Karnataka High Court
Smt T R Radhamma vs Sri Munigowda on 9 February, 2024
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CRL.A.No.824 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 09TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE ANIL B KATTI
CRIMINAL APPEAL No.824 OF 2014 (A)
BETWEEN:
SMT.T.R.RADHAMMA
W/O.LATE T.K.DASS RAJ URS
AGED ABOUT 55 YEARS
OCCUPATION: GOVT. SERVANT
R/AT NO.6, GROUND FLOOR
BYRAVESHWARA NILAYA
1ST CROSS, MARUTHI LAYOUT
DASARAHALLI
BANGALORE-560 024.
...APPELLANT
Digitally signed (BY SRI.M.R.BALAKRISHNA, ADVOCATE)
by SUMITHRA
R
Location: HIGH AND:
COURT OF
KARNATAKA
SRI.MUNIGOWDA
FATHER'S NAME NOT KNOWN
AGED ABOUT 48 YEARS
OCCUPATION: PEON
OFFICE OF THE ASST. EXECUTIVE ENGINEER
NO.4, IRRIGATION INVESTIGATION
SUB- DIVISION, 2ND FLOOR,
SWDC BUILDING, ANANDA RAO CIRCLE,
BANGALORE-560 009
...RESPONDENT
(BY SRI.VISHRUTH B.R., ADVOCATE FOR
SRI.P.BASAVARAJU, ADVOCATE)
THIS APPEAL FILED U/S.378 (4) CR.P.C, PRAYING TO SET
ASIDE THE ORDER DATED: 8.9.14 PASSED BY THE XV ADDL.
C.M.M., BANGALORE IN C.C.NO.13744/2011- ACQUITTING THE
RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I.
ACT.
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CRL.A.No.824 of 2014
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
30.01.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
JUDGMENT
Appellant/complainant feeling aggrieved by judgment
of Trial Court on the file of XV ACMM, Bengaluru in
C.C.No.13744/2011, dated 08.09.2014 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, so also the impugned
judgment under appeal, the following points arise for
consideration:
1) Whether the impugned judgment under
appeal 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
complainant and accused are colleagues working in the
same department for the last ten years. Accused to meet
out his financial crises approached complainant for hand
loan of Rs.1,00,000/- in the month of September 2010.
Complainant has paid the said amount to accused and
agreed to repay the same on or before 22.03.2011.
Accused has issued post dated cheque bearing No.903181
Ex.P.1 dated 22.03.2011 drawn on Corporation bank
S.C.Road branch, Bengaluru for lawful discharge of debt.
Complainant presented the said cheque for collection
through his banker and the same was dishonoured for
want of sufficient funds in the account of accused vide
bank endorsement Ex.P.2. Complainant issued demand
notice dated 24.03.2011 Ex.P.3. The same is duly served
to accused vide acknowledgement card Ex.P.4. Accused
has neither replied to the said notice nor paid the amount
covered under cheque. Therefore, complainant filed
complaint on 13.04.2011. If the aforementioned
documents are perused and appreciated with the oral
testimony of PW.1, then it would go to show that
complainant has complied all 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 has filed complaint
on 13.04.2011 within a period of one month from the date
of accrual of cause of action in terms of Section 142(1)(b)
of N.I.Act. Therefore, statutory presumption will have to
be drawn in favour of complainant in terms of Section 118
and 139 of N.I.Act.
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 view of security and
same has been misused by complainant is not tenable.
7. It is 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.
8. It is now up to the accused to place rebuttal
evidence to displace statutory presumption available in
favour of complainant. In the present case accused apart
from relying on the material evidence produced by
complainant also relied on his own evidence as DW.1 and
the documents Ex.D.1 to Ex.D.12. Whether, the said
rebuttal evidence placed on record by accused is sufficient
to displace the statutory presumption available in favour of
complainant or not has to be decided.
9. Learned counsel for complainant in support of
his contention that failure of accused to reply to statutory
notice inference can be drawn that there was merit in the
complainant version relied on the judgment of Hon'ble
Apex Court in Rangappa Vs. Mohan reported in 2010
AIR SCW 2946, wherein it has been observed and held in
para 15 as under:
" A perusal of the trial record also shows that
the accused appeared to be aware of the fact that
the cheque was with the complainant. Further
more, the very fact that accused had failed to reply
to the statutory notice under Section 138 of the
N.I.Act leads to the inference that there was merit
with the complainant's version".
Learned counsel for complainant relied on the
judgment Hon'ble Bombay High Court in Yogendra
Bhagatram Sachdev Vs. State of Maharashtra and
another reported in III(2003) CCR 216, wherein it has
been observed and held that:
"The failure of accused to reply to this 138 notice
not being explained would raise a presumption that the
accused had, in fact, no defence whatsoever".
