Karnataka High Court

B R Pradeep Kumar vs Sri B R Ramananda on 28 November, 2023

                          -1-
                                     CRL.A No. 283 of 2016



  IN THE HIGH COURT OF KARNATAKA AT BENGALURU
    DATED THIS THE 28TH DAY OF NOVEMBER, 2023
                        BEFORE
        THE HON'BLE MR. JUSTICE S RACHAIAH
        CRIMINAL APPEAL NO.283 OF 2016 (A)
BETWEEN:
   B R PRADEEP KUMAR
   S/O LATE SRI D RAMAKRISHANAIAH
   AGED ABOUT 31 YEARS
   R/AT NO. BOLAMARANA HALLI
   SONDEKOPPA POST
   NELAMANGALA
   BANGALORE RURAL DIST - 560 097.
                                              ...APPELLANT
(BY SRI. PRADEEP NAIK K, ADVOCATE)

AND:
   SRI B RAMANANDA
   S/O SRI. BRAMAPPA
   AGED ABOUT 50 YEARS
   R/AT GURUPREETH RESIDENCY
   NO.45, F-8, 4TH CROSS
   BOOPASANDRA
   BANGALORE - 560 075.
                                            ...RESPONDENT
(BY SRI. NITHIN GOWDA K C, AMICUS CURIAE)

     THIS CRL.A IS FILED U/S.378(4) OF CR.P.C PRAYING TO
SET ASIDE THE JUDGMENT AND ORDER PASSED BY THE
APPELLATE COURT IN CRIMINAL APPEAL NO.967/2014 DATED
14-12-2015 AND MAY BE PLEASED TO CONFIRM THE
JUDGMENT AND ORDER PASSED BY THE XIX ADDITIONAL
CHIEF   METROPOLITIAN     MAGISTRATE,    BENGALURU    IN
C.C.NO.19494/2009 DATED 08-07-2014 AND ETC.,

     THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED ON 30.08.2023 BEFORE THE PRINCIPAL BENCH AT
BENGALURU, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT BEFORE THE DHARWAD BENCH, THIS DAY, THE
COURT DELIVERED THE FOLLOWING:-
                                     -2-
                                               CRL.A No. 283 of 2016



                              JUDGMENT

1. This appeal is filed by the appellant/complainant

being aggrieved by the judgment and order of acquittal dated

14.12.2015 in Crl.A.No.967/2014 on the file of the LXVII

Additional City Civil and Sessions Judge (CCH.No.68),

Bengaluru City, wherein the Appellate Court set aside the

judgment of conviction and order of sentence dated 08.07.2014

in C.C.No.19494/2009 passed by the XIX Additional Chief

Metropolitan Magistrate, Bengaluru, for the offence punishable

under Section 138 of the Negotiable Instruments Act, 1881 (for

short, 'N.I. Act').

2. The rank of the parties in the Trial Court henceforth

will be considered as it is, for convenience.

Brief facts of the case:

3. The complainant and the accused are known to

each other for several years. Both were working as Civil

Contractors and both were working at Bengaluru. As per the

averments of the complaint, the accused had approached the

complainant in the month of July 2008 for financial assistance.

The accused requested the complainant to lend a sum of

Rs.2,10,000/-. Accordingly, on 05.07.2008, the complainant

stated to have lent the said amount. It was assured to the

complainant that the amount would be repaid within five

months along with the interest at the rate of 2% per month.

Even after the lapse of several months, the accused neither

repaid the amount nor paid the interest as agreed upon. When

the complainant demanded to refund the amount, the accused

had issued two post-dated cheques, one for Rs.1,00,000/-

dated 24.01.2009 and another for a sum of Rs.1,10,000/-

dated 25.01.2009 and asked the complainant to present those

two cheques for encashment. When those cheques were

presented for encashment through his banker, the cheques

came to be dishonoured as 'insufficient funds'. After receiving

the intimation from the Bank, the complainant has issued the

legal notice dated 19.02.2009 calling upon the accused to pay

the cheque amount. As per the averments of the complaint,

the said notice is served to the accused. Inspite of service of

notice, the accused neither paid the amount nor replied the

said notice. Hence, the complainant has filed the complaint.

4. To prove the case of the complainant, the

complainant examined himself as PW1 and got marked 11

documents as Exs.P1 to P11 and also got examined another

witness as PW2. On the other hand, the accused examined

himself as DW1 and got marked 2 documents as Exs.D1 and

D2. The Trial Court after appreciating the oral and documentary

evidence on record, recorded the conviction and sentenced him

to pay a fine of Rs.2,60,000/- and in default of the same, he

shall undergo simple imprisonment for six months. Being

aggrieved by the same, the accused preferred an appeal before

the Appellate Court. The Appellate Court has recorded the

acquittal by setting aside the judgment of conviction passed by

the Trial Court.

