Karnataka High Court
Sri Sharad M Umarji vs Sri Sharavanan on 12 July, 2023
Bench: J.M.Khazi
1 Crl.A.No.602/2012 c/w
Crl.A.No.603/2012
Crl.A.No.604/2012
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF JULY, 2023
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.602 OF 2012
C/W
CRIMINAL APPEAL NO.603 OF 2012
CRIMINAL APPEAL NO.604 OF 2012
IN CRIMINAL APPEAL NO.602 OF 2012
BETWEEN:
SRI. SHARAD M UMARJI
S/O LATE MADHAVA RAO
AGED ABOUT 55 YEARS
NO.21, 7TH A MAIN ROAD
MUTHYALANAGAR
BENGALURU - 560 054
...APPELLANT
(BY SRI. T.S.MAHABALESWARA, ADVOCATE)
AND:
SRI SHARAVANAN
AGED ABOUT 41 YEARS
NO.6, I CROSS STREET
DR R K NAGAR
THIRUVANMIYUR
CHENNAI - 600 041
.....RESPONDENT
(BY SRI. GURURAJ KULKARNI, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CODE OF CRIMINAL PROCEDURE PRAYING TO ALLOW THE
APPEAL SET ASIDE THE JUDGMENT AND ORDER PASSED BY
THE XV ACMM, BENGALURU CITY MADE IN C.C.NO.6955/2009
DATED 21/04/2012 AND KINDLY CONVICT THE RESPONDENT/
ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION
138 OF N.I.ACT AND FURTHER DIRECT TO PAY DOUBLE THE
2 Crl.A.No.602/2012 c/w
Crl.A.No.603/2012
Crl.A.No.604/2012
AMOUNT OF CHEQUE TO SECURE THE ENDS OF JUSTICE AND
EQUITY.
IN CRIMINAL APPEAL NO.603 OF 2012
BETWEEN:
SRI. SHARAD M UMARJI
S/O LATE MADHAVA RAO
AGED ABOUT 55 YEARS
NO.21, 7TH 'A' MAIN ROAD
MUTHYALANAGAR
BENGALURU - 560 054
...APPELLANT
(BY SRI. T S MAHABALESWARA, ADVOCATE)
AND:
SRI SHARAVANAN
AGED ABOUT 41 YEARS
NO.6, I CROSS STREET
DR R K NAGAR
THIRUVANMIYUR
CHENNAI - 600 041
.....RESPONDENT
(BY SRI. GURURAJ KULKARNI, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CODE OF CRIMINAL PROCEDURE PRAYING TO ALLOW THE
APPEAL SET ASIDE THE JUDGMENT AND ORDER PASSED BY
THE LEARNED XV ACMM AT BENGALURU CITY MADE IN
C.C.NO.12071/2009 DATED 21/04/2012 AND KINDLY
CONVICT THE RESPONDENT/ACCUSED FOR THE OFFENCE
PUNISHABLE UNDER SECTION 138 OF N.I.ACT AND FURTHER
DIRECT TO PAY DOUBLE THE AMOUNT OF CHEQUE TO
SECURE THE ENDS OF JUSTICE AND EQUITY.
IN CRIMINAL APPEAL NO.604 OF 2012
BETWEEN:
SRI. SHARAD M UMARJI
S/O LATE MADHAVA RAO
AGED ABOUT 55 YEARS
NO.21, 7TH A MAIN ROAD
3 Crl.A.No.602/2012 c/w
Crl.A.No.603/2012
Crl.A.No.604/2012
MUTHYALANAGAR
BENGALURU - 560 054
...APPELLANT
(BY SRI. T S MAHABALESWARA, ADVOCATE)
AND:
SRI SHARAVANAN
AGED ABOUT 41 YEARS
NO.6, I CROSS STREET
DR R K NAGAR
THIRUVANMIYUR
CHENNAI - 600 041
.....RESPONDENT
(BY SRI. GURURAJ KULKARNI, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CODE OF CRIMINAL PROCEDURE PRAYING TO ALLOW THE
APPEAL SET ASIDE THE JUDGMENT AND ORDER PASSED BY
THE LEARNED XV ACMM AT BENGALURU CITY MADE IN
C.C.NO.19120/2009 DATED 21/04/2012 AND KINDLY
CONVICT THE RESPONDENT/ACCUSED FOR THE OFFENCE
PUNISHABLE UNDER SECTION 138 OF N.I.ACT AND FURTHER
DIRECT TO PAY DOUBLE THE AMOUNT OF CHEQUE TO
SECURE THE ENDS OF JUSTICE AND EQUITY.