Learned counsel for complainant also placed reliance
on the judgment of Hon'ble Apex Court in Tedhi Singh
vs. Narayan Dass Mahant reported in 2022 Live Law
(SC) 275, para 9:
"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.
10. Accused/DW.1 has deposed to the effect that
for the last 12 years he knows the complainant, since both
of them were working in the same department at different
places. He has further deposed that in the month of
January 2010 he has made money transaction with
complainant and taken loan of Rs.40,000/-. Accused has
issued blank signed cheque as a security for the said
amount. Accused admitted his signature on Ex.P.1 and
denies the contents are written by him. DW.1 further
deposed to the effect that he did not know reading and
writing English language and he has not taken hand loan
of Rs.1,00,000/- from complainant. The demand notice of
complainant is not served to him, he has further deposed
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to the effect that his daughter died on 31.07.2010 and
produced death certificate Ex.D.1. On account of death of
his daughter, he could not attend to his duty for about two
months and never met the complainant in the month of
September 2010. Complainant has also made several
money transaction with others who are working in the
same department and doing unauthorized money lending
business. DW.1 also produced Exs.D.2 to 12 which are
related to C.C.No.17314/2013. It has been elicited in the
cross-examination of DW.1 that he has not filed any
complaint against complainant for misusing the cheque.
However, he has not issued any intimation to bank to stop
the payment of cheque Ex.P.1 and he was having no
difficulties to give such intimation.
11. It is true that evidence of DW.1 and the
documents Exs.D.1 and 2 would go to show that, daughter
of accused Jyothi died on 31.07.2010 and accused was on
earned leave from 02.08.2010 to 25.08.2010 Ex.D.2. If
these documents are perused, then it would go to show
that accused was on duty in the month of September
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2010. Therefore, there is no reason to disbelieve the
evidence of complainant/PW.1 that she has given hand
loan to accused during the lunch hour in front of Saibaba
temple situated in the office premises.
12. Accused has next contended that demand
notice issued by complaint Ex.P.3 is not served to accused.
Indisputably, the demand notice Ex.P.3 was sent to office
address of accused and the correctness of the said address
has not been denied by accused. The defence counsel has
subjected PW.1 to lengthy cross-examination on the issue
of service of demand notice and the procedure followed in
the office for receiving the post in the inward section. The
demand notice is sent through RPAD, the signature of
accused is appearing on the acknowledgement card which
he has not denied. The mere fact that notice was not
served to the residential address of accused, it cannot be
the ground to hold that there is no service of demand
notice to accused. Learned counsel for accused on the
point of non service of demand notice relied on the
judgment of Hon'ble Kerala High Court in Jayachandran
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Vs. Baburaj reported in 1998 Cri.L.J. 3671 and
another judgment of Hon'ble Apex Court in M.D.Thomas
Vs. P.S.Jaleel and another reported in 2009 (14) SCC
398. In view of the facts involved in the said case, the
service of demand notice was held to be not proper.
Whereas, in the present case the demand notice is duly
served to the accused vide acknowledgement card Ex.P.4
and the signature of accused is appearing. Therefore, the
aforementioned two decisions have no application to the
facts of the present case.
13. Accused has contended cheque in question
Ex.P.1 was issued as a security for the loan of Rs.40,000/-
which was availed from complainant and the said cheque
has been misused to file this false case. The contents of
Ex.P.1 are not written by him. Learned counsel for
complainant placed reliance on the judgment of Hon'ble
Gujarath High Court in Sathish Jayantilal Shah Vs.
Pankaj Mashruwala and another reported in 1996
Cri.L.J. 3099, wherein it has been observed and held
that:
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"Thus the applicant clearly admitted
execution, hence this contention needs no
consideration and be rejected. Apart from this fact,
no law provides that in case of any negotiable
instrument entire body has to be written by maker
or drawer only. What is material is signature of
drawer or maker and not the body writing hence
question of body writing has no significance".
14. Learned counsel for complainant also relied on
the Co-ordinate Bench judgment of this Court in
S.R.Muralidar Vs. Ashok G.Y. reported in 2001 (4)
KAR.L.J 122, wherein it has been observed and held at
para 8 as under:
" The fact that a document executed in
inchoate with regard to some of the material
particulars would not render such contract invalid
nor make the instrument illegal or inadmissible.
Voluntarily, if a person were to deliver an inchoate
instrument authorising the receiver to fill up the
material contents as agreed upon, the cheque does
not get tainted as inadmissible nor it amounts to
tampering with material particulars".
Therefore, in view of the principles enunciated in
both the aforementioned judgment, the contention of
accused that the contents of Ex.P.1 are not in his hand
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writing and he has not issued cheque Ex.P.1 cannot be
legally sustained.
