R Heeranna vs P Padmanabha
2023 Latest Caselaw 6995 Kant

                          1

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 05TH DAY OF OCTOBER, 2023

                       BEFORE

   THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR

 CRIMINAL REVISION PETITION NO.496 OF 2016

BETWEEN:

R. HEERANNA
S/O. RAMACHANDRA RAO,
AGED ABOUT 53 YEARS,
RESIDING AT NO.132,
VARALAKSHMI KRUPA,
9TH CROSS, DOCTORS CORNER,
GOKULAM III STAGE,
MYSURU-570 002.
                                          ....PETITIONER

(BY SRI. YASHUDHAR HEGDE, ADVOCATE FOR
 SRI. AJAY .J. NANDALIKE, ADVOCATE)

AND:

P. PADMANABHA,
S/O P. RAMALINGAIAH,
AGED ABOUT 65 YEARS,
RESIDING AT NO.826, 4TH WEST CROSS,
ASHOKA ROAD,
MYSURU-570 001.
                                         ...RESPONDENT
(BY SRI. RAHUL DESAI, ADVOCATE)

     THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 R/W 401 OF CR.P.C PRAYING TO SET ASIDE
THE    JUDGMENT   DATED    06.02.2016   PASSED   IN
CRL.A.NO.12/2014 BY THE I ADDL. S.J., MYSURU AND
CONSEQUENTLY PASS AN ORDER OF ACQUITTAL IN FAVOUR
                           2

OF THE ACCUSED THEREBY DISMISSING THE CRIMINAL
COMPLAINANT BEARING C.C.NO.3047/2008 FILED BEFORE V
ADDL. I CIVIL JUDGE AND JMFC, MYSURU AND ORDER FOR
THE SUSPENSION OF THE EXECUTION OF THE SENTENCE
AND JUDGMENT OF CONVICTION PASSED IN CRIMINAL
COMPLAINT NO.3047/2008 DATED 23.12.2013 BY THE V
ADDL. I CIVIL JUDGE AND JMFC, MYSURU WHICH HAS BEEN
CONFIRMED BY THE I ADDL. S.J., MYSURU VIDE ITS
JUDGMENT DATED 06.02.2016 PASSED IN CRL.A.NO.12/2014
AND ALLOW THIS CRL.RP.

     THIS CRIMINAL REVISION PETITION HAVING BEEN
HEARD AND RESERVED FOR ORDERS ON 14.09.2023,
COMING ON FOR 'PRONOUNCEMENT OF ORDER' THIS DAY,
THE COURT MADE THE FOLLOWING:

                        ORDER

This revision petition is filed under Section 397

read with Section 401 of Code of Criminal Procedure by

the revision petitioner / accused challenging the

judgment of conviction and order of sentence passed by

V Additional Civil Judge and JMFC, Mysore in

C.C.No.3047/2008 and confirmed in Crl.A.No.12/2014

on the file of I Additional Sessions Judge, Mysore vide

judgment dated 06.02.2016.

2. For the sake of convenience, the parties

herein are referred with original ranks occupied by

them before the trial Court.

3. The brief factual matrix leading to the case

are that the accused and complainant are well

acquainted with each other and with the said

acquaintance accused availed a loan from complainant

for his financial requirement of business of Rs.5 Lakhs

on 17.12.2004, Rs.3 Lakhs on 07.02.2005, Rs.2 Lakhs

on 17.03.2005, Rs.1,30,000/- on 07.04.2005, Rs.3

Lakhs on 02.06.2005, Rs.1,90,000/- on 26.11.2005

and Rs.3,80,000/- on 22.12.2005. The accused has

issued the cheques while borrowing the loan amounts

and he has paid interest at the rate of 18% per annum

upto January 2006. It is also asserted that thereafter

on 25.01.2006, accused borrowed a further loan of

Rs.8 Lakhs and at that time, he has taken back all the

cheques issued earlier and then issued the cheque

dated 24.03.2006 for Rs.28 Lakhs. It is further

asserted that when complainant presented the said

cheque for encashment, it was dishonored for

insufficient of funds. It is also asserted that accused

had issued a legal notice and inspite of service of

notice; accused has not paid the cheque amount.

Hence, he filed a complaint.

