Smt. B. Parijatha vs Sri. T. B. Rudraswamy
2023 Latest Caselaw 3020 Kant

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   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 8TH DAY OF JUNE, 2023

                       BEFORE

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

         CRIMINAL APPEAL NO.1971 OF 2017

BETWEEN:

SMT. B. PARIJATHA
W/O N. RUDRASWAMY
AGED 45 YEARS
RESIDING AT SRIRAMA MANDIR ROAD,
GAYATHRI EXTENSION,
CHANNARAYAPATTANA TOWN,
HASSAN DISTRICT - 573 116.
                         ...COMPLAINANT / APPELLANT

(BY SRI. KESHAVA MURTHY C N, ADVOCATE)

AND:

SRI. T. B. RUDRASWAMY
S/O LATE BASAPPA Y
AGED 65 YEARS
R/AT ASHA PALLAVI NILAYA,
B.G. PALYA CIRCLE,
TUMKUR TOWN,
TUMKUR DISTRICT - 572 101

                                ...ACCUSED / RESPONDENT

(BY SRI. NITIN RAMESH APPOINTED AS AMICUS CURIAE
V/O/DTD 19.09.2022)


     THIS APPEAL IS FILED UNDER SECTION 378(4) OF THE
CODE OF CRIMINAL PROCEDURE PRAYING TO a) SET ASIDE
THE JUDGMENT DATED 30.08.2017 IN C.C.NO.659/2010
PASSED BY THE PRINCIPAL CIVIL JUDGE AND JUDICIAL
MAGISTRATE FIRST CLASS, CHANNARAYAPATNA, AND ALLOW
THE COMPLAINT AS PRAYED FOR; b) CONVICT THE
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RESPONDENT FOR THE OFFENCE PUNISHABLE UNDER
SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT; c)
GRANT SUCH OTHER OR FURTHER RELIEF AS THIS HON'BLE
COURT DEEMS FIT TO GRANT, IN THE INTEREST OF JUSTICE
AND EQUITY.

     THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED    ON    09.03.2023, COMING   ON   FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:


                       JUDGMENT

Being aggrieved by dismissal of the complaint filed by

her under Section 200 Cr.P.C, alleging offence punishable

under Section 138 of N.I.Act, complainant has filed this

appeal under Section 378(4) of Cr.P.C against the accused.

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 accused is

her relative i.e., her sister's husband. For his legal

necessity i.e., to repay the loan incurred by him for

purchase of the house, during July 2008 accused requested

the complainant to advance hand loan of Rs.3.5 lakhs.

Agreeing for the same, on 16.08.2008, complainant

advanced a sum of Rs.3.5 lakhs to the accused. In this

regard accused issued a post dated cheque No.664404 by

specifying the date 12.01.2010. Along with it, he also

handed over the original sale deed of the house, which he

had purchased. Accused received the said amount in the

presence of witnesses and agreed to repay the same with

interest at 18% p.a. Though for 5-6 months, he paid

interest regularly, subsequently he defaulted.

3.1. When questioned by the complainant, he gave

evasive reply. However, subsequently he directed

complainant to get the money by presenting the cheque.

When complainant presented the cheque for encashment, it

was returned dishonored on the ground of insufficiency of

funds. Intimating the same, complainant got issued a legal

notice. Though the legal notice is duly served on the

accused, he has failed to pay the amount due under the

cheque. He has also not sent any reply to the legal notice.

Without any alternative, complainant has chosen to file the

complaint.

4. After due service of notice, accused has

appeared through counsel and contested the matter.

5. He pleaded not guilty and claimed trial.

6. In order to prove the allegations made against

the accused, complainant got herself examined as PW-1

and one witness as PW-2. She has relied upon Ex.P1 to 6.

7. During the course of his statement under

Section 313 Cr.P.C, accused has denied the incriminating

evidence.

8. In support of his defence accused has examined

himself as DW-1 and relied upon Ex.D1 to 5.

