Karnataka High Court

Sri Omkarmurthy vs T H Manjunatha on 7 December, 2023

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                                                              NC: 2023:KHC:44307
                                                         CRL.A No. 325 of 2014




                   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                        DATED THIS THE 7TH DAY OF DECEMBER, 2023

                                             BEFORE
                          THE HON'BLE MR JUSTICE G BASAVARAJA
                               CRIMINAL APPEAL NO. 325 OF 2014
                 BETWEEN:

                 SRI. OMKARMURTHY,
                 S/O LATE GANGANNA,
                 AGED ABOUT 50 YEARS,
                 R/A M.M.A. KAVAL,
                 SOMALAPURA VILLAGE,
                 NITTUR HOBLI, GUBBI TALUK,
                 TUMKUR DISTRICT - 572 216.
                                                                    ...APPELLANT
                 (BY SRI. P.H. VIRUPAKSHAIAH, ADVOCATE)

                 AND:

                 T.H. MANJUNATHA,
                 S/O T.D. HULURAIAH
Digitally        AGED ABOUT 37 YEARS,
signed by
SANDHYA S        R/A HURULITHOTA,
Location: High   NEAR OLD TILES FACTORY,
Court of
Karnataka        TUMKUR - 572 101.
                                                                  ...RESPONDENT
                 (BY SRI. R. PREMKUMAR, ADVOCATE)

                        THIS CRL.A IS FILED U/S.378(4) OF CR.P.C PRAYING TO
                 SET ASIDE THE JUDGMENT DATED 14.2.2014 PASSED BY THE
                 PRL.   C.J.   AND   J.M.F.C.,   GUBBI   IN   C.C.NO.35/2008   -
                 ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE
                 P/U/S 138 OF N.I.ACT.
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                                                 NC: 2023:KHC:44307
                                              CRL.A No. 325 of 2014




      THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS

DAY, THE COURT DELIVERED THE FOLLOWING:

                               JUDGMENT

The complainant/appellant has preferred this appeal

against the judgment of acquittal passed by the Judicial

Magistrate First Class, Gubbi in CC.No.35/2008 dated:

14.02.2014, (for short hereinafter referred to as 'trial Court').

2. The rank of the parties in this appeal are referred to

as per their status before the trial Court.

3. The brief facts of the complainant is that the

accused in running a Financial Institution by name Manjunatha

Finance and Investments (R) office at M.M.S Building, near

Kote Sri.Ananjenaya Temple, Chikkapet Main Road, Tumkur

and he is the Managing partner to that Finance. He has taken

deposit of Rs.2,65,000/- from the complainant with interest at

15% p.a. The said deposit was matured and when the

complainant has demanded the accused to return the said

deposit amount, he has issued a cheque bearing No.921635 for

a sum of Rs.2,65,000/- drawn on Indian Overseas Bank,

B.H.Road, Tumkur of his firm's current account No.100, dated

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05.09.2007. On presentation of the said cheque through

Canara Bank, Main Branch, Tumkur for encashment through his

account on 11.10.2007 was bounced as 'Insufficient Funds' and

issued an endorsement on 11.10.2007. The accused has issued

the above cheque even though he has no sufficient funds in his

account only to deceive the complainant, after the cheque was

dishonoured the complainant issued legal notice to the accused

on 09.11.2007, to comply with that notice by paying the above

said cheque amount within 15 days from the date of receipt of

notice, the wife of accused by name Sunitha A.S has signed on

the acknowledgement and received the postal cover, inspite of

service of notice, accused did not repay the amount within a

statutory period. Hence, the complainant had lodged a

complaint under Section 138 of the Negotiable Instruments Act,

1881.

4. After taking cognizance the trial Court has

registered the case in CC.No.35/2008 and summons was issued

to the accused. In response to summons accused appeared

before the Court and enlarged on bail. The plea was recorded

and the accused pleaded not guilty and claimed to be tried.