4. On the basis of the complaint, the learned

Magistrate has taken cognizance of the offence under

Section 138 of Negotiable Instruments Act, 1881

(hereinafter referred to as 'the N.I.Act' for short) and

issued process against the accused. The accused has

appeared through his counsel and was enlarged on

bail. The plea under Section 138 of the Act was

recorded and the accused denied the same.

5. The complainant was examined himself as

PW1 and placed reliance on 14 documents marked at

Ex.P1 to Ex.P14. Then the statement of the accused

under Section 313 of the Cr.P.C was recorded and the

accused denied the incriminating evidence against him.

He has also got examined himself as DW1 and got

examined one witness on his behalf as DW2. He placed

reliance on 7 documents marked at Ex.D1 to Ex.D7.

6. After hearing the arguments and after

appreciating the oral and documentary evidence, the

learned Magistrate has convicted the accused for the

offence under Section 138 of the N.I.Act and imposed a

fine of Rs.33,10,000/- with a default clause.

7. Being aggrieved by this judgment of

conviction and order of sentence, the accused has

approached the learned I Additional Sessions Judge,

Mysore, in Crl.A.No.12/2014. The learned Sessions

Judge after re-appreciating the oral and documentary

evidence dismissed the appeal by confirming the

judgment of conviction and order of sentence passed by

the learned Magistrate. Against these concurrent

findings, the accused is before this court by way of this

revision.

8. Heard the arguments advanced by the

learned counsel for the revision petitioner / accused

and the learned counsel for respondent / complainant.

Perused the records.

9. The learned counsel for the revision

petitioner / accused would contend that the cheque is

for Rs.28 Lakhs and accused is only an Ayurvedic

Doctor and he had no means to advance such a huge

amount. He would also contend that the account

statement produced only discloses that the amount

was transferred from one OD account to other OD

account, but it does not refer to Rs.28 Lakhs of huge

loan. He would assert that the accused has admitted a

transaction of Rs.2,50,000/- and issuance of cheque

for Rs.1,25,000/- each and one cheque was obtained

as security, but the same has been misused after

payment of Rs.2,50,000/- as the cheque was not

returned under the guise of misplacement. The learned

counsel would also invite the attention of the court to

the income tax returns submitted by the complainant,

which shows that his income for the period of 2004-06

is Rs.80,000/- and odd and it is hard to accept that he

is capable of advancing huge amount of

Rs.28,00,000/-. He further invites the attention of this

court to evidence of DW2 who is an income tax officer

where in it is established that along with income tax

returns the statement now produced was not enclosed.

He would also contend that though the complainant

admitted that he is in possession of the documents to

prove his financial status, he has not produced the

same and the income tax returns discloses that he did

not have any income to advance huge loan of Rs.28

Lakhs. He would also assert that mere ground of

attempt to settlement cannot be a ground for

conviction, which was done by the courts below, which

is erroneous. Hence, he would submit that both the

courts below have committed an error in convicting the

accused and sought for allowing the revision.

10. Per contra, the learned counsel for the

respondent would submit his argument supporting the

judgment of conviction and order of sentence asserting

that the income tax records discloses the financial

status of the complainant and further, the cheque and

signature have been admitted. Hence, he would dispute

the claim of revision petitioner.

11. Having heard the arguments and after

appreciating the oral and documentary evidence, now

the following point would arise for my consideration:

"Whether the judgment of conviction and order of sentence passed by the trial court and confirmed by the appellate court suffers from perversity, illegality

and arbitrariness so as to call for any interference by this court?

12. The complainant asserted that accused has

availed loan of Rs.5 Lakhs on 17.12.2004, Rs.3 Lakhs

on 07.02.2005, Rs.2 Lakhs on 17.03.2005,

Rs.1,30,000/- on 04.05.2005, Rs.3 Lakhs on

02.06.2005, Rs.1,90,000/- on 26.11.2005 and

Rs.3,80,000/- on 22.12.2005 by issuing independent

cheques. It is further asserted that the accused has

paid interest at the rate of 18% upto January 2006 and

on 25.01.2006, he availed Rs.8 Lakhs loan and issued

the disputed cheque under Ex.P1 by receiving back all

other cheques. According to the complainant, he

presented the said cheque and it was bounced and

hence, he claims to have lodged a complaint. The

accused has disputed this transaction. A legal notice

came to be issued as per Ex.P3, but the same was

admittedly replied as per Ex.P6. In Ex.P6, the accused

has disputed the very financial status of the

complainant to advance huge loan of Rs.28 Lakhs as

asserted on various dates.