THESE CRIMINAL APPEALS HAVING BEEN HEARD AND
RESERVED ON 12.06.2023, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
JUDGMENT
Though, these three appeals are arising out of three
separate complaints, as the complainant and accused are
common the trial Court has passed a common judgment
and order. Consequently, these three appeals are heard
and disposed of by a common judgment and order.
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Crl.A.No.604/2012
2. These appeals are filed by the complainant
challenging the common judgment and order passed by the
trial Court, acquitting the accused for the offence
punishable under Section 138 of N.I Act.
3. For the sake of convenience the parties are
referred to by their rank before the trial Court.
4. It is the case of the complainant that he and
accused are friends. On 17.06.2008, accused borrowed
hand loan of Rs.8,00,000/- for his business purpose.
Towards repayment of the same, he executed three on
demand promissory notes and issued three cheques i.e.,
post dated 20.10.2008 for Rs.2,00,000/-, 20.02.2009 for
Rs.2,00,000/- and 20.06.2009 for Rs.4,00,000/- drawn on
State Bank of India, Kasturbanagar Branch, Chennai.
4.1 Accused assured that the cheques would be
honored. Accordingly, on 06.12.2008, 20.02.2009 and
20.06.2009 respectively, complainant presented the
cheques for realization. However, they were dishonored on
the ground of 'funds insufficient' as per Bank endorsement
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dated 18.12.2008, 24.02.2009 and 24.06.2009,
respectively.
4.2 Complainant got issued legal notice dated
02.01.2009, 18.03.2009 and 14.07.2009 respectively.
Though the postman has delivered intimation, accused has
not chosen to receive the notice sent through RPAD.
However, the notice sent under Certificate post is served.
But, accused has not sent any reply. He has also not
complied with the legal notice. Without any alternative
complainant has approached the trial Court with these
complaints.
5. Before the trial Court, accused has put in his
appearance through counsel and contested the matters. He
has pleaded not guilty and claimed trial.
6. In support of his case, in C.C.No.602/2012
complainant got himself examined as PW-1 and got marked
Ex.P1 to 8.
6.1 In C.C.No.603/2012, complainant is examined
as PW-1 and got marked Ex.P1 to 10.
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Crl.A.No.604/2012
6.2 In C.C.No.604/2012, complainant is examined
as PW-1 and got marked Ex.P1 to 8.
7. During his statement under Section 313 Cr.P.C,
accused has denied the incriminating evidence.
8. On the other hand in all the cases accused
examined himself as DW-1 and got marked Ex.D1 to 7
separately.
9. Vide the impugned common judgment and
order, the trial Court acquitted the accused in all three
cases.
10. Being aggrieved by the impugned judgment and
order the complainant is before this Court contending that
the impugned judgment and order is contrary to law, facts,
evidence placed on record and as such it is perverse.
Though the trial Court has rightly held that accused
borrowed money, issued cheques towards repayment of the
same and also that complainant has complied with all the
mandatory requirements of Section 138, it has erred in not
drawing the presumption under Sections 118 and 139 of
N.I.Act. The trial Court has also not appreciated the fact
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that accused has not sent any reply to the legal notice and
he has also not chosen to advice the Banker to stop
payment in the light of defence taken by him. The trial
Court has also not appreciated the fact that the accused
has not taken any legal action against Shaji Mathew for
misusing the cheques. The trial Court has also failed to
appreciate the fact that the accused has not rebutted the
presumption under Section 139 of N.I.Act, by examining his
wife.
10.1 Though the trial Court rejected application made
by the complainant for sending the cheques for opinion of
the hand writing expert, on the promise that since the
cheque is admitted, burden is on the accused to prove that
there was no passing of consideration, it has erred in
relying on Section 73 of the N.I.Act. The trial Court has also
erred in drawing adverse inference against the complainant
for not examining Shaji Mathew, whereas in fact it ought to
have drawn adverse inference against the accused for not
examining him as well as the wife of accused and also
documents to prove that loan was taken from Shaji Mathew
and it is discharged. The trial Court has failed to appreciate
the falsity of defence of the accused that the loan taken
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from Shaji Mathew was repaid and in order to take back the
cheques issued in his favour by his wife, accused issued
three blank cheques drawn on his account. Viewed from
any angle the impugned common judgment and order is
not sustainable and prays to allow the appeals, set aside
the same, convict and sentence the accused.
11. On the other hand, learned counsel for accused
supported the impugned common judgment and order and
prays to dismiss the appeals.
12. Heard elaborate arguments of both sides and
perused the record.