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5. To prove the case of the complainant, complainant

himself examined as PW1, 08 documents were marked as Ex.P1

to Ex.P8 and another witness was examined by name K.Gururaj

examined as PW2. On closure of complainant side evidence

statement under Section 313 of Cr.P.C was recorded. Accused

has totally denied the evidence of PW1 and also adduced his

evidence as DW1.

6. On hearing the arguments on both sides, the trial

Court has acquitted the accused. Being aggrieved by the

judgment of acquittal the appellant has preferred this appeal.

7. Learned counsel for the appellant has submitted his

arguments that the order of acquittal passed by the learned

Magistrate is contrary to law, facts of the case and evidence on

record, as such is liable to be set-aside. The learned Magistrate

has failed to understand that whenever a cheque is issued the

presumption is that the same is issued for discharge of lawfully

enforceable debt, as such passing the impugned order dated

14.02.2014 is untenable and erroneous. The learned Magistrate

has failed to understand that signature and other facts of such

as issuance of cheque etc., has not disputed by the respondent.

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The remaining aspects such as the contents of the documents

are presumed to be true. As such disbelieving the version of

appellant/complainant and ultimately acquitting the respondent

is against to law. The trial Court has not properly appreciated

the evidence on record in accordance with law and facts. The

trial Court has acquitted the accused on two grounds; (1) The

notice issued by the complainant was not served, though it was

served to the wife of the accused, DW1 has clearly admitted in

his cross examination that Sunitha A.S, is his wife. (2) The

Company has not arrayed as accused in this case. But in the

complaint the complainant has clearly stated that accused is

running a Financial Institution by name Manjunatha Finance

and Investments Registered office at M.M.S Building, near Kote

Sri. Anjaneya Temple, Chikkapet Main Road, Tumkur and he is

the Managing partner of that Finance. Hence, that there is no

need to implead the said Finance Company and on all these

grounds sought for allow this appeal. To substantiate his

arguments he relied on the decisions of M/S. BILAKCHAND

GYANCHAND CO. VS A. CHINNASWAMI reported in 1999

(5) SCC 693; V. N. SAMANT VS K.G.N. TRADERS AND

ANOTHER reported in ILR 1994 KAR 2991.

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8. As against this, learned counsel for the respondent

has submitted his arguments that the trial Court has properly

appreciated the evidence on record in accordance with law and

facts and also the decision of Hon'ble Apex Court, that there

are no grounds to interfere with the impugned judgment of

acquittal. On all these grounds sought for dismissal of this

appeal.

9. I have examined the materials placed before this

Court. The complainant has filed this complaint under Section

138 of the Negotiable Instruments Act, 1881 for dishonour of

cheque of Rs.2,65,000/- dated 05.09.2007. The accused has

issued this cheque for Manjunatha Finance and Investments.

The accused has put his signature as Managing partner, this

cheque was presented for encashment on 11.10.2007. The

same was dishonoured with endorsement as Ex.P3 'insufficient

funds', that on 09.11.2007 a legal notice was issued to the

accused to pay the cheque amount of Rs.2,65,000/-, the same

was served on the wife of the accused as per Ex.P5, Ex.P6 is

the account opening form of Manjunatha Finance and

Investments, Ex.P7 is the specimen signature of the accused-

firm.

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10. The trial Court has observed in para No.16 of the

judgment that the notice issued by the complainant is not

served to the accused. In this regard the trial Court has relied

on the decision of M.B.THOMAS Vs. T.S.JALEEL AND

ANOTHER reported in 2009 (2) DCR 519. But in the case on

hand, the DW1-Manjunatha has stated in his evidence that

complainant has not issued the notice to him and also to his

firm. But he has not disputed the signature of his wife on

Ex.P5. The address shown in Ex.P4-notice also not denied by

the accused and during the course of cross-examination the

accused he has clearly admitted that his wife Sunitha A.S, is

residing with him. The admission made by DW1 is sufficient to

come to the conclusion that the notice is duly served to the

wife of the accused. Accordingly, the complainant has complied

the provisions of Section 138(b) of the Negotiable Instruments

Act, 1881.