13. The complainant was examined as PW1 and

in his examination in chief he has reiterated the

complaint allegations. In the cross-examination, he

asserts that he is an Ayurvedic Doctor practicing since

40 years and earlier he was having a clinic and at

present, he did not have any clinic. He asserts that

now he is sitting in front of RTO office and issuing

medical certificates to the persons who are seeking

licence regarding their fitness. He further asserts that

everyday he used to issue certificates upto 10 to 15

persons or sometimes 2 to 3 persons and he asserts

that since last 10 to 15 years, he is doing this practice

alone. He claims that his income from the practice is

Rs.3,000/- to Rs.4,000/- per month and he is

possessing a complex in Ashok Road and he is getting

Rs.20,000/- to Rs.25,000/- as rent. If this version is

accepted, then the monthly income of the complainant

is hardly Rs.25,000/-. He is required to maintain his

family in this income.

14. He further admits that he possess account

only in Kanikaparmeshwari Cooperative bank and

further admits that since, 15 years he is an income tax

assessee, but he pleads ignorance as to in which ward

he submits the income tax returns.

15. Subsequently, the complainant has

produced the income tax returns submitted by him as

per Ex.P10 to Ex.P12. Ex.P10 is the income tax return

for the year 2003-04 and the income of the

complainant is shown to be Rs.51,940/-. This is for the

assessment year 2004-05 and income was from

01.04.2003 to 31.03.2004. It will not assist the

complainant in proving his income as the transaction

is said to have taken place from 17.12.2004 to

25.01.2006.

16. Ex.P11 is a material document, which

discloses that it is for the year 01.04.2004 to

31.03.2005. Three transactions viz., Rs.5 Lakhs dated

17.12.2004, Rs.3 Lakhs dated 07.02.2005 and Rs.2

Lakhs dated 17.03.2005 fall within this financial

period, which is about Rs.10 Lakhs. The total annual

income in Ex.P11 is shown to be Rs.51,940/- from the

property, by way of rent and professional income is

shown to be Rs.35,210/- and total income is

Rs.87,150/- as per Ex.P11. When his total income for

the said financial year is Rs.87150/-, it is hard to

accept the contention of the revision petitioner that he

has advanced loan of Rs.10 Lakhs in this period. This

is quite unnatural and unacceptable.

17. However, along with this income tax returns,

he produced capital account balance sheet, wherein

sundry creditors were shown to be Rs.11 Lakhs and

net profit is shown to be Rs.1,09,000/- but this is only

his statement. However, this statement does not tally

with income tax returns submitted by the complainant

to the income tax department, wherein he has shown

his total income including professional income to the

tune of Rs.87,150/-, but now on the basis of this

capital account balance sheet, he wants that court

should rely on this document to prove his income

capacity. But when this document does not correlate

with the income tax returns, it cannot be accepted.

Apart from that, DW2 is examined on behalf of accused

who is an Income Tax Officer, wherein he has

specifically stated that while submitting the income tax

returns, the balance sheet and profit and loss

statement was not submitted by the complainant.

Hence, this document cannot be looked into. Apart

from that, PW1 himself has admitted in his cross-

examination that Rs.28 Lakhs advanced to the accused

was not shown in his income tax return.

18. The same position is with Ex.P12, which is

the accounts statement from 01.04.2005 to

31.03.2006. The total income is shown to be

Rs.98,150/- in this period and out of the said amount,

the professional income is shown to be Rs.46,210/-

and house income is shown to be Rs.51,940/-. Along

with it, again a balance sheet was produced, but the

said balance sheet is not part of income tax returns as

stated by DW2. The remaining amount of

Rs.1,30,000/-, Rs.3 Lakhs, Rs.1,90,000/-

Rs.3,80,000/- and Rs.8 Lakhs fall within this period,

but that is not forthcoming in this account statement.

Though there is a reference of capital account and

balance sheet regarding sundry creditors to the tune of

Rs.26 Lakhs, the same was not disclosed in his income

tax returns as admitted by him. Hence, the documents

of capital account and balance sheet now attached

along with Ex.P10 to Ex.P12 cannot be looked into.

19. As per Ex.P1, accused has advanced a total

sum of Rs.28 Lakhs and it spreads in two financial

years of 2004-05 and 2005-06, but the income tax

returns are silent regarding this aspect.