13. At the outset, it is relevant to note that accused
is not disputing the fact that the cheques in question
belongs to him, drawn on his account maintained with the
Bank and they bear his signatures. Consequently, as held
in Kalamani Tex and another Vs. P.Balasubramaian
(Kalamani Tex)1, Rohitbhai Jivanlal Patel Vs. State of
Gujarat and Anr. (Rohitbhai Jivanlal Patel)2, Rangappa
(2021) 5 SCC 283
AIR 2019 SC 1876
Crl.A.No.603/2012
Crl.A.No.604/2012
Vs. Sri Mohan (Rangappa)3 Kumar Exports Vs. Sharma
Carpets (Kumar Exports)4, Triyambhak S. Hegde Vs.
Sripad(Triyambhak)5 and APS Forex Services Pvt. Ltd., Vs.
Shakti International Fashion Linkers & Ors (APS Forex)6,
the presumption under Sections 118 and 139 of N.I.Act is
operating in favour of complainant that the cheques in
question were issued towards the payment of legally
recoverable debt or liability. Consequently, the burden is on
the accused to rebut the presumption and prove the
circumstances under which the cheques reached the hands
of complainant.
14. It is pertinent to note that accused has not sent
reply to the legal notice, spelling his out defence at the
earliest available opportunity. However, during the course
of his evidence, he has set up a defence that he is carrying
out garment business and one Shaji Mathew was also
carrying on export business in the name and style M/s
Esteem Exim. Accused requested Shaji Mathew to advance
loan of Rs.8,00,000/- by executing a pronote and issuing
(2010) 11 SCC 441
(2009) 2 SCC 513
Crl A. Nos.849-850/2011(SC)
AIR 2020 SC 945
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two cheques belonging to his wife Sreelekha Saravanan,
Proprietrix of EMYES Clothing Company. However, the said
Shaji Mathew paid only Rs.5,00,000/-. In connection with
their business accused took Shaji Mathew to various placed
such as Jalandhar, Ludiana, Coimbatore and Tirupur and
incurred expenses of Rs.2,50,000/- and in this connection
difference of opinion arose between accused and said Shaji
Mathew. Though accused and his wife repaid the said loan,
in order to return the cheques of wife of accused, Shaji
Mathew demanded three blank cheques from the accused
and misusing the said cheques, he has got filed false
complaints through the complainant.
15. In the light of the presumption under Sections
118 and 139 of N.I.Act, the burden is on the accused to
rebut the same and in the light of specific defence taken by
him, it is necessary to examine whether the presumption is
rebutted, so that the burden shifts on the complainant to
prove the specific case urged by him.
16. In this case the notice sent to accused is
returned with endorsement 'Information delivered, but not
claimed'. Accused has not seriously disputed the fact of
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issue of legal notice to him by the complainant, except
suggesting that in his address his father's name is not
mentioned. In fact complainant has admitted that in the
complaint also in the address of the accused, his father's
name is not forthcoming. Complainant has expressed
ignorance to the suggestion that father's name of accused
is Bhaskaran and stated that he did not ascertain his
father's name. However, not even a single suggestion is
made to the complainant that the legal notice is not served
on the accused, let alone for the reason that in the address
his father's name is not mentioned. However, during his
evidence accused has claimed that the legal notice is not
served on him and therefore he has not sent reply.
17. It is pertinent to note that the accused is served
on the same address both at the trial Court as well as in
this appeal. Section 27 of General Clauses Act, which deals
with 'Meaning of service by post' provides that - Where any
Central Act or Regulation made after the commencement of
this Act authorized or requires any documents to be served
by post, whether the expression "serve" or either of the
expressions "give" or "send" or any other expression is
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used, then, unless a different intention appears, the service
shall be deemed to be effected by properly addressing, pre-
paying and posting by registered post, a letter containing
the document, and, unless the contrary is proved, to have
been effected at the time at which the letter would be
delivered in the ordinary course of post.
18. The complainant has sent legal notice to the
accused through RPAD as well as under certificate of
posting. The one sent through RPAD is returned as not
claimed. However, the one sent under certificate of posting
is not returned and as such it is deemed to have been
served. From the conduct of the accused in not claiming the
legal notice sent through RPAD, this Court has not
hesitation to hold that accused has intentionally not chosen
to receive the same. By not receiving the legal notice, the
accused has lost an opportunity to come up with a
justification for not honouring the cheque. Anyhow fact
remains that the address to which legal notice was sent,
was the correct address of accused and even after
information being given about the registered post, accused
has not chosen to receive it. Hence, a presumption is
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required to be drawn that accused had knowledge of the
legal notice sent to him and intentionally he has failed to
receive it and send reply or comply with the said notice.
