Karnataka High Court
Sri Govindegowda vs Sri K Lokesh on 12 July, 2023
Bench: J.M.Khazi
1 Crl.A.No.892/2018
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.892 OF 2018
BETWEEN:
SRI GOVINDEGOWDA
S/O.LATE. BHEEMEGOWDA,
AGED ABOUT 53 YEARS
R/AT.NO.289, 9TH MAIN ROAD,
MILK COLONY, RAJAJINAGAR,
BENGALURU - 560 010.
...APPELLANT
(BY SRI. MURTHY K, ADVOCATE)
AND:
SRI K LOKESH
S/O. KAVERIGOWDA,
HINDU,
AGED ABOUT 42 YEARS
NOW RESIDING AT
NO.82, 5TH CROSS, MSR NAGAR,
MATTEKERE,
BENGALURU - 560 054.
ALSO AT:
KOPPA VILLAGE & HOBLI,
MADDUR TALUKL,
MANDYA DISTRICT
.....RESPONDENT
(BY SRI. ANIL SHEKAR K.S, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET ASIDE
THE JUDGMENT DATED 27.03.2018 PASSED BY THE XIII
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE,
2 Crl.A.No.892/2018
BENGALURU IN C.C.NO.10178 OF 2017 AND CONVICT THE
ACCUSED / RESPONDENTS FOR THE OFFENCE PUNISHABLE
UNDER SECTION 138 OF N.I.ACT AND FURTHER PASS ANY
OTHER APPROPRIATE ORDERS AS DEEMS FIT UNDER THE
FACTS AND CIRCUMSTANCES OF THE CASE, BY ALLOWING
THE ABOVE APPEAL IN THE INTEREST OF JUSTICE AND
EQUITY.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED ON 09.06.2023, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
JUDGMENT
In this appeal, the complainant has challenged the
impugned judgment and order passed by the trial Court
acquitting the accused for the offence punishable under
Section 138 of N.I.Act.
2. For the sake of convenience the parties are
referred to by their rank before the trial Court.
3. It is the case of the complainant that he is doing
real estate business in and around Bangalore City for the
past 30 years. He is also doing agriculture at his native
place at Hassan. During 2012-13, complainant came in
contact with the accused. Accused represented to him that
he is a Civil Engineer and working as Civil Contractor in
railways and completed the civil work in Commando
Hospital and in connection with the said work Rs.2.5 to 3
Crores was due to him. He also represented that he knew
many IAS officers and high level politicians. He requested
the complainant for financial assistance of Rs.10 lakhs.
Complainant managed to provide Rs.6.5 lakhs by way of
cash and also by withdrawing some amount from his
account.
3.1 Again after sometime promising to see that
telephone towers are installed in his commercial property,
accused borrowed for the sum of Rs 7.5 lakhs. Complainant
managed to get the said amount by availing loan from
Muthoot finance by pledging gold ornaments and also by
way of cash. Thus, in all the accused has borrowed a total
sum of Rs.14 lakhs promising to repay the same shortly.
When he failed to keep up with his promise, and on the
insistence of complainant, accused issued two cheques for
a sum of Rs.10 lakhs and Rs.4 lakhs. When complainant
presented them for encashment, they are dishonoured on
the ground of 'funds insufficient'. Again on the directions of
the accused, he represented the said cheques twice for
encashment. On both occasions, the cheques were
dishonoured for insufficient funds. Though in this regard,
the complainant filed complaint against the accused and his
wife, they managed to see that the police issue
endorsement. Since the police failed to take any action
against the accused and his wife, he has filed a private
complaint.
4. With regard to the dishonor of cheques,
complainant got issued a legal notice to the accused.
However, the same is returned with endorsement door
locked. Being panicked, the complainant lodged a complaint
against the accused. He was summoned to the police
station and interrogated. At the police station accused
received the copy of the legal notice by endorsing on the
office copy. However, he refused to disclose his address.
Accused has not sent any reply to the legal notice. Without
any alternative, complainant has filed a complaint.
5. After due service of notice, the accused has
appeared through counsel and contested the matter. He
pleaded not guilty and claimed the trial.
6. In order to bring home guilt to the accused, the
complainant has examined himself as a PW-1. He has relied
upon Ex.P1 to 31.
7. During the course of his statement under
Section 313 Cr.P.C, the accused has denied the
incriminating evidence.
8. Accused has not chosen to lead defence
evidence.
9. Vide the impugned judgment and order the trial
Court acquitted the accused.