20. Apart from that, when the complainant had

consistently advanced huge loan from 17.12.2004

onwards and when the earlier loan was itself not

repaid, it is hard to accept his assertion that he went

on advancing the loan as per the request. When

complainant himself admits that Rs.28 Lakhs

advanced to the accused was not shown in income tax

returns, it is hard to accept his contention that he was

financially sound.

21. When a suggestion was made that the

complainant was not financially capable of paying such

a huge amount, he claims that he has paid it in a

phase manner and the total amount is Rs.28 Lakhs. It

is hard to accept his contention that he could advance

such a huge amount when his declared income is very

meager and less than Rs.1 Lakh per annum. Apart

from that, the complainant all along asserts that he

had got documents to show that he was possessing

such a huge amount, but he has not produced any

documents in this regard. Later on he produced Ex.13

and 14, but the same are OOD accounts and there

amount is transferred from one OOD to another OOD

and they were withdrawn by complainant himself.

Hence, the evidence of complainant regarding his

financial status is not established.

22. The accused has taken a defence that in

2005, one Vallabhshastry was introduced by accused

to the complainant and at that time, he took

Rs.2,50,000/- from complainant, Rs.37,500/- was

deducted towards interest and Rs.10,000/- was

charged as hundi amount and he was only paid

Rs.2,02,500/- and in this regard, two cheques of

Rs.1,25,000/- was given by him and another cheque

was taken as a security, which is misused. No doubt,

accused has not proved his defence to prove regarding

availment of Rs.2,02,500/-, but when he has disputed

the financial status of the complainant, it is for the

complainant to prove his financial status first, but

evidence does not substantiate the said aspect.

23. The complainant has asserted that in

respect of two cheques of Rs.1,25,000/-, the

complainant has got filed a complaint through on Raju

and said cases were dismissed. The dismissal of these

cases was undisputed and the same is evident from

Ex.D1 also.

24. Interestingly, all along, the complainant

asserted that his practice was for charity and he is

getting house rent of Rs.20,000/- to Rs.25,000/- per

month, but during the cross-examination of DW1 a

suggestion was made to the accused on behalf of the

complainant that the complainant is getting rent to the

tune of Rs.55,000/- to Rs.60,000/-. This suggestion is

contrary to the evidence given by complainant himself

who claims that his house income is only Rs.20,000/-

to Rs.25,000/-. Further, complainant asserts that till

January 2006, he received the interest at the rate of

18%. He did not disclose how much interest was paid

to him and in what way the interest was paid, whether

by way of cash or by way of cheque. Admittedly, the

complainant is not a money lender and he did not

possess money lender's licence. Under such

circumstances, he cannot charge 18% interest and that

itself discloses that the complainant is indulged in

money lending business illegally.

25. This fact is again corroborated by the

admission given by the complainant in his cross-

examination wherein he admitted that he has lodged a

criminal case in C.C.No.1205/2007 against one

Srinivas Narsimhan in II JMFC claiming that he is

required to receive 1,33,350 US Dollars. This is a huge

amount and if it is converted into Indian currency, it

runs into Crores. But the complainant has not shown

this amount in his income tax return also. Hence,

prima facie, it is borne out from the records that the

complainant has at first instance, failed to prove his

financial capacity to advance the loan of Rs.28 Lakhs

and it is also evident that he is indulged in finance

business illegally in order to have an unlawful gain.

26. The learned counsel for the revision

petitioner has placed reliance on an unreported

decision of this court in CRL.R.P.NO.1252/2019

DATED 11.08.2023, (CHIKKANNA VS. SRINIVASA)

wherein it is observed that when the financial status is

disputed and it is shown that the complainant has no

financial capacity to advance huge loan, the

presumption under Section 139 of the N.I.Act is not

applicable. In the instant case also, though the

accused has admitted the signature on the cheque, it is

evident that the cheque was not towards legally

enforceable debt. A similar view was taken in

CRL.R.P.NO.100141/2021 DATED 13.12.2022

(GOPALKRISHNAMURTHY V. M VENKATESH) by this

court. In support of the said contention, learned

counsel for the revision petitioner has relied on a

decision in CRL.A.NO.112/2012 OF THIS COURT

DATED 12.08.2022 (JAGADISH V. H.V.PRABHAKAR),

CRL.R.P.NO.391/2014 DATED 21.02.2022

(LAKSHMANAMURTHY R V. UMASHANKAR), and

CRL.R.P.1012/2012 DATED 20.01.2022 (SHIVANNA

VS. NAGARAJA GOWDA). The principles enunciated in

the above cited decisions establish that when the

accused is able to prove that the complainant has no

financial capacity, then the presumption stands

rebutted and the complainant is required to prove

regarding his financial status.