5. Heard Shri Pradeep Naik.K., learned for the

appellant and Shri Nithin Gowda K.C., learned Amicus Curiae

for the respondent. Perused the records.

6. It is the submission of the learned counsel for the

appellant that the findings of the Appellate Court in recording

the acquittal which is inappropriate and against to the evidence

and law on record. Hence, the judgment of acquittal passed by

the Appellate Court is liable to be set aside.

7. It is further submitted that the Appellate Court

misconstrued the law on the Negotiable Instruments Act and

asked the complainant to prove the case beyond reasonable

doubt even though the accused has not rebutted the

presumption which is envisaged under Section 139 of N.I. Act

appears to be inappropriate and irrelevant.

8. It is further submitted that the Appellate Court

relied on the judgment of the Hon'ble Supreme Court in the

case of Krishna Janardhan Bhat v. Dattatraya G. Hegde1

which is over-ruled and the ratio of the said judgment should

not have been considered by the Appellate Court. Considering

the said ration and recorded the acquittal which appears to be

perverse and not appropriate. Therefore, the finding of the

Appellate Court in recording the acquittal is required to be set

aside. Making such submission, learned counsel for the

appellant/complainant prays to allow the appeal.

9. Per contra, learned Amicus Curiae for the

respondent/accused vehemently justified the judgment and

order of acquittal passed by the Appellate Court and opined

that the accused rightly recorded the acquittal on considering

the facts and circumstances and also evidence on record.

Initially, the complainant has to prove the case beyond all

(2008) 4 SCC 54

reasonable doubt. Thereafter, the burden would be shifted to

the accused to rebut the presumption. The accused /

respondent has contended and raised some discrepancies and

also inconsistencies in the evidence of PW.1. The Appellate

Court considering the said aspects and recorded the acquittal

which is appropriate. It is further submitted that interference

with the said findings may not be warranted. Making such

submission, learned Amicus Curiae for the respondent prays to

dismiss the appeal.

10. After having heard the learned counsel for the

respective parties and also the findings of the Appellate Court

in recording the acquittal, it is appropriate to mention the

proposition of law before adverting to the facts of the case.

11. It is settled principle of law that in a case where the

appeal is filed against the acquittal, the Appellate Court while

dealing with such appeal has to interfere in the findings only

where it is noticed the perversity in recording the acquittal by

the Courts below. The Appellate Court is restrained to interfere

in such cases as a matter of routine.

12. In the present case, it is stated in the complaint

that the complainant and accused were friends, working as Civil

Contractors, hence, they knew each other. It is said that the

accused has borrowed loan of Rs.2,10,000/- and assured that

he would repay the said amount within five months. However,

he did not pay the amount within the stipulated time. When it

was demanded to refund the amount, he stated to have issued

two cheques. When those cheques were presented for

encashment, the said cheques were dishonoured as 'funds

insufficient' and notice was issued to that effect. In spite of

notice having been received, the accused neither paid the

amount nor replied to the said notice.

13. It is also relevant to take note of the legal

proposition in respect of the presumption and its mode of

rebutting the same. Now, it is relevant to refer to the

judgment of the Hon'ble Supreme Court in the case of Kishan

Rao v. Shankargouda2, paragraph Nos.18 to 22 reads thus:

"18. Section 139 of the 1881 Act provides for drawing the presumption in favour of holder. Section 139 is to the following effect:

"139. Presumption in favour of holder.-- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge,

(2018) 8 SCC 165

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

19. This Court in Kumar Exports v. Sharma Carpets [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 : (2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823] , had considered the provisions of the Negotiable Instruments Act as well the Evidence Act. Referring to Section 139, this Court laid down the following in paras 14, 15, 18 and 19: (SCC pp. 519-20) "14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.

15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions" (irrebuttable). The term "presumption" is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some

matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof".

18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.

19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is

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proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over."

20. This Court held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. The following was held in para 20: (Sharma Carpets case [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 :

(2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823] , SCC p. 520) "20. ... The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time,

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it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. ..."

21. In the present case, the trial court as well as the appellate court having found that cheque contained the signatures of the accused and it was given to the appellant to present in the Bank, the presumption under Section 139 was rightly raised which was not rebutted by the accused. The accused had not led any evidence to rebut the aforesaid presumption. The accused even did not come in the witness box to support his case. In the reply to the notice which was given by the appellant, the accused took the defence that the cheque was stolen by the appellant. The said defence was rejected by the trial court after considering the evidence on record with regard to which no contrary view has also been expressed by the High Court.

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22. Another judgment which needs to be looked into is Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 :

(2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] .