10. Being aggrieved by the same, the complainant
is before this Court contending that the trial Court has
erred in acquitting the accused. The impugned judgment
and order is contrary to the facts, evidence placed on
record and as such perverse. The trial Court has failed to
appreciate the fact that the accused has not rebutted the
presumption under Section 139 of N.I. Act. The trial Court
has failed to appreciate the fact that accused has taken
contradictory defence by contending that the subject
cheques were taken by way of security and again claiming
that he had taken loan from the complainant and towards
the said security, she has collected the cheques. By not
entering into the witness box, the accused has deprived the
complainant of opportunity to cross examine him on those
aspects.
10.1 Despite complainant placing evidence on record
to prove his financial capacity, the trial Court has wrongly
held that complainant has failed to prove his case. When
the accused has failed to rebut the presumption, the trial
Court has erred in placing the burden on the complainant.
Complainant had relied upon the blank promissory notes to
demonstrate that accused had issued them along with the
cheques. However, the trial Court has drawn an adverse
inference on the ground that the said promissory notes are
blank. In the absence of accused rebutting the presumption
under Section 139 of the N.I.Act, the trial Court has erred
in placing the burden on the complainant and acquitting the
accused. Since the findings of the trial Court is perverse, it
calls for interference by this Court and prays to allow the
appeal.
11. On the other hand, learned counsel representing
the accused supported the impugned judgment and order
and prays to dismiss the appeal.
12. In support of his arguments learned counsel for
accused has relied upon the following decision:
(i) Basalingappa Vs. Mudibasappa
(Basalingappa)1
13. Heard arguments of both sides and perused the
record .
14. Though the accused dispute of having borrowed
loan of Rs.14 lakhs, he admits that the cheques in question
is drawn by him on his account maintained with the banker.
So far as the cheques coming into the position of the
complainant is concerned, the accused has come up with a
defence that he took the responsibility of getting mobile
phone towers in the commercial properties of the
complainant and at that time by way of security he had
issued two blank cheques to the complainant and misusing
the same, he has filed the present complaint. Having
regard to the fact that accused admit that the cheques
AIR 2019 SC 1983
belong to him and bear his signature, the presumption
under Sections 118 and 139 of N.I.Act is operating in
favour of the complainant and as such it is for the accused
to rebut the same, thereafter the burden would shift on the
complainant to prove the contention taken by him.
15. Before discussing the matter on the merits of
the case, it is necessary to examine whether one of the
essential ingredients of maintaining a complaint under
Section 138 of N.I. Act is complied with or not i.e., whether
legal notice was issued to the accused and it is served on
him. Ex.P8 is the legal notice. Ex P9 is the postal receipt,
Ex. P10 is the returned postal envelope. The notice sent to
accused is returned with endorsement 'left' and 'door
locked'. The endorsement dated the 27.01.2017 states that
addressee left returned to sender. The endorsement dated
31.01.2017 states that the door is locked. The accused has
alleged that intentionally complainant has not sent the
notice to his correct address and sent it to wrong address.
16. It is pertinent to note that in the complaint as
well as in the present appeal, the same address of accused
to which the legal notice was sent is given and accused is
duly served on the said address. The accused has not come
up with any evidence or suggestion as to which is his
correct address to which the legal notice ought to have
been sent. In fact, after the legal notice returned, the
complainant panicked and in his anxiety to see that the
legal notice is brought to the notice of the accused, he
lodged a complaint to the police. The police have
summoned the accused and before the concerned police he
has acknowledged the receipt of legal notice by endorsing
on the copy of legal notice which is produced with the office
copy at Ex.P8. In fact, during the course of his evidence,
the complainant has deposed regarding service of notice to
accused in person at the police station.
17. The accused for reasons best known to him has
disputed the fact of having received the copy of legal notice
before the concerned police. On the other hand during the
cross-examination of PW-1, he has suggested that the legal
notice is served on him at his address. Further, a
suggestion is also made that accused had not vacated his
address and the notice was sent to wrong address. The
very suggestion made to PW-1 that accused had not
vacated the address goes to show that intentionally he had
not received the legal notice and managed to send it back.
As noted earlier, this legal notice is sent to the very
address to which accused is served in the complaint as
before this Court. The accused has not placed any material
on record to show that he is residing somewhere else and
intentionally the notice was sent to some other address. Of
course by filing a complaint and through the concerned
police, the complainant has chosen to serve a copy of the
legal notice and as such the fact of dishonour of the
cheques is brought to the notice of the accused.