27. The learned counsel for the revision

petitioner on this point has also placed reliance on the

recent decision of Hon'ble Apex Court in 'RAJARAM

VS. MARUTHACHALAM', 2023 SCC ONLINE SC 23.

On this point only, he has further placed reliance on

decision of Hon'ble Apex Court in 'M.S.NARAYAN

MENON VS. STATE OF KERALA AND ANOTHER',

(2006) 6 SCC 39, 'KAMALA S. V. VIDHYANDHARAN

M J., (2007) 5 SCC 264, 'RANGAPPA VS.

SRI.MOHAN', (2010) 11 SCC 441, 'M K

JEEVANDHAR VS. MARGARET MANENZES', 2012

SCC ONLINE KAR 8, 'K.NARAYAN NAYAK VS.

M.SHIVARAMA SHETTY', ILR 2008 KAR 3635.

28. Further, in the decision reported in

RAJARAM supra, the Hon'ble Apex Court had an

occasion to deal with the submission of the income tax

returns also and in para No.28 to 34, the Hon'ble Apex

Court has considered the relevancy of income tax

returns submitted. In the present case also, the income

tax returns submitted by the accused does not

establish his income as asserted by him. Further, the

evidence of DW2 clearly discloses that the capital

account and balance sheet annexed to Ex.P11 and

Ex.P12 are not submitted to the Income Tax

department and the author of these statements was

also not examined. Hence, these capital statements

cannot be a ground and admission of complainant /

PW1 itself discloses that he has not shown

advancement of loan of Rs.28 Lakhs to the accused in

his income tax returns. In view of these aspects, it is

hard to accept his contention that he has advanced a

loan of Rs.28 Lakhs, when his declared income itself is

less than Rs.1 Lakh for the relevant period. Hence, the

presumption available under Section 139 of the N.I.Act

in favour of the complainant stands rebutted. The

complainant has failed to prove his financial status.

29. Both the courts below have not appreciated

the oral and documentary evidence in its proper

perspective especially with reference to Ex.P10 to

Ex.P12 i.e., the income tax returns and admissions

given by complainant regarding not referring this

transaction in his income tax returns. Further the

courts below have also ignored the fact that he has

charged interest at the rate of 18% and claimed to have

received it and hence, it is evident that he is doing

money lending business without having any licence. In

that event also, the amount cannot be said to be a

legally enforceable debt. When complainant in his

evidence asserts that he has got sufficient means and

he possess documents to show his income and when

he fails to do so, the adverse inference is required to be

drawn against him under Section 114 of Indian

Evidence Act, 1872. The courts below did not

appreciate any of these aspects and in a mechanical

way that the cheque belongs to accused and it bears

the signature of the accused, proceeded to convict the

accused, which has resulted in miscarriage of justice.

Though the accused has failed to prove his defence

conclusively, but considering the cross-examination, he

has probablized his defence and the complainant has

not been able to establish his case.

30. Considering these facts and circumstances,

it is evident that the judgment of conviction and order

of sentence passed by both the courts below is perverse

and arbitrary; hence, it calls interference by this court.

Considering these facts, the point under consideration

is required to be answered in the affirmative and

hence, the petition needs to be allowed. Accordingly, I

proceed to pass the following:

ORDER

(i) The revision petition is allowed.

(ii) The impugned judgment of conviction and order of sentence passed V Additional Civil Judge and JMFC, Mysore in C.C.No.3047/2008 and confirmed in Crl.A.No.12/2014 by I Additional Sessions Judge, Mysore vide judgment dated 06.02.2016 are set aside.

(iii) The accused stands acquitted for the offence under Section 138 of the N.I.Act and he is set at liberty.

     (iv)    The bail bonds executed by him
             stand cancelled.
     (v)     The amount in deposit made by the

revision petitioner / accused shall be refunded to him.

Sd/-

JUDGE

SS