9. Vide the impugned judgment and order, the trial

Court dismissed the complaint, on the ground that

complainant has failed to prove her financial capacity to

lend Rs.3.5 lakhs to the accused; on the other hand

accused has proved that the cheque in question was lost in

the house of complainant and misusing the same,

complainant has filed the complaint; the evidence of PW-2

Shivanna is not reliable.

10. Aggrieved by the impugned judgment and

order, complainant has filed this appeal contending that

impugned judgment and order is not maintainable either in

law or on facts and liable to be set aside. When accused

has not chosen to send reply to the legal notice and having

regard to the fact that the cheque belongs to the accused

and signature therein is not disputed by him, the trial Court

ought to have raised presumption under Section 118 and

139 of the N.I.Act that the cheque was issued in discharge

of legally recoverable debt or liability. The trial Court has

committed serious illegality by placing burden on the

complainant to prove that the cheque in question was

issued by accused towards discharge of legally recoverable

debt or liability.

10.1 The trial Court has not appreciated the fact that

although accused has alleged that complainant's son had

committed theft of the cheques, he has not chosen to file

any complaint to the police. At least he could have

intimated the Banker about the loss of cheques and

requested to stop payment. In the absence of the same,

the trial Court has erred in dismissing the appeal. The

findings of the trial Court are contrary to the evidence

placed on record and as such perverse and calls for

interference by this Court.

11. In support of his arguments, learned counsel for

complainant has relied upon the following decisions:

(i) M.S.Sathyanarayana Vs. Lingaraje Urs AIR Online 2022 Kar 2570 (M.S.Sathyanarayana)1

(ii) P.S.Rasiya Vs. Abdul Nazeer (P.Rasiya)2

12. On the other hand learned counsel representing

the accused supported the impugned judgment and order

and prays to dismiss the appeal.

13. Heard arguments of both sides and perused the

record.

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

that, since accused is her brother-in-law and was in need of

financial help, she advanced hand loan of Rs.3.5 lakhs and

he issued a post dated cheque (dated 12.01.2010) and

when she presented the same for encashment, it was

returned with endorsement 'insufficient funds'. Though duly

served with the legal notice, accused has failed to pay the

amount due under the cheque and he has also not sent any

AIR Online 2022 Kar 2570 (HCK)

Crl.A.No.1233-1235/2022 dt: 12.08.2022 (SC)

reply. Without any alternative, she has approached the trial

Court.

15. Though accused has failed to send reply to the

legal notice, spelling out his defence at the earliest

available opportunity, during trial he has taken up a specific

contention that the cheque in question and other cheques

were stolen by the son of complainant and making use of

unsigned cheque, a false complaint is filed.

16. In the light of these contentions, it is necessary

to examine whether the allegations made against accused

are proved. In the light of presumption under Section 118

and 139 of N.I.Act, on proof of the fact that the cheque in

question belongs to the accused, drawn on account

maintained by him and it bares his signature, presumption

is in favour of the complainant that the cheque is issued

towards repayment of a legally enforceable debt or liability.

Of course it is rebutable presumption, placing the burden

on the accused to rebut the same. Only on such rebuttal,

the onus shifts on the complainant to prove the

circumstances in which cheque came to be issued and if

accused dispute her financial capacity, also to prove the

same.

17. In order to attract the provisions of Section 138

of N.I.Act, the following ingredients are required to be

proved.

(i) The cheque in question is drawn by the accused, on an account maintained by him with a banker.

(ii) The said cheque is drawn towards payment of any amount of money to complainant from out of that account and the cheque is issued towards discharge of in whole or any part of such debt or liability.

(iii) The cheque should be presented to the Bank within a period of 6 months or 3 months as the case may be, from the date on which it is drawn or within the period of its validity, whichever is earlier.

(iv) The cheque is returned by the banker unpaid either because of the amount standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the banker.

(v) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 or 30 days as the case may be from the date of receipt of information by him from the Bank regarding the return of the cheque as unpaid.

(vi) The drawer of such cheque fails to make payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque, within 15 days of the receipt of the said notice; and

(vii) The complaint is filed within a period of 30 days of the date on which the cause of action arises under clause (c) of proviso to Sec. 138 N.I.Act (30 days after the expiry of 15 days from the date of service of notice).