19. However, at the trial accused has taken up a
defence and deposed that he requested Shaji Mathew, a
common friend of himself and complainant for loan of
Rs.8,00,000/- and in fact his wife Sreelekha Saravanan,
Propreitrix of EMYES Clothing Company issued two cheques
dated 02.01.2005 for Rs.5,50,000/- and Rs.3,00,000/- and
also a demand promissory note by way of security.
However, Shaji Mathew advanced him only Rs.5,00,000/-.
Though he repaid the said amount, out of the sale proceeds
for the year 2005-06, Shaji Mathew refused to return the
two cheques and promissory note unless and until he i.e.,
accused issue three cheques and promissory note. In order
to prevent action being taken against his wife, he issued
three blank cheques and a promissory note by receiving
back two cheques and promissory note executed by his
wife. The accused has also deposed that on the instructions
of Shaji Mathew, he addressed a letter dated 17.06.2008,
to the complainant stating that three signed blank cheques
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for Rs.8,00,000/- is issued in favour of Shaji Mathew by
way of security and Shaji Mathew is a witness to the said
letter. The accused has alleged that since he did not comply
with the request of Shaji Mathew for more money towards
interest, he got filed a false complaint.
20. Fact remains that the cheques in question
belongs to accused drawn on his account maintained with
the Banker and they bear his signature. Consequently, the
presumption under Sections 118 and 139 of N.I.Act is
operating in his favour. Therefore, the burden is on the
accused to rebut the said presumption. In the light of
defence taken by him at the trial, it is necessary to
examine whether the accused has proved his defence and
thereby rebutted the presumption, so that the onus shifts
on the complainant.
21. Accused has relied upon Ex.D1 said to be a
letter written by his wife Sreelekha Saravanan to Shaji
Mathew that she could not repay loan of Rs.8,50,000/-
taken from him and sought time till July 2005 and Ex.D2 a
demand promissory note dated 11.06.2005 excecuted in
favour of Shaji Mathew. Accused has marked Ex.D1(a) as
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the signature of Shaji Mathew as acknowledging receipt of
the said letter. However, the accused has not produced any
document to prove the signature of said Shaji Mathew. The
contents of this document also falsifies his case that though
he requested for loan of Rs.8,00,000/- and in fact issued
cheques for a total sum of Rs.8,50,000/- drawn by his wife,
Shaji Mathew advanced only Rs.5,00,000/-. This letter
refers to advancing loan of Rs.8,50,000/-. In the absence
of proof of signature of Shaji Mathew, no reliance could be
placed on Ex.D1 or Ex.D2, which is a self-serving document
not bearing the signature of Shaji Mathew.
22. Though the accused claim that the loan taken
from Shaji Mathew was repaid, admittedly, no documents
are produced to evidence the said fact. It is relevant to
note that according to the accused, his wife borrowed the
said sum in her capacity of Propreitrix of EMYES Clothing
Company. If that is the case, necessarily she would be
having documents to prove the repayment of the said sum.
In the absence of the same, the accused has failed to prove
the borrowing from and repayment to Shaji Mathew.
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23. Moreover the contention of the accused that
despite repayment of loan taken from him, Shaji Mathew
insisted upon accused issuing three blank cheques for
returning two cheques and on demand pronote taken from
his wife does not stand to reason. It cannot be believed
that despite repayment of loan, in order to take back
cheques and pronote issued by his wife, Shaji Mathew
demanded three blank cheques and accused heeded to it.
At the outset it is relevant to note, according to the
evidence of accused himself that the cheques which were
allegedly given by his wife were not blank, but were dated
02.01.2005 and he has claimed that accused and his wife
repaid the said loan out of sale proceeds of the year 2005-
06. In fact as per Ex.D1, the wife of accused has sought
time till July 2005, which means by that time the validity
period of said cheques was over and they have become
worthless. Therefore, necessity of taking back the said
cheques would not arise.
24. Consequently, the contention of the accused
that to take back the said cheques, he issued three blank
cheques, which are the subject matter of the present
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appeals is not worthy of evidence. Even where it is
accepted that due to the pressure tactics of Shaji Mathew,
accused had to part with three blank cheques, there was no
impediment for the accused to instruct his Banker to stop
payment on the ground that they were not issued towards
any legally recoverable debt or liability. There was no
necessity for him to wait till the said cheques were
presented for realization. He has also not issued any legal
notice to Shaji Mathew, alleging that forcibly blank cheques
have been taken from him and demanding to return him.
