Karnataka High Court

Sri P Rajashekar vs Smt Fransina R on 7 February, 2024

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                                              CRL.A. No. 52 of 2014


IN THE HIGH COURT OF KARNATAKA AT BENGALURU

     DATED THIS THE 7TH DAY OF FEBRUARY, 2024

                              BEFORE
         THE HON'BLE MR JUSTICE ANIL B KATTI
             CRIMINAL APPEAL No.52 OF 2014 (A)
BETWEEN:

SRI. P.RAJASHEKAR
S/O. PAPAIAH,
AGED ABOUT 53 YEARS,
R/AT NO.202, 9TH CROSS,
GOKULAM 3RD STAGE,
MYSORE-570 016
                                                          ...APPELLANT
(BY SRI. ANAND K., ADVOCATE)

AND:

SMT. FRANSINA R.
W/O.RAVI JANARDAN
AGED ABOUT 41 YEARS
RE/AT NO.215/4C, 11TH MAIN,
MAHADESHWARA EXTENSION,
MYSORE-570 016.
                                                         ...RESPONDENT
(BY SRI. K.A.CHANDRASHEKAR, ADVOCATE)

       THIS APPEAL IS FILED UNDER SECTION 378(4) CR.P.C,
PRAYING TO SET ASIDE THE ORDER DATED 9.12.2013 PASSED
BY     THE   IV   ADDL.   I   C.J.     AND   J.M.F.V.,    MYSORE   IN
C.C.NO.1701/2011- ACQUITTING THE RESPONDENT/ACCUSED
FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.
ACT.

       THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
16.01.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
                                  -2-
                                            CRL.A. No. 52 of 2014


                           JUDGMENT

Appellant/complainant feeling aggrieved by judgment

of Trial Court on the file of IV Additional I Civil Judge and

JMFC, Mysore, in C.C.NO.1701/2011 dated 09.12.2013

preferred this appeal.

2. Parties to the appeal are referred with their ranks as

assigned in the Trial Court for the sake of convenience.

3. Heard the arguments of both sides.

4. After hearing arguments of both sides and on

perusal of Trial Court records, the following points arise for

consideration:

1) Whether the impugned judgment under appeal passed by Trial Court for the offence punishable under Section 138 of N.I.Act is perverse, capricious and legally not sustainable?

2) Whether interference of this Court is required?

5. On careful perusal of oral and documentary evidence

placed on record, it would go to show that daughter of

complainant R Monisha is studying in St.Josephs School,

Jayalakshmipuram, Mysore and the mother of accused

Smt. Mary is the teacher in the same school where

daughter of complainant is studying. Accused being

daughter of Smt. Mary, teacher, developed acquaintance

with complainant and thereby as both accused and

complainant were known to each other. On 15.12.2009,

accused borrowed loan of Rs.2,00,000/- from the

complainant for her legal necessities i.e. for admission of

her children to St.Josephs Public School, CBSC I standard

at Vijayanagar, Mysore, agreeing to pay the loan with

interest at 18% p.a. and return the amount within 6

months from the date of borrowing. Accused has also

executed "On demand promissory note and consideration

receipt" in favour of complainant dated 15.12.2009.

Accused did not pay the interest as agreed. On 1.6.2010

after re-opening of the school, complainant approached

the accused and demanded to pay the entire principal

amount of Rs.2,00,000/- and upto date interest. Accused

instead of paying the entire amount, has paid only

Rs.10,000/- cash and for balance amount of Rs.1,90,000/-

issued post dated cheque bearing No.343025 dated

20.11.2010 drawn on South Indian Bank, St. Josephs

School Branch, Jayalakshmipuram, Mysore. Complainant

presented the said cheque through his banker, State Bank

of Mysore, Gokulam Branch, Mysore on 20.11.2010 Ex.P.3

and the same was dishonoured vide Bank endorsement

dated 23.11.2010 Ex.P.2 as "insufficient fund".

Complainant issued demand notice dated 06.12.2010

Ex.P.4 through "RPAD" and also through "Under certificate

of Posting". The RPAD receipt is produced at Ex.P.5 and

"UCP" receipt at Ex.P.6. Demand notice sent through

RPAD is duly served to the accused on 09.12.2010 vide

acknowledgement card Ex.P.7. On demand promissory

note and consideration receipt contained in the same page

are produced at Exs.P.8 and P.9. Accused in spite of due

service of demand notice has neither replied to the

demand notice nor paid the amount covered under the

cheque. Therefore, complainant has filed the complainant

on 19.01.2011. If the above referred documents are

perused and appreciated with the oral testimony of PW.1,

then it would go to show that the complainant has

complied with the necessary legal requirements in terms

of Section 138(a) to (c) of Negotiable Instruments, Act,

1881 (hereinafter for brevity referred to as "N.I.Act").