18. However, Section 139 of the N.I.Act deals with

the presumption that unless the contrary is proved, the

holder of a cheque received the cheque of the nature

referred to in Section 138 of the N.I.Act, for discharge in

whole or in part of any debt or other liability. In other

words, if the complainant proves that the cheque in

question belongs to the accused and it was drawn on an

account maintained by him with a Bank and it bares his

signature, then the Court is required to draw a presumption

that it is paid towards discharge of whole or in part of any

debt or other liability.

19. In the light of these provisions, it is necessary

to examine whether complainant has proved the allegations

against accused beyond reasonable doubt or the accused is

able to dislodge the presumption by taking a specific

defence and establishing the same either by leading

evidence or through the cross-examination of the

complainant and her witnesses, if any. Of course, it is for

the complainant to prove her case beyond reasonable

doubt, whereas accused is required to prove his defence by

preponderance of probabilities.

20. Now coming to the present case, it is not in

dispute that the cheque in question was issued to the

account maintained by accused with his banker and it bares

his signature. In Rangappa Vs. Sri Mohan3, the Hon'ble

Supreme Court held that the presumption under Section

139 of N.I Act includes a presumption that there exist a

legally enforceable debt or liability. However, such

presumption is rebuttable in nature. In P.Rasia, the

Hon'ble Supreme Court held that "the Court is under an

obligation to raise a presumption under Section 139 of

N.I.Act that the holder of a cheque received the cheque of

the nature referred to in Section 138 for discharge, in

whole or in part, of any debt or other liability, unless the

contrary is proved. Therefore, once the initial burden is

discharge by the complainant that the cheque was issued

by the accused and signature and the issuance of cheque is

not disputed by the accused, in that case the onus will shift

upon the accused to prove the contrary that the cheque

was not issued for any debt or other liability. The

presumption under Section 139 of the N.I.Act is a statutory

presumption and thereafter once it is presumed that the

cheque is issued towards repayment of in whole or in part

of any debt or liability which is in favour of the

(2010) 11 SCC 441 Dated 07.05.2021

complainant/holder of the cheque, in that case, it is for the

accused to prove the contrary."

21. In the present case, complainant has fulfilled all

the necessary ingredients of Section 138 of the N.I.Act, by

issuing the notice within 15 days of the receipt of

endorsement by the banker, calling upon the accused to

pay the amount due under the cheque within a period of 15

days from the date of receipt of the notice.

22. It is also not in dispute that accused has

received the said notice. However, he has not chosen to

send any reply denying and disputing his liability under the

cheque. After service of the notice, within 30 days,

complainant has filed the complaint and thereby all the

necessary ingredients of Section 138 are fulfilled. In the

light of the presumption under Section 139 of the N.I.Act,

the complainant has discharged the initial burden placed on

her. Therefore, the onus has shifted on the accused to

prove the contrary to dislodge the presumption under

Section 139 of the N.I.Act.

23. As already discussed, accused has not chosen to

send any reply to the legal notice spelling out his defence,

at the earliest available opportunity. However, during the

course of trial, he has taken up a defence that for 10-12

years, he kept the son of complainant in his house, for the

purpose of his education and because of his bad habits, he

caused accident, as a result of which accused suffered loss.

For this reason, when accused removed him from his

household, at the time of leaving, he committed theft of

few cheques and the subject cheque of the complaint is one

of them. He has alleged that the complainant has

distributed the remaining cheques to her other relatives

and got filed criminal cases against the accused.

24. While this defence is taken during the cross-

examination of the complainant, during his evidence,

accused has deposed that the theft of the said cheques

took place when he visited the house of complainant. He

has taken up a specific defence that he is in the habit of

keeping the signed cheques with him in the house and also

wherever he goes he carries them, to enable his sons to

issue them for business purpose. While he so visited the

house of the complainant on the last occasion, the

complainant's son committed theft of the said cheques and

used one of the them for filing the present complaint and

remaining cheques were distributed to other relatives and

criminal cases were filed against him through them.