15. Learned counsel for accused in support of his
contention that the loan transaction of accused is not
shown in the income tax return relied on the judgment of
Bombay High Court in Sanjay Mishra Vs. Ms.Kanishka
Kapoor @ Nikki and another reported in 2009 Cri.L.J
3777. Wherein it has been observed and held that:
"amount advanced by complainant to
accused was large amount was not repayable within
few months. Delivered by complainant to disclose
the amount in his income tax returns or books of
accounts. Sufficient to rebut presumption".
Learned counsel for appellant relied on the Co-ordinate
Bench Judgment in Gajanan Kallappa Kadokar Vs.
Appasaheb Siddamallappa Kaveri reported in 2022
Live Law (KAR) 483, wherein it has been observed and
held that:
" the provision of 269SS of Income Tax Act
does not make the alleged transaction void. The
concerned authorities can take necessary action
against the complainant for non compliance of 269
of the Income Tax Act".
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Therefore, the non showing of loan transaction of
accused in income tax returns if at all it was availed by
complainant being liable for assessment of income tax
returns then also the non disclosure of loan transaction will
not affect the transaction claimed by complainant.
16. Learned counsel for accused in support of his
contention that material alterations in drawing the cheque
Ex.P.1 will not attract penal action in terms of Section 138
of N.I.Act relied on the following three judgments:
1) AIR 1986 AP 120 - Jayantilal Goel -Vs-
Smt.Zubeda Khanum
2) 2005 Cri.L.J.1237 - Ramachandran -Vs-
K.Dineshan
3) LAWS (APH) - 2003-7-143 -Avon Organics
Ltd.(A Company Incorporated Under Companies
Act, 1956) -Vs- Pioneer Products Ltd.
I have gone through the principles enunciated in
these decisions regarding the document Ex.P.1 is held to
be void on account of material alteration in the cheque. In
the present case accused did not dispute the issuance of
cheque Ex.P.1 with his signature on the account
maintained by him drawn on Corporation bank. In view of
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the aforementioned judgment relied by the counsel for
complainant in Satish Jayantilal Shah and Sanjay
Mishra case referred supra the writing in cheque Ex.P.1 is
not material and only the signature of accused that
matters that it was drawn by accused.
17. Learned counsel for accused has also argued
that when actually the money was paid has not been
pleaded by complainant and also no evidence is produced
to prove the said fact. In support of such contention
reliance is placed on the Co-ordinate Bench Judgment of
this Court in H.Manjunath Vs. Sri.A.M.Basavaraju
reported in ILR 2014 KAR 6572. In the said case before
this Court complainant authoritively contended that it is
the accused who filled up cheque thereby creating/shifting
burden upon to prove it is in the hand writing of accused.
The said facts are not the one involved in the present
case. The non mentioning of specific date cannot take
away the case of complainant, but the same will have to
be appreciated with the other evidence available on
record.
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18. Learned counsel for accused in support of his
contention that even according to complainant, she is a
Government servant and she has given hand loan to the
accused. The alleged transaction entered into between
complainant and accused was illegal and without
consideration. Relied on the Co-ordinate Bench Judgment
of this Court in Jagadeesh Hiremath Vs. R.Venkatesh
in Crl.A.No.907/2017 a/w 908/2017 dated
13.02.2020. This Court having found on the material
evidence on record that complainant being Government
servant was involved in money lending business without
there being any license and the transaction entered
between complainant and accused was illegal and without
consideration and the same is hit by Section 23 of Indian
Contract Act. In the present case the complainant has
never pleaded that she is doing money lending business
and given loan of Rs.1,00,000/- to accused with interest.
It is the accused who has taken that defence and relied on
the documents at Exs.D.3 to 12. The proceedings between
complainant and one R.Ranga in C.C.No.17314/2014 who
is also the D group employee working in the same
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department of complainant. The lending of money to
colleagues working in the same department itself cannot
be a ground to hold that complainant was doing money
lending business in contravention of her service conditions.
In the aforementioned judgment relied by learned counsel
there was enough material evidence that on demand
promissory note and five cheques were issued in favour of
complainant and accused has agreed to pay interest at
1.5% per month. The said conduct of complainant was held
to be illegal contract falling within the ambit of Section 23 of
Indian Contract Act and also against rule 21 of Karnataka
Civil Service (conduct) Rules, 1966 (i) 1956. As such, this
Court has held that debt was in existence as on the date of
presentation of the cheque for encashment, the accused
cannot be held liable for consequences of dishonour
thereof. The mere lending of money to the colleagues itself
may not amount to misconduct of the complainant. If at
all there is any such misconduct, it is for the competent
authority to take action against complainant in accordance
with law.