Complainant within one month from the date of accrual of

cause of action, has filed complaint on 19.01.2011 in

terms of Section 142(1)(b) of N.I.Act. When the

complainant has produced requisite evidence to prove that

Ex.P.1 cheque was issued by accused for lawful discharge

of debt and the same was dishonoured for want of

sufficient funds in the account of accused so also complied

the legal requirements, then statutory presumption in

terms of Section 118 and 139 of the N.I. Act will have to

be drawn in favour of the complainant.

6. In this context of the matter, it is useful to refer the

judgment of Hon'ble Apex Court in APS Forex Services

Pvt. Ltd. Vs. Shakti International Fashion Linkers

and others reported in AIR 2020 SC 945, wherein it has

been observed and held that once the issuance of cheque

with signature on cheque is admitted, there is always a

presumption in favour of complainant that there exist

legally enforceable debt or liability. Plea by accused that

cheque was given by way of security and same has been

misused by complainant is not tenable.

It also profitable to refer another judgment of Hon'ble

Apex Court in P. Rasiya vs. Abdul Nazer and another

reported in 2022 SCC OnLine SC 1131, wherein it has

been observed and held that:-

" Once the initial burden is discharged by the complainant that the cheque was issued by the accused and signature of accused on the cheque is not disputed, then in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for discharge of any debt or other liability. The presumption under Section 139 of N.I. Act is statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant/holder of the cheque, in that case it is for the accused to prove the contrary."

In view of the principles enunciated in the

aforementioned two judgments of Hon'ble Apex Court, it is

evident that when once issuance of cheque with signature

of accused on the account maintained by him is admitted

or proved then statutory presumption in terms of Section

118 and 139 of N.I. Act will have to be drawn.

7. It is now up to the accused to place rebuttal evidence to

displace the statutory presumption available in favour of

the complainant. In this context of the matter, learned

counsel for the appellant/complainant has relied on the

judgment of Hon'ble Apex Court in Tedhi Singh Vs.

Narayan Dass Mahant reported in (2022) 6 SCC 435

wherein it has been observed and held in paragraph 9 of

the judgment as under :

"9. xxxx The proceedings under Section 138 of the N.I. Act is not a civil suit. At the time, when the complaint gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent the Courts in our view were right in holding on those lines."

In view of the principles enunciated in this judgment,

the complainant was not expected to initially lead evidence

that he had the financial capacity. The defence of accused

in challenging the financial capacity was not known to the

complainant and as such, the complainant was not

expected to give evidence of his financial capacity when he

led his evidence. However, in the very same paragraph,

the Hon'ble Apex Court has further held as under :

"However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.

The Hon'ble Apex Court has held that though accused

has not replied to the demand notice, the accused has the

right to challenge the financial capacity during the cross-

examination of PW.1 and the witnesses relied by the

complainant. Therefore, it is open for the accused to

challenge the financial capacity of complainant in giving

loan amount covered under Ex.P.1.

8. In the present case accused in spite of due service of

demand notice Ex.P.4 vide acknowledgement card Ex.P.7

has not chosen to reply to the demand notice and thus has

failed to avail the first available opportunity to put forth

her defence to the claim of complainant that Ex.P.1

cheque was issued for lawful discharge of debt. Accused

during the cross-examination of PW.1 also has not made

out any specific defence as to how complainant came in

possession of cheque Ex.P.1 duly signed by accused on the

account maintained by her in South Indian Bank. The

tenor of cross-examination only goes to show that accused

has challenged the financial capacity of the complainant in

giving hand loan of Rs.2,00,000/- to the accused.

9. It is the specific evidence of complainant PW.1 that on

15.12.2009, accused availed loan of Rs.2,00,000/- for

getting admission of her children to St. Joseph Public

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School, CBSC I standard at Mysore by executing on

demand promissory note and consideration receipt dated

15.12.2009 vide Exs.P.8 and P.9. The complaint

averments and the evidence of PW.1 to the effect that the

daughter of complainant R.Monisha is studying in

St.Josephs school and the mother of accused is working as

a teacher in said school. Accused through her mother was

known to the complainant and she approached him for

loan of Rs.2,00,000/- for getting admission of her children

to the very same school St. Joseph Public School, CBSC I

standard at Vijayanagar, Mysore. The said fact has not

been denied by the accused during the cross-examination

of PW.1. In the entire cross-examination of PW.1, accused

has not denied execution of on demand promissory note

and consideration receipt Exs.P.8 and P.9.

10. It is the contention of accused in the cross-

examination of PW.1. that the writings in cheque Ex.P.1 is

not that of accused and the same also differs with the

signature of accused, since the ink used in writing the

other particulars of cheque Ex.P.1 and the ink of signature

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are different. The learned counsel for the appellant relied

on the judgment of Hon'ble Apex court in Bir Singh vs.

