Karnataka High Court
Mr. Mallikarjuna S.E vs Mr. Murali.M on 20 September, 2023
Bench: S Rachaiah
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CRL.RP No. 1020 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF SEPTEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE S RACHAIAH
CRIMINAL REVISION PETITION NO. 1020 OF 2019
BETWEEN:
MR. MALLIKARJUNA S E
S/O. MR. EREGOWDA
AGED ABOUT 52 YEARS
RESIDING AT: No.3, 2ND CROSS
2ND MAIN, BILWAPATRE MAIN ROAD
BYRAVESHWARA NAGAR, LAGGERE
Digitally signed
by N UMA BENGALURU - 560 079.
Location: HIGH ...PETITIONER
COURT OF
KARNATAKA (BY SRI. PRASANNA D P, ADVOCATE)
AND:
MR. MURALI.M
S/O. SRI. M. MANI
AGED ABOUT 45 YEARS
RESIDING AT : NO.490, 2ND STAGE
4TH MAIN ROAD, MANJUNATH NAGAR
BANGALORE - 560 010.
...RESPONDENT
(BY SRI SHIVAKUMAR, ADVOCATE)
THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C,
PRAYING TO SET ASIDE THE JUDGMENT AND SENTENCE WITH
FINE PASSED BY THE LX ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE BENGALURU (CCH-61) IN
CRL.A.NO.538/2017 DATED 20.07.2019 AND JUDGMENT AND
CONVICTION PASSED BY THE XXII ACMM, BENGALURU IN
C.C.NO.27012/2015 DATED 21.03.2017, FOR THE OFFENCE
UNDER SECTION 138 OF N.I. ACT AND ETC.,
THIS CRIMINAL REVISION PETITION, COMING ON FOR
FURTHER HEARING, THIS DAY, THE COURT MADE THE
FOLLOWING:
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ORDER
1. This Criminal Revision Petition is filed by the
petitioner, being aggrieved by the judgment of conviction and
order of sentence dated 21.03.2017 in C.C.No.27012/2015 on
the file of the Court of XXII Additional Chief Metropolitan
Magistrate, Bangalore City and its confirmation judgment and
order dated 20.07.2019 in Crl.A.No.538/2017 on the file of the
Court of LX Additional City Civil and Sessions Judge, Bengaluru
(CCH-61) has filed this revision petition seeking to set aside the
concurrent findings recorded by the Courts below, wherein the
petitioner / accused was convicted for the offence punishable
under Section 138 of the Negotiable Instruments Act, 1881 (for
short 'N.I Act').
2. The petitioner is the accused before the Trial Court
and the appellant before the Appellate Court.
Brief facts of the case are as under:
3. It is the case of the complainant that, the petitioner
and the respondent were friends. The respondent along with
one Sri.Kempegowda, Sri.Jaikar entered into an agreement of
sale dated 01.03.2013 with one Sri.G.Srinivasa in respect of
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property Sy.No.9/2, Machohalli Village, Dasanapura Hobli,
Bengaluru North Taluk (as per Ex.P6). It is further stated that
the petitioner being one of the purchasers was short of funds,
therefore, it is stated that the respondent stated to have
funded an amount of Rs.15,00,000/- at the time of agreement
of sale. It was agreed that the said amount would be repaid
after the development and sale of the said property. The
accused / petitioner stated to have issued a post-dated cheque
dated 25.08.2015 to the complainant. It is stated that the said
cheque was presented on 09.10.2015 for encashment,
however, it was dishonoured for the reason 'funds insufficient'.
After the issuance of the notice, a complaint came to be filed
before the Magistrate having jurisdiction.
4. To prove the case of the complainant, the
complainant examined himself as PW.1 and marked 26
documents as Exhibits P1 to P26 and also examined the other
three witnesses as PWs.2 to 4. On the other hand, the
petitioner examined himself as DW.1 and got marked 7
documents as Exs.D1 to D7. The Trial Court after appreciating
the oral and documentary evidence on record convicted the
petitioner for the offence stated supra. Being aggrieved by the
same, the petitioner preferred an appeal before the Appellate
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Court, the Appellate Court allowed the appeal in part by
confirming the judgment of conviction rendered by the Trial
Court, however, the Appellate Court modified the order of
sentence and sentenced the accused to pay a fine of
Rs.15,05,000/-. Being aggrieved by the same, the petitioner
has preferred this revision petition seeking to set aside the
concurrent findings.
5. Heard Shri Prasanna D P, learned counsel for the
petitioner, and Shri N Shivakumar, learned counsel for the
respondent.
6. It is the submission of the learned counsel for the
petitioner that, the Courts below failed to consider the
contradiction and omission and passed the impugned
judgments, which are opposed to the facts and evidence on
record, hence the same is liable to be set aside.