A three-Judge Bench of this Court had occasion to examine the presumption under Section 139 of the 1881 Act. This Court in the aforesaid case has held that in the event the accused is able to raise a probable defence which creates doubt with regard to the existence of a debt or liability, the presumption may fail. Following was laid down in paras 26 and 27: (SCC pp. 453-54) "26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] , may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.

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27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant- accused cannot be expected to discharge an unduly high standard of proof."

14. In another case in the case of Bir Singh v.

Mukesh Kumar3, paragraph No.18, 20 and 24 reads as under:

"18. In passing the impugned judgment and order dated 21-11-2017 [Mukesh Kumar v. Bir Singh, 2017 SCC OnLine P&H 5352], the High Court misconstrued Section 139 of the Negotiable

(2019) 4 SCC 197

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Instruments Act, which mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Needless to mention that the presumption contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque.

20. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the prosecution to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact as held in Hiten P. Dalal [Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 :

2001 SCC (Cri) 960] .

24. In K.N.Beena v. Muniyappan [K.N.Beena v. Muniyappan, (2001) 8 SCC 458 : 2002 SCC (Cri) 14] , this Court held that in view of the provisions

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of Section 139 of the Negotiable Instruments Act read with Section 118 thereof, the Court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was rebuttable and could be rebutted by the accused by proving the contrary. But mere denial or rebuttal by the accused was not enough. The accused had to prove by cogent evidence that there was no debt or liability. This Court clearly held that the High Court had erroneously set aside the conviction, by proceeding on the basis that denials/averments in the reply of the accused were sufficient to shift the burden of proof on the complainant to prove that the cheque had been issued for discharge of a debt or a liability. This was an entirely erroneous approach. The accused had to prove in the trial by leading cogent evidence that there was no debt or liability."

15. On reading of the above said judgments, it makes it

clear that the initial burden lies on the accused to rebut the

presumption. The accused need not prove the case beyond all

reasonable doubt. Even if the accused raises the probable

defence and if it is acceptable, it may be sufficient to shift the

burden on the complainant to prove his case. Considering the

dictum of the Hon'ble Supreme Court, now it is relevant to take

note of the defence of the accused.

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16. The accused has cross-examined PW.1 and also

examined himself as DW.1. He contended that there was no

monetary transaction between himself and the complainant and

he has not received any notice from the complainant before

registration of the case. Further, he has admitted that there

was monetary transaction between himself and brother-in-law

of the complainant. The cheques were issued to the said

brother-in-law of the complainant. However, the said

Chandrakumar.K.V. filed a case through the complainant in

order to gain wrongfully even though the entire amount is paid.

He has produced several documents to demonstrate that the

said cheques were of the year 2008, however, those cheques

were presented for encashment in the year 2009 which is

barred by limitation and also not fetching any liability etc.,

Even though the accused has contended that the cheques

which are marked as Exs.P1 and P2 were issued to the brother-

in-law of the complainant, he has not made any efforts to prove

the said contention.

17. It is needless to say that mere stating that the

cheques were issued to some other person and there was no

transaction between the complainant and himself is not

sufficient to rebut the presumption. Moreover, on reading of

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the findings of the Appellate Court, it is noticed that the

Appellate Court under misconception of law opined that the

initial burden lies on the complainant to prove the case beyond

all reasonable doubt itself is unsustainable. The said aspect is

against to the settled principle of law. Therefore, the same is

required to be set aside.

18. When the accused has not led any cogent evidence

to rebut the presumption, it cannot be said that the

presumption has been rebutted and the burden has been

shifted to the complainant to prove his case. It is needless to

say that the Statute provides certain privileges to the

complainant / drawee of the cheque in the form of

presumption. Initially, the complainant need not prove his

case. Once the ingredients of Section 138 of N.I. Act are

satisfied, the burden lies on the accused to rebut the

presumption. In the present case, the accused has not

rebutted the presumption. The Appellate Court has committed

an error in recording the acquittal. However, the Trial Court

recorded the conviction which is appropriate and the same

required to be confirmed.

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19. In the light of the observation made above, I

proceed to pass the following:

ORDER

i) The Criminal Appeal is allowed.

ii) The judgment and order of acquittal dated

14.12.2015 passed in Criminal Appeal No.967/2014

by the learned LXVII Additional City Civil and

Sessions Judge (CCH No.68), Bengaluru, is set

aside.

iii) The judgment of conviction and order of sentence

dated 08.07.2014 passed in C.C.No.19494/2009 by

the learned XIX Additional Chief Metropolitan

Magistrate, Bengaluru, is hereby confirmed.

iv) The assistance rendered by the learned Amicus

Curiae is appreciated. The appreciation is placed on

record. The Legal Services Authority is directed to

pay remuneration of Rs.3,000/- (Rupees Three

Thousand only) to the learned Amicus Curiae, for

his effective assistance, forthwith.

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v) The registry is directed to send the records along