18. Though the legal notice was duly served on the
accused and intentionally he has not chosen to send any
reply spelling out his defence. In the light of the fact that
the cheques were presented within the period of validity,
legal notice was issued and it is duly served on the accused
and the complaint is filed within the period of limitation, the
presumption under Section 118 and 139 of the N.I.Act is
operating in favour of the complainant. Consequently, the
burden is on the accused to rebut the said presumption.
19. In the light of the presumption operating in
favour of the complainant, it is necessary to examine
whether the defence taken by the accused is proved and
whether it is sufficient to rebut the presumption in favour of
the complainant. As already noted, the accused has denied
of having borrowed Rs.14 lakhs from the complainant. On
the other hand during the cross-examination PW-1,
accused has suggested to him that at the time of
undertaking to get mobile towers installed in his
commercial properties, accused had issued two blank
cheques. Of course the complainant has denied that the
subject cheques were issued blank by way of security.
20. At the outset, it is relevant to note that if at all,
the accused was trying to help the complainant in getting
mobile towers installed in his commercial properties, then
absolutely, he had no liability to issue any cheques by way
of security let alone blank cheques. The very fact that the
cheques were issued supports the case of the complainant
that periodically accused had borrowed money from the
complainant and issued the cheques towards the payment
of the same. In fact, the complainant has produced
complaints given before the police and the statements
given by the accused and his wife, wherein they have
admitted of having borrowed Rs.6.5 lakhs and are not able
to repay the same. This also supports the case of the
complainant that the accused had periodically availed hand
loans and towards repayment of the same issued the
cheques. In fact, he has also produced a pronote at Ex.P16
executed by the accused. This also corroborate with the
case of the complainant.
21. During the course of cross-examination of PW-1,
the accused has suggested that complainant is not having
financial capacity to lend a sum of Rs.14 lakhs to the
accused. In order to prove his financial capacity, the
complainant has produced passbooks of himself and his
wife and RTC extracts to show that he is owning landed
properties and also money borrowed from Muthoot Finance
by pledging Gold ornaments. The accused has chosen to
suggest to the complainant that these amounts were
withdrawn and loan was taken for his personal use. Of
course complainant has denied the same.
22. Thus, through documents placed on record
coupled with the testimony of complainant, it is established
that accused had borrowed a sum of Rs.14 lakhs and
issued the subject cheques towards repayment of the
same. At the earliest available opportunity, the accused has
failed to reply to the demand made by the complainant and
to spell out his defence. It seems only as an afterthought,
he has come up with the defence that there was no such
transaction and that the cheques were issued by way of
security. Of course accused has failed to prove his defence.
23. On the other hand through the oral and
documentary evidence placed on record, the complainant
has established that the subject cheques were issued
towards repayment of legally recoverable debt or liability
and intentionally the accused has failed to maintain balance
in his account to fulfill the liability and thereby committed
the offence punishable under Section 138 of the N.I.Act.
The trial Court has misread the evidence and the
conclusions arrived at by the trial Court is contrary to the
oral and documentary evidence placed on record and the
impugned judgment and order is perverse calling for
interference by this Court.
24. In Basalingappa, the Hon'ble Supreme Court
held that the standard of proof required to rebut the
presumption is on preponderance of probabilities, whereas
the complainant is required to prove his case beyond
reasonable doubt. Of course in the present case, the
complainant has proved his case beyond reasonable doubt,
whereas even on preponderance of probabilities also the
accused has not able to prove his defence. In the result,
the appeal this is to be allowed and consequently the
accused is liable to be convicted. In the result, the appeal
succeeds and the impugned judgment and order of the trial
Court are liable to be set aside and accused is liable to be
convicted.
25. When the Court comes to the conclusion that
the charge levelled 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 judgment and order of acquittal, the next
question would be to what punishment accused is liable.
26. 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.14
lakhs. The transaction between the complainant and
accused during the year 2012. Inspite of availing hand loan
from the complainant, accused has taken up a false
defence and driven the complainant to indulge in litigation
in all these 11 years. Taking into consideration these
aspects, I am of the considered opinion that sentencing
accused to pay fine in a sum of Rs.20 lakhs, 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
27.03.2017 in C.C.No.10178/2017 on the
file of XIII Addl.CMM, Bengaluru, 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.20
lakhs in default of payment of fine, to
undergo imprisonment for a period of six
months.
(iii) The entire amount in a sum of Rs.20 lakhs
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 forthwith.
Sd/-
JUDGE
RR