7. It is the contention of the learned counsel for the
petitioner that, the petitioner used to purchase cement and
other items from one Sri.Prakash who was running a shop
namely S.L.N.Traders situated at Srirampuram, Bengaluru -
560 021. It is further stated that, after the petitioner came to
know that, the said cheque was misused by the respondent, he
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immediately, sent a legal notice to said Prakash asking him to
return the said cheque.
8. It is further contended that the petitioner has
substantiated that, he has not borrowed a loan from the
respondent as stated in the cheque and also the respondent
has not proved that there is a legally enforceable debt or
liability. In spite of not proving the case by the respondent, the
Trial Court and the Appellate Court grossly erred in holding
that, the petitioner found guilty of the offence under Section
138 of the NI Act is erroneous and illegal and the same is liable
to be set aside. Making such a submission, the learned counsel
for the petitioner prays to allow the petition.
9. Per contra, the learned counsel for the respondent
justifying the concurrent findings of conviction and submits that
the cheque belongs to the petitioner and the petitioner
admitted his signature, however, he has denied the transaction.
Mere denial of the transaction would not enure the benefit of
rebuttable presumption to the petitioner in any way. To rebut
the presumption, the petitioner has to raise a probable defence
that is believable and acceptable.
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10. It is further submitted that the petitioner even
though denied acquaintance with the respondent, in the cross-
examination, has admitted that the respondent and other two
partners including the petitioner entered into an agreement of
sale to purchase the property of Sri.G.Srinivasa. After the
formation of the layout, they have sold the sites to the
prospective purchasers.
11. It is further submitted that, even though the
petitioner contended that, the cheque was issued to one
Sri.Prakash, has not established how the said cheque was given
to the respondent by said Sri.Prakash. The petitioner neither
examined Sri.Prakash nor produced any document to show
that, the cheque had been issued to some other person other
than the respondent. Therefore, the Trial Court after
considering the oral and documentary evidence on record
opined that the petitioner was found guilty of the offence under
Section 138 of the NI Act. The findings recorded by the Courts
below appear to be appropriate and correct, interference with
the well-reasoned order may not be warranted. Having
submitted thus, the learned counsel for the respondent prays to
dismiss the petition.
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12. Having heard the rival contentions urged by the
learned counsels for the respective parties and also perused the
documents available on record, the findings of the Courts below
in recording the conviction, the points which arise for my
consideration are:
i) Whether the concurrent findings recorded by
both the Courts below in convicting the petitioner
for the offence under Section 138 of N.I. Act are
sustainable?
ii) Whether the petitioner has made grounds to
interfere with the concurrent findings recorded by
both the Courts below for conviction?
13. This Court being a Revisional Court, having regard
to the scope and ambit envisaged to appreciate the facts and
law, it is necessary to have a cursory look upon the evidence
and also the law, to ascertain as to whether any illegality or
perversity or error committed by the Courts below in recording
the conviction.
14. Before adverting to the facts of the case, it is
relevant to refer to the dictum of the Hon'ble Supreme Court in
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the case of BIR SINGH v. MUKESH KUMAR1, paragraphs
No.18 to 24 read thus:
"18. In passing the impugned judgment and
order dated 21-11-2017, the High Court
misconstrued Section 139 of the Negotiable
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.
19. In Hiten P. Dalal v. Bratindranath
Banerjee, this Court held that both Sections
138 and 139 require that the court shall
presume the liability of the drawer of the
cheques for the amounts for which the
cheques are drawn. Following the judgment
of this Court in State of Madras v. A.
Vaidyanatha Iyer, this Court held that it was
obligatory on the court to raise this
presumption.
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
(2019) 4 SCC 197
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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.
21. Presumption of innocence is
undoubtedly a human right as contended on
behalf of the respondent-accused, relying on
the judgments of this Court in Ranjitsing
Brahmajeetsing Sharma v. State of
Maharashtra and Rajesh Ranjan Yadav v. CBI.
However the guilt may be established by
recourse to presumptions in law and
presumptions in facts, as observed above.
22. In Laxmi Dyechem v. State of
Gujarat, this Court reiterated that in view of
Section 139, it has to be presumed that a
cheque was issued in discharge of a debt or
other liability but the presumption could be
rebutted by adducing evidence. The burden of
proof was however on the person who wanted
to rebut the presumption. This Court held
"however, this presumption coupled with the
object of Chapter XVII of the Act leads to the
conclusion that by countermanding payment
of a post-dated cheque, a party should not be
allowed to get away from the penal provision
of Section 138 of the Act".