11. With regard to the maintainability of the complaint

is concerned in para Nos.17 to 22, the trial Court has observed

as hereunder:

"17. The another point canvassed by the learned counsel for the accused is that, the

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complainant has deposited amount in the Manjunatha Finance Investment Company and the complainant has not made the company as party in the present complaint and the cheque in dispute shows it was issued on behalf of company and the evidence of p.w.2 clearly discloses the Ex.P-1 is pertaining to the account of Manjunatha Finance and Investment company and it is not issued by accused on his personal account. Therefore, the complaint is not maintainable. In support of his arguments, he relied upon a decision reported in 2013(2) DCR construction 705 AP US Nirmalakumari and another decision reported in 2008(1) DCR 38 Snehalatha vs M/s Victory leathers, another decision 2012(1) DCR 746 Anitha Hada VS M/s God fathers Travels Tours and Put. Limited. 2013(1) KCCR 191 B.L. Boolani VS Vasanthakumar Bangera, 2009 (2) DCR 296 Jugesh Sehgal VS Samsheer Singh Gogi.

18. On the other hand learned counsel for the complainant has argued that, the accused has issued the cheque in dispute for due return of deposit amount which was deposited in the company of Manjunatha Finance and Investment company, in which the present accused is also one of the partner and he issued the cheque and he has not disputed the signature found in the cheque therefore the burden is on the accused to rebut the same and the evidence adduced by the complainant clearly establishes the accused has committed offence punishable under sec. 138 of NI Act and he prays to convict the accused.

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19. I have scrutinized the evidence adduced by the complainant and the averments of complaint. Admittedly, the complainant in his examination in chief has admitted that he has invested the amount in the Manjunatha Finance and Investment company and he has not issued any notice to the said company and he has not made the said company as party in the complaint and Ex. P-1 discloses that it was issued by Manjunatha Finance Investment Company and it was not issued on the personal account of accused. P.w.2 who is the bank manager has also deposed that, the cheque in dispute is pertaining to the account of Manjunatha Finance and Investment company, therefore it is crystal clear the cheque is not pertaining to the personal account of the accused and it belongs to Manjunatha Finance and Investment company. Admittedly, the complainant has not made the said company as party to this complaint.

20. The decision of the Hon'ble Supreme court reported in 2012(1) DCR 746 Aneetha Hada versus M/s God father Travels has held that complaint filed without impleading company - maintainability- held section 141 of NI Act clearly stipulates that when a person which is a company commits an offence then certain categories of persons in charge as well as the company would be deemed to be liable for section 138. it bounded duty of court to ascertain for what purpose the legal fiction has been created criminal liability on account of dishonor of cheque primarily falls on the drawer of company and he is extended to the

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offers of company- for maintaining the persecution under sec. 141 of NI Act arraying of a company as an accused is imperative.

21. In the present case also the complainant has not made the company as one of the accused. Therefore, the complaint is not maintainable without impleading the company as accused. Even the complainant in the cause title has not mentioned the designation of accused in the said company. To constitute an offence under sec. 138 of NI Act it is necessary that a person must have drawn cheque on account maintain by him in the bank. Admittedly, the evidence adduced by the complainant clearly establishes the cheque is not pertaining to the accused and he has not issued the cheque from the account maintained by him.

22. The cheque in dispute has not drawn by the accused on his personal account maintained by him. Therefore, the complaint fails. Since the complainant has failed to prove the ingredients of 138 of NI Act, the complaint is liable to be dismissed. Hence, I answer point No.1 in the negative."

12. On re-appreciation/re-examination and

reconsideration of the evidence on record and also keeping in

mind the aforesaid decisions, I do not find any illegality/legal

infirmity in the impugned judgment of acquittal as to the

maintainability of his complaint. Hence, I answer point No.1 in

negative.

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Regarding Point No.2:

13. The trial Court has acquitted the accused on

technical ground considering the facts and circumstances of this

case. It is just and proper to give liberty to the complainant to