25. It is pertinent to note that accused is not an
illiterate. He is a Chartered Accountant, who is in the
knowledge of in and out of banking business, especially the
consequences of issue of cheques including blank cheques.
In the absence of taking these steps, the defence of the
accused cannot be accepted, especially when the earliest
available opportunity, he has not chosen to send reply to
the legal notice and spell out his defence. From the above
discussion, this Court has no hesitation to hold that
accused has taken a false defence and has failed to
establish the same.
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26. Complainant is cross-examined suggesting that
as per Section 269(ss) of Income Tax Act, payments of
more than Rs.2,000/- are to be effected through cheque
and not reflecting the loan transaction in his income tax
returns. Non-compliance of the same may attract penal
liability under the said Act. However, it would not affect the
credibility of complainant's case. Complainant is also cross-
examined as to his financial capacity to advance loan of
Rs.8,00,000/. Having regard to the presumption under
Sections 118 and 139 of N.I.Act and as the accused has
failed to rebut the same, burden does not shift on the
complainant to prove his financial capacity. The defence of
the accused that his wife requested Shaji Mathew loan of
Rs.8,00,000/- indicate that at the relevant point of time
accused and his wife was in need of financial assistance
and it corroborate with the case set up by the complainant
that he has advanced loan of Rs.8,00,000/- to the accused.
If at all, even after repaying the loan taken from Shaji
Mathew, he insisted upon issuing blank cheques for return
of cheques issued by wife of accused, the easiest way
available to the accused was to instruct Bank to stop
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payment instead of issuing three blank cheques to him. In
fact by that time the said cheques had become invalid.
Even after allegedly issuing three blank cheques, it was
open to the accused to instruct his Banker to stop payment
if they were not issued towards repayment of any legally
recoverable debt or liability.
27. The examination of the entire oral and
documentary evidence placed on record makes it evident
that to wriggle out of the situation, accused has taken a
false defence and failed to establish the same. On the other
hand through oral and documentary evidence placed on
record, the complainant has proved the allegations against
accused beyond reasonable doubt. Even on preponderance
of probabilities, accused has failed to prove his defence.
Without considering the oral and documentary evidence
placed on record in its right perspective, the trial Court has
erred in holding that the complainant has failed to prove
the allegations against accused and therefore, the findings
of the trial Court is perverse and calls for interference by
this Court.
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28. In the result, the appeals succeed and the
impugned common judgment and order of the trial Court
is liable to be set aside and accused is liable to be
convicted.
29. When the Court comes to the conclusion that
the charge leveled against the accused is proved beyond
reasonable doubt for the offence punishable under Section
138 of N.I.Act and the appeal is allowed by setting aside
the impugned common judgment and order of acquittal,
the next question would be to what punishment accused is
liable.
30. 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
loan advanced by the complainant to accused is
Rs.8,00,000/-. The transaction between the complainant
and accused is of the year 2005. Inspite of availing hand
loan from the complainant, accused has taken up a false
defence and driven the complainant to indulge in litigation
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in all these 18 years. Taking into consideration these
aspects, I am of the considered opinion that sentencing
accused to pay double the amount of cheque by way of
fine, 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:
COMMON ORDER
(i) Appeals filed by the complainant under
Section 378(4) of Cr.P.C are allowed. The
impugned common judgment and order
dated 21.04.2012 in C.C.No.6955/2009,
C.C.No.12071/2009 and C.C.No.19120/2009
on the file of XV Addl.CMM, Bengaluru City, is
set aside.
(ii) In C.C.No.6955/2009, C.C.No.12071/2009
and C.C.No.19120/2009, accused is
convicted for the offence punishable under
Section 138 of the N.I.Act.
(iii) In C.C.No.6955/2009, accused is sentenced
to pay fine in a sum of Rs.4,00,000/- in
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default of payment of fine, to undergo
imprisonment for a period of six months.
(iv) In C.C.No.12071/2009, accused is sentenced
to pay fine in a sum of Rs.4,00,000/- in
default of payment of fine, to undergo
imprisonment for a period of six months.
(v) In C.C.No.19120/2009, accused is sentenced
to pay fine in a sum of Rs.8,00,000/- in
default of payment of fine, to undergo
imprisonment for a period of six months.
(vi) Out of the total fine amount recovered a sum
of Rs.14,00,000/- is ordered to be paid to
the complainant by way of compensation.
(iv) The Registry is directed to return the trial
Court records along with copy of this
judgment to the trial Court.
Sd/-
JUDGE
RR