23. In Kumar Exports v. Sharma
Carpets, this Court reiterated that there is a
presumption that every negotiable instrument
duly executed, is for discharge of a debt or
liability, but the presumption is rebuttable by
proving the contrary. In the facts and
circumstances of the case it was found that
the cheque in question was towards advance
for purchase of carpets, which were in fact
not sold by the payee of the cheque to the
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drawer, as proved from the deposition of an
official of the Sales Tax Department, who
stated that the payee had admitted that he
had not sold the carpets.
24. In K.N. Beena v. Muniyappan, this
Court held that in view of the provisions 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 careful reading of the judgment of the Hon'ble
Supreme Court it makes it clear that Section 139 of the N.I Act
mandates presumption unless the contrary is proved. It is to
be presumed that the holder of the 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. However, the
said presumption is rebuttable in nature. It is needless to say
that Section 139 of the NI Act introduces an exception to the
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general rule as to the burden of proof and shifts the onus on
the accused to prove by cogent evidence that there was no
debt or liability. Mere denial or rebuttable by the accused was
not enough.
16. Now it is relevant to refer the defence of the
accused by considering the dictum of the Hon'ble Supreme
Court. The accused in the cross-examination of PW.1
contended that he had not received the amount as stated by
PW.1. When a specific question was put to PW.1 in the cross-
examination regarding the mode of payment of the amount as
stated in the cheque, PW.1 asserted that on 01.03.2013 he
paid Rs.15.00 lakhs at once. However, further PW.1 stated
that Rs.10.00 lakhs was paid by way of cash and Rs.5.00 lakhs
was paid through cheque. In order to substantiate the amount
of Rs.15.00 lakhs paid to the accused, PW.1 produced Ex.P7
which is his bank statement. PW.1 says that as per Ex.P7(b)
he had issued a cheque to the accused. When a specific
question was put to PW.1 that it was not credited to the
account of the accused, he replied that he did not know.
However, the amount which PW.1 stated to have issued
through cheque to the accused, was credited to the account of
Sri.Srinivas who was the vendor of the property wherein the
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complainant, the accused and two others have purchased the
immovable property for the purpose of forming the layout.
17. PW.1 examined the other three witnesses PWs.2 to
4, and they did not support regarding payment of the amount
of Rs.15.00 lakhs to the accused. As far as the evidence of
accused/DW.1 is concerned, the accused contended that on
receipt of summons from the Court, he is stated to have issued
notice to Sri.Prakash who was running a shop namely Sri S.L.N
Traders, situated behind Devaiah Park, Bengaluru where DW.1
used to purchase cement and other items. In the said notice,
DW.1 asked Sri.Prakash to return the cheque which was given
as security. However, the said notice was not received by
Sri.Prakash.
18. On careful reading of the evidence of DW.1, it
appears that he has rebutted the presumption by adducing the
cogent evidence that notice was issued to Sri.Prakash regarding
the return of the cheque after receipt of summons from the
Court. It is noted here that, the notice issued to DW.1
regarding the dishonour of the cheque was returned to PW.1 as
"addressee refused". When DW.1 cross-examined PWs.2, 3
and 4 and elicited that the amount of Rs.15.00 lakhs was not
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paid to DW.1, the burden would be shifted to PW.1 to prove
that he had lent the amount of Rs.15.00 lakhs to DW.1. In the
present case, PW.1 even though stated that amount of
Rs.10.00 lakhs was paid by way of cash and Rs.5.00 lakhs was
paid through cheque, PW.1 failed to prove the said transaction
despite he examined three witnesses on his behalf. PW.1 has
not produced any bank statements or any other documents to
show that the amount of Rs.5.00 lakhs was credited to the
account of DW.1. Therefore, PW.1 failed to prove that there
exists legally enforceable debt or liability. However, the Trial
Court and the Appellate Court failed to appreciate the said
aspect in this manner and recorded the conviction which is
erroneous and illegal. Even though the Revisional Court not
opted to appreciate the evidence, however, when there is
patent error is noticed, in recording the conviction, the
Revisional Court can interfere with the facts and also the law in
order to secure the ends of justice.
19. In the light of the observations made above, the
points that arose for my consideration are answered as under:-
Point No.(i) - "Negative"
Point No.(ii) - "Affirmative"
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20. Hence, I proceed to pass the following:-
ORDER
(i) The Criminal Revision Petition is allowed.
(ii) The judgment of conviction and order of
sentence dated 21.03.2017 passed in
C.C.NO.27012/2015 by the Court of XXII
Additional Chief Metropolitan Magistrate,
Bangalore City and the judgment and order
dated 20.07.2019 passed in Crl.A.No.538/2017
by the Court of LX Additional City Civil and
Sessions Judge, Bengaluru (CCH-61), are set
aside.
(iii) The petitioner is acquitted for the offence under
Section 138 of the N.I Act.
(iv) Bail bonds executed, if any, stand cancelled.
Sd/-
JUDGE
UN