25. The accused has also taken up a defence that

his financial condition is so good that he would not have

taken loan of paltry sum of Rs.3.5 lakhs. At the same time

he has also taken up a defence that the financial condition

of the complainant is not such that she would be in a

position to advance loan of Rs.3.5 lakhs to him.

26. Before appreciating the defence taken by the

accused during the trial, it is necessary to refer to the

decision of the Hon'ble Supreme Court in Tedhi Singh Vs.

Narayan Dass Mahant (Tedhi Singh)4, wherein it is held

that the complainant need not show in first his financial

capacity, unless accused sets up a case questioning the

complainant's capacity in reply to the statutory notice. In

the light of this ratio, it is necessary to appreciate the

defence taken by the accused, especially when he has not

(2022) 6 SCC 735

sent any reply disclosing his defence at the first available

opportunity.

27. Thus, it is the definite contention of the accused

that he used to keep signed blank cheques and the son of

complainant has committed theft of them. At the outset, he

is not very sure whether the cheques were stolen from his

house or from the house of complainant when he visited

her. Though the accused has specifically pleaded that his

financial condition is very sound and as such there was no

need for him to take any loan from the complainant, during

his cross-examination, it is elicited that he is running a fair

price shop and in a fair price shop he is required to sell the

grains at the rate fixed by the Government and from the

said shop he is not having any profit. Other than this, the

accused has not come up with any source of income to

show that his financial condition was very sound.

28. In fact it is the definite case of the complainant

that at the time when she advanced Rs.3.5 lakhs to the

accused, he had incurred debt due to purchase of a house

and in order to repay the said debt, he took loan of Rs.3.5

lakhs from her. Though accused has disputed this fact,

during his cross-examination he has admitted that when he

purchased a residential house, he had taken loan from

others. In fact he has deposed that subsequently he has

sold the said house. This fact indicates that the financial

condition of the accused was not sound, especially when he

purchased the said residential house. It supports the case

of the complainant.

29. On the other hand, in order to prove that her

financial condition was very good, complainant has made

suggestions to the accused during his cross-examination

that her husband was working as a Bailiff and her

daughter-in-law was also an employee of the Court, her son

runs a book shop in front of Adi Chunchanagiri First Grade

College and getting income of Rs.1,000/- per day. She has

also suggested that the husband of complainant is having a

house and it is rented out on a monthly rent of

Rs.10,000/-, she is also having a coconut garden, wet land,

in Channarayapatna also her husband is having a RCC

house and it is also rented out.

30. A specific suggestion is made to accused that

from the agricultural land, complainant is getting income of

Rs.10- 15 lakhs per year, apart from the other income. It is

pertinent to note that accused is not a stranger to the

complainant. He is the husband of her sister. Accused has

not at all denied the suggestions with regard to the

financial condition of the complainant and her family

members. He has only expressed his ignorance to those

suggestions. Through these suggestions, the complainant

has established that her financial condition is sound.

31. In fact in the complaint itself, complainant has

stated that when accused requested for advance of Rs.3.5

lakhs, immediately she borrowed a sum of Rs.3 lakhs from

one Shivanna and subsequently she has repaid the said

loan to Shivanna. The remaining amount of Rs.50,000/-

was with her. PW-2 - Srinivasa has deposed with regard to

the accused handing over cheque to the complainant and

he speaks about the presence of Shivanna at that time.

32. Though as per the decision of Hon'ble Supreme

Court in Tedhi Singh, accused has not taken up defence of

complainant not having financial capacity by sending reply

to the legal notice and he has taken such defence only

during the course of trial, still the complainant has led

sufficient evidence to prove her financial capacity. On the

other hand accused has failed to establish that his financial

condition was very sound and as such he had no occasion

to borrow the amount due under the cheque. At the same

time he has failed to prove that for about 10-12 years, the

son of the complainant was living in his house and at that

time he has committed theft of the cheques or he

committed theft of the said cheques, when he visited the

house of the complainant. Whether the theft of the cheques

was committed in his house or in the house of the

complainant, what is reasonable to expect from the accused

is to file a complaint with regard to theft of the cheques. In

fact in M.S.Satyanarayana, the co-ordinate Bench of this

Court refused to accept the defence of the accused that the

cheque in question was stolen, especially for the reason

that he did not choose to file any complaint.

33. If at all the explanation of the accused that he

did not file the complaint looking to the fact that the person

who committed theft is the son of his sister-in-law, is

accepted as correct, at least he could have sent intimation

to the Bank, stating that he has lost so many cheques and

instruct it to stop payment. It is very unnatural that even

after coming to know that he has lost the cheques and

particularly the son of the complainant has committed the

theft of the said cheques, accused has not chosen to send

stop payment intimation to the Bank. Even after he

received the legal notice from the complainant, he has not

chosen to send any reply and at that time also not chosen

to file either a complaint or intimate the banker about the

loss of other cheques. The conduct of the accused is very

unnatural and it does inspire confidence in the mind of the

Court as to the veracity of the said contention. In the light

of the presumption under Section 139 of N.I.Act and having

regard to the oral and documentary evidence led by the

complainant, she has proved beyond reasonable doubt that

accused has borrowed a sum of Rs.3.5 lakhs and towards

repayment of the same, he had issued the cheque in

question.

34. The trial Court is swayed away by the fact that

the cheque does not contain the handwriting of the

accused. Under Section 20 of the N.I.Act, the presumption

under Section 118 and 139 of the N.I.Act is also attracted

in respect of a inchoate document. In the light of the

evidence led by the complainant, this Court is of the

considered opinion that merely because the contents of the

cheque were not in the handwriting of the accused would

not come in the way of the complainant proving the

allegations against the accused.

35. In order to prove that the son of the

complainant has committed theft of the cheques and that

complainant and her husband has distributed some of the

cheques to others and got filed complaints, the accused has

examined one Narasimha Murthy, Ishwara Prasanna S and

B.S.Chethan as DWs-1 to 3 in C.C.No.621/2010 filed by the

husband of the present complainant. These persons have

filed affidavits stating that Complainant's husband had

handed over three cheques belonging to the accused, which

was stolen by his son and made them to file criminal

complaints and after realizing that what they are doing is

wrong, they are filing these affidavits.

36. It is pertinent to note that in C.C.No.621/2010,

the present complainant is not a party. Therefore, she did

not have the opportunity to cross-examine these witnesses.

Of course in the present complaint, accused has not chosen

to examine them. Consequently, their affidavits filed in

C.C.No.621/2010 wherein complainant is not a party and

she did not have the opportunity to cross-examine them

cannot be relied upon and read in as evidence in this case.

37. Without examining all these aspects in the right

perspective the trial Court has erred in holding that the

allegations against accused are not proved and on the other

hand accused has proved his defence. The findings of the

trial Court are perverse, calling for interference by this

Court and as such the impugned judgment and order is

liable to be set aside.

38. When once it is held that complainant has

proved the allegations against the accused, the next

question would be to what punishment accused is liable.

39. 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. As

evident from Ex.P-1, the amount involved is Rs.3.5 lakhs.

By taking a false defence, the accused has driven the

complainant to indulge in litigation in all these 13 years.

Having regard to these aspects, I am of the considered

opinion that sentencing accused to pay fine in a sum of

Rs.7,00,000/- 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

30.08.2017 in C.C.No.659/2010 on the file

of Prl.Civil Judge and JMFC,

Channarayapatna, is set aside.

     (ii)    Accused    is     convicted     for    the    offence

             punishable      under     Section     138     of   the

             N.I.Act.

(iii) Accused is sentenced to pay fine in a sum

of Rs.7,00,000/-, in default of payment of

fine, accused is sentenced to undergo

imprisonment for a period of six months.

(iv) Out of the fine amount a sum of

Rs.6,50,000/- is ordered to be paid to the

complainant by way of compensation.

Remaining Rs.50,000/- shall be defrayed

towards the litigation expenses.

(v) Registry is directed to return the trial Court

records along with copy of this judgment.

Appreciation is placed on record for the valuable assistance rendered by the learned Amicus Curiae representing the respondents/accused. The fees of learned Amicus Curiae is fixed at Rs.5,000/-. The High Court Legal Services Committee is directed to pay the same.

Sd/-

JUDGE

RR