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19. Learned counsel for accused in support of his
contention that there was no any legally enforceable debt
relied on the Co-ordinate Bench Judgment of this Court in
Shiva Murthy Vs. Amruthraj reported in ILR 2008
4629. This Court in view of the material evidence on
record in the said case has recorded finding that "it is only
after satisfying that the complainant has proved existence
of legally enforceable debt or liability, the Courts could
have proceeded to draw presumption under Section 139 of
N.I.Act and thereafter find out as to whether or not the
accused has rebutted the said presumption. Learned
counsel for accused also relied on the judgment of Hon'ble
Apex Court in G.Pankajakshi Amma and others Vs.
Mathai Mathew (Dead) through LRs. and Another
reported in (2004) 12 SCC 83, wherein it has been
observed and held that unaccounted transaction between
the parties is a illegal transaction and no penal action in
terms of Section 138 of N.I.Act can be sustained. In the
present case accused has failed to demonstrate that it is
case of unaccounted money or transaction was illegal. The
passing of consideration has to be presumed in terms of
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Section 118(a) of N.I.Act. Therefore, aforementioned both
judgments have no application to the facts of the present
case.
20. Learned counsel for accused also relied on
another judgment of Hon'ble Apex Court in Dalip Singh
Vs. State of Uttara Pradesh and others reported in
(2010) 2 SCC 114, in support of his contention regarding
dishonest intention of parties. In the present case
accused has failed to produce any evidence on record to
meet the legal requirement to establish the dishonest
intention of complainant in lending loan amount to
accused. Therefore, the said decision has no application to
the facts of the present case.
21. Lastly, learned counsel for accused in support of
his contention that Appellate Court could not interference
with the judgment of acquittal when two views are
possible, relied on the following three judgments of
Hon'ble Apex Court:
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1) (2016) 16 SCC 418 - Harbeer Singh Vs.
Sheeshpal and others.
2) (2003) 1 SCC 1 C - C.Antony Vs. K.G.
Raghaven Nair.
3) (2006) 6 SCC 39 M.S.Narayana Menon @ Mani
Vs. State of Kerala and Another.
In have carefully gone through the principles
enunciated in all these three decisions that another
golden thread which runs through the web of
administration of justice in criminal case is that if two
views are possible on evidence adduced in the case, one
pointing to the guilt of accused and other to his innocence,
the view which is favorable to accused should be adopted.
It has been further held that in an appeal against the
acquittal cannot substitute its' finding merely because
another contrary opinion was possible on the basis of
material on record. Unless the finding of Trial Court are
perverse or contrary to the material on record.
22. In the present case in view of the reasons
recorded as above none of the contention raised by
accused during course of cross-examination of PW.1 or out
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of the evidence of DW.1 with the documents Exs.D.1 to 12
are held to be unsustainable and the said evidence cannot
be accepted as rebuttal evidence to displace the statutory
presumption available in favour of complainant.
23. When once issuance of cheque Ex.p.1 with
signature of accused on the account maintained by him is
either admitted or proved by complainant, further rebuttal
evidence placed on record by accused found to be
insufficient to displace the statutory presumption, then the
statutory presumption in favour of complainant in terms of
Section 118 and 139 of N.I.Act continues to operate in
favor of complainant. The contrary finding recorded by
Trial Court for the reasons recorded as above held to be
not sustainable in law. Therefore, it will have to be held
that complainant has proved that accused has committed
the offence punishable under Section 138 of N.I.Act.
24. The question now remains is imposition of
sentence. The Court while imposing sentence must take
into consideration the offence committee by accused,
nature of evidence placed on record, the circumstance
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under which the transaction has been entered and the
cheque Ex.P.1 was issued for lawful discharge of debt has
to be taken into consideration. In the present case
complainant and accused are colleagues working in the
same department and the loan was granted by
complainant to meet the financial crises of accused. There
was no any commercial transaction that involved in this
case. Therefore, looking to the facts and circumstances of
the case and the evidence on record, so also by keeping in
mind the above referred requirements, if the accused is
sentenced to pay a fine of Rs.1,10,000/- and in default of
payment of fine shall undergo sentence of imprisonment
for three months is ordered will meet the ends of justice.
Consequently, proceed to pass the following:
ORDER
Appeal filed by appellant/complainant is hereby
allowed.
The judgment of Trial Court on the file of XV ACMM,
Bengaluru in C.C.No.13744/2011, dated 08.09.2014 is
hereby set aside.
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Accused is convicted for the offence punishable under
Section 138 of N.I.Act and sentenced to pay fine of
Rs.1,10,000/- and in default of payment of fine shall
undergo simple imprisonment for 3 months.
In exercise of power under Section 357 of Cr.P.C.,
out of the fine amount of Rs.1,05,000 is ordered to be
given to complainant as compensation and remaining
amount of Rs.5,000 is ordered to be defrayed as
prosecution expenses.
Registry to send back the records to Trial Court with
a copy of this order.
Sd/-
JUDGE
GSR