Mukesh Kumar reported in (2019) 4 SCC 197 wherein

it has been observed and held as under :

"A meaningful reading of the provision of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. The fact that the cheque might be post-dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Act. Further, it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. If the cheque is otherwise valid, the penal provisions of

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Section 138 would be attracted. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."

In view of the principles enunciated in this decision, even

if the contention of accused is to be accepted that writing

particulars of cheque Ex.P.1 is not that of her, then also

accused cannot escape from the penal action in terms of

Section 138 of the N.I. Act.

11. Learned counsel for the appellant also placed reliance

on the judgment of the Hon'ble Apex Court in Rangappa

Vs. Mohan reported in AIR 2010 SC 1898 wherein it

has been observed and held as under :

"xxxx The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either

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believe that the consideration did not exist or its non-existence was to probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist."

(Emphasis supplied)

In view of the principles enunciated in this judgment

of Hon'ble Apex Court and also in terms of the Section

118(a) of the N.I. Act, the passing of consideration has to

be presumed in favour of the holder in due course, unless

the contrary is proved by accused. In the present case,

accused other than the bare denial of passing of

consideration has not brought any material evidence on

record to discredit the evidence of PW.1 and the issuance

of cheque Ex.P.1 for lawful discharge of debt. Therefore,

passing of consideration under Ex.P.1 in terms of Section

118(a) of N.I. Act will have to be presumed.

12. Accused has challenged the financial capacity of the

complainant to pay the loan amount of Rs.2,00,000/- as

pleaded in the complaint. In support of such contention,

reliance is placed on the judgment of the Hon'ble Apex

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Court in K.Subramani Vs. K.Damodaranaidu reported

in (2015) 1 SCC 99 wherein it has been observed and

held that :

"Ss.138, 118 and 139- Dishonour of cheque- Legally recoverable debt not proved as complaint could not prove source of income from which alleged loan was made to appellant- accused- Presumption in favour of holder of cheque, hence, held, stood rebutted."

The Hon'ble Apex Court having so observed has

restored the judgment of acquittal passed by the Trial

Court.

13. Complainant claims that he is doing business and has

got source of income. The said fact stated in examination-

in-chief has not been challenged by the accused in cross-

examination of PW.1. It is not disputed that daughter of

complainant R Monisha is studying in the very same

St.Joseph's School, Jayalakshmipuram, Mysore and in

which school itself, the accused wanted to get her children

admitted and for that purpose, she availed the loan of

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Rs.2,00,000/-. It means that accused admits that

complainant must have spent the same amount for getting

admitted his daughter R Monisha in the very same school.

It is not necessary for the complainant to place documents

that he possessed that much of amount when the loan was

given. Looking to the evidence on record, it would go to

show that complainant is capable of generating amount of

Rs.2,00,000/- for giving loan to the accused.

14. Learned counsel for the complainant has invited

attention of this Court to the memo filed by accused

herself dated 20.04.2013 after appearance in this case.

The memo dated 20.4.2013 is taken on record and the

same is evidenced in the proceedings recorded in the

order sheet on 20.04.2013, whereunder accused had

undertaken to make part payment on the next date. This

filing of memo with the signature of accused has never

been challenged by the accused during trial before the

Court. Therefore, the accused now cannot go back and

say that she has not received any amount recovered under

cheque Ex.P.1 and the same was not issued for lawful

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discharge of debt. Therefore, the evidence of accused as

DW.1 cannot be accepted as sufficient rebuttal evidence to

displace the statutory presumption available in favour of

complainant in terms of Section 118 and 139 of the N.I.

Act.

15. The Trial Court without properly appreciating the

above referred evidence on record mechanically believed

the evidence of DW.1 and the suggestion put to PW.1

which has been denied by the witness as rebuttal evidence

to displace the statutory presumption available in favour of

complainant. When the accused has failed to probabalise

her defence by virtue of evidence placed on record, then

statutory presumption in favour of complainant in terms of

Section 118 and 139 of N.I. Act continues to operate.

Therefore, the Trial Court was not justified in acquitting

the accused for the offence under Section 138 of N.I. Act

which has been duly proved by the complainant out of the

material evidence placed on record.

16. Now remains the question of imposition of sentence.

The Court while imposing sentence will have to keep in

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mind the nature of offence committed by accused,

material evidence placed on record, circumstances under

which loan was availed by accused and the other attending

circumstances leading to the issuance of cheque Ex.P.1 for

lawful discharge of debt. If the said things are kept in

mind and the evidence on record is appreciated with

regard to the facts and circumstances of the case, then if

the accused is sentenced to pay a fine of Rs.2,00,000/-

and in default of payment of fine to undergo S.I. for 3

months is ordered, will meet the ends of justice.

Consequently, proceed to pass the following :

ORDER

The appeal filed by the appellant/complainant is

hereby allowed.

The judgment of the Trial Court on the file of IV

Additional I Civil Judge and JMFC, Mysore, in

C.C.NO.1701/2011 dated 09.12.2013 is hereby set aside.