS