Karnataka High Court
Sri Purushotham vs M/S Thapasi Yel Em Chits Pvt Ltd on 3 January, 2024
1 CRL.RP NO.698 OF 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 3RD DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL REVISION PETITION NO.698 OF 2020
BETWEEN:
SRI PURUSHOTHAM
S/O SRI.Y.NARAYANA SHETTY,
SINCE DEAD BY HIS LR's
1a) SMT. UMA
W/O LATE PURUSHOTHAM
AGED ABOUT 43 YEARS
1b) SRI. KRUTHIK BALAJI
S/O LATE PURUSHOTHAM
AGED ABOUT 22 YEARS
R/AT NO.28/1, 3RD D MAIN ROAD,
9TH CROSS, J.P.NAGAR 1ST PHASE,
SARAKKI,
BENGALURU - 560 011
...PETITIONERS
(BY SRI. MANJUNATHA H, ADVOCATE)
AND:
M/S THAPASI YEL EM CHITS PVT LTD
REGD AND ADMINISTRATION OFFICE AT
NO.22/1, BASAVANNA LANE,
K.R.SHETTYPET,
BENGALURU - 560 002
REPTD BY ITS GPA HOLDER
PREM KUMAR B
.....RESPONDENT
(VIDE ORDER DATED 25.09.2023 NOTICE TO RESPONDENT IS
HELD SUFFICIENT)
2 CRL.RP NO.698 OF 2020
THIS CRL.RP IS FILED UNDER SECTION 397 R/W
SECTION 401 OF CR.P.C PRAYING TO a) SET ASIDE THE
JUDGMENT OF CONVICTION IN C.C.NO.19101/2014
DISPOSED BY THE XXII ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE DISPOSED OFF ON 03.02.2018 AND ALSO SET
ASIDE THE JUDGMENT IN CRIMINAL APPEAL NO.349/2018
DISPOSED OFF BY THE LX ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE, BENGALURU CITY (CCH-61) ON
11.08.2020 PRODUCED AS PER ANNEXURE-B; b) ALLOW THE
REVISION PETITION ORDERING ACQUITTAL OF THE
REVISION PETITIONER IN C.C.NO.19101/2014 DISPOSED BY
THE XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE
DISPOSED OFF ON 03.02.2018 PRODUCED AS PER
ANNEXURE-A; c) PASS / GRANT SUCH OTHER ORDER/S AS
THIS HON'BLE COURT DEEMS FIT TO PASS/GRANT IN THE
INTEREST OF JUSTICE.
THIS CRIMINAL REVISION PETITION HAVING BEEN
HEARD AND RESERVED ON 10.11.2023, COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT MADE
THE FOLLOWING:
ORDER
In this petition filed under Section 397 r/w 401 of
Cr.P.C, petitioner who is arraigned as accused has
challenged his conviction and sentence imposed by the
trial Court for the offence punishable under Section 138
of N.I Act, which came to be confirmed by the Session
Court by dismissing the appeal filed by him.
2. For the sake of convenience, the parties are
referred to by their rank before the trial Court.
3. Complainant, which is a private limited
company dealing in chit fund business filed a complaint
under Section 200 Cr.P.C against the accused alleging
the offence punishable under Section 138 of N.I. Act. It is
the case of the complainant that accused and his wife
Smt Uma were subscribers to 4 chits of the value of
Rs.15 lakhs, Rs.9 lakhs, Rs.3 lakhs and Rs.3 lakhs. They
successfully bid for chits and received the money. They
were required to pay the balance. However, on their
failure to pay the balance amount, arbitration
proceedings were initiated. Despite due service of notice,
the accused and his wife failed to appear before the
arbitrator. Therefore, the Arbitrator proceeded ex-parte
and passed the award, determining the amount due from
the accused and his wife and ordered to pay the same
with interest at 3% p.m.
4. According to the complainant, after the fact of
passing award was brought to the notice of the accused,
he issued the subject cheque for a total sum of
Rs.21,77,000/- which includes the amount due from his
wife also. However, when the cheque was presented for
realization, it was dishonoured on the ground "Account
closed". Therefore, complainant got issued legal notice.
The accused has failed to receive the notice despite
information was delivered to him. Consequently, accused
has failed to pay the amount due under the cheque. He
has also not sent any reply. Without any alternate
complaint is filed.
5. Accused appeared before the trial Court and
contested the case. He has pleaded not guilty and
claimed trial.
6. In order to bring home guilt to the accused,
the GPA holder of the complainant company is examined
as PW-1. Ex.P1 to 10 are marked.
7. During his statement under Section 313
Cr.P.C, the accused has denied the incriminating
evidence led by the complainant.
8. The accused has not stepped into the witness
box. But he has got marked a set of 28 receipts during
the cross-examination of PW-1 as Ex.D1.
9. Vide the impugned judgment and order the
trial Court accepted the contention of the complainant
and convicted the accused and sentenced him to pay fine
of Rs.21,82,000/-, in default to undergo simple
imprisonment for three months.
10. The Session Court dismissed the appeal filed
by the accused and thereby confirmed the judgment and
order of the trial Court.
11. Being aggrieved by the same, the accused has
filed this petition, contending that the GPA holder who is
examined on behalf of complainant had no personal
information and as such he was not competent to speak
on behalf of the complainant and therefore with his
evidence, the complainant has failed to prove the
allegations against accused. The complainant has not
produced any documents regarding the accused
participating in the chits scheme run by the complainant.
The Courts below have not appreciated the oral and
documentary evidence placed on record in right
perspective.
12. The Sessions Court has also erred in
confirming the order of the trial Court. The citations
relied upon by the Sessions Court are not applicable to
the case on hand. The complainant has not proved that a
sum of Rs.21,77,000/- was due from the accused. The
complainant has also not disclosed the fact of execution
petition filed by it against the accused. In the light of the
decision of the Hon'ble Supreme Court Damodar
S.Prabhu Vs. Sayed Babalal (Damodar)1, the complaint
was liable to be dismissed. The trial Court has convicted
the accused only on the basis of presumption under
Sections 118 and 139 of the N.I. Act. The trial Court has
not appreciated the fact that complainant has misused
the cheque issued by accused by way of security. The
AIR 2010 SC 1907: (2010) 5 SCC 663
judgment and order of the trial Court as well as the
Session Court are perverse and liable to be set aside.
13. Heard arguments of both sides and perused
the record.
14. The fact that complainant is engaged in
business of running chit funds and accused and his wife
were subscribers to four such chits and he and his wife
successfully bid the said chits and received the amount is
not in dispute. Alleging that the accused and his wife
failed to pay the balance amount, complainant initiated
arbitration proceedings. Both accused and his wife have
remained absent and therefore the Arbitrator has passed
ex-parte award determining the amount due and ordered
that the complainant is entitled to recover the same with
interest at 3% p.m. Contending that the accused offered
to pay the amount due from him and his wife and issued
the subject cheque, however, on presentation, it was
dishonoured on the ground "Account closed", the
complainant has filed the complaint.
15. The accused has claimed that he and his wife
are not residing in the address to which notices were
sent by the Arbitrator and therefore they were wrongly
placed ex-parte. Before this Court also, the accused has
taken a plea that he is not residing in the given address
to which the legal notice was sent and therefore there is
no due service of notice. At the outset it is relevant to
note that the accused and his wife have not challenged
the award passed by the Arbitrator either on merits or on
the ground that notice was not served on them.
Therefore, it is not open to the accused to content that
he and his wife were not residing in the address to which
notice was sent by the Arbitrator.
16. In this complaint also the address of the
accused is same as given in the arbitration proceedings.
The order sheet of the trial Court disclose that summons
and warrants sent to the accused have returned with
endorsement that he is not residing in the said address.
However, the complainant has persistently sent the
summons and warrants to the accused to the same
address. Ultimately on 07.01.2017, the accused has got
the case advanced, appeared through the counsel and
secured bail and got the non-bailable warrant issued
against him recalled.
17. Except claiming that he was not residing in
the address to which the legal notice was sent, the notice
of arbitration proceedings as well as summons in the
complaint were sent, the accused has not led any
evidence to prove the address where he was residing
along with his wife and thereby to establish that the
notice in arbitration proceedings as well as legal notice in
respect of dishonour of the cheque are not duly served
on him. Therefore, the defence of the accused that he is
not duly served with the notice as well as arbitration
proceedings cannot be accepted. The legal notice sent to
the accused as per Ex.P8 is returned with endorsement
addressee absent and information delivered. Having
regard to the fact that it is the last known address and
accused having failed to prove that he was staying in any
other address, presumption is required to be drawn that
intentionally the accused has failed to receive the notice.
18. Having failed to receive the notice, the
accused has not only failed to send reply to the notice
and also pay the amount due under the cheque. The
accused has also failed to enter into the witness box to
prove that he has not issued the subject cheque on
12.02.2013, but it was taken from him at the time of his
membership for the chit business. The complainant has
relied upon Ex.P9 stated to be a letter given by the
accused at the time of issuing the cheque at Ex.P6.
During the course of this letter, the accused has stated
that in the respect of the amount and interest due from
him and his wife, he is issuing the subject cheque.
19. The accused has also disputed that he has
given the letter at Ex.P9 along with the cheque at Ex.P6
and alleged that at the time of drawing the agreement
after he and his wife successfully bid the chits, his
signature was taken to a blank paper and a blank cheque
was also taken as per Ex.P6. To prove this allegation
also, he has not chosen to enter into the witness box.
Having regard to the facts and circumstance of the case,
it was not sufficient for the accused to make suggestions
to PW-1 to discharge the burden placed on him.
20. The accused has also challenged the capacity
of PW-1 to speak on behalf of the complainant as its GPA
holder. The entire case of the complainant is based on
documents. Therefore, there was no impediment for the
GPA holder to give evidence on behalf of the complainant
that the cheque was issued towards repayment of legally
recoverable debt or liability. Therefore, the initial burden
is on the accused to rebut the said presumption. Having
failed to enter into the witness box and also through the
cross-examination of PW-1, the accused has lost
opportunity of rebutting the said presumption.
21. So far as the dishonour of the cheque on the
ground of account being closed, as held by the Hon'ble
Supreme Court in NEPC Micon Ltd Vs Magma leasing Ltd
(NEPC Micon)2, return of cheque by bank unpaid on the
ground of account being closed, attract the provisions of
Section 138 of N.I Act and as such accused is liable to be
punished. The co-ordinate Bench of this Court in Nagaraj
Upadhyaya Vs M Sanjeevan (Nagaraj Upadhyaya)3 held
that, where the account is not closed on the instructions
of the complainant, but by operation of law, i.e, as per
the Rules of the Bank, then the offence under Section
138 of N.I Act is not attracted. However, the accused has
not taken any pains to prove for what reason the account
came to be closed. So far as the contention of the
accused that the trial Court has not followed the decision
of the Hon'ble Supreme Court in (Damodar) is
concerned, in this decision, the Hon'ble Supreme Court
issued guidelines for encouraging the settlement of
disputes based on cheque bounce cases. The accused
never came forward to settle the dispute. Consequently,
the above decision is not applicable to the case on hand.
(1994) 4 SCC 253
2007 SCC Online Kar 214
22. In the light of the presumption under Section
138 of N.I Act and on the failure of accused to rebut the
presumption, both trial Court as well as the Session
Court after appreciating the oral and documentary
evidence placed on record have come to a correct
conclusion that the charge levelled against the accused is
proved and convicted and sentenced him accordingly.
This Court finds no justifiable grounds to interfere with
the findings of the trial Court as well as the Session
Court. In the result, the petition fails and accordingly the
following:
ORDER
(i) Petition filed by the petitioner under
Section 397 r/w 401 Cr.P.C is dismissed.
(ii) The impugned judgment and order dated
03.02.2018 in C.C.No.19101/2014 on the
file of XXIV Addl.Judge, Small Causes
Court & XXII ACMM, Bengaluru and
judgment and order dated 11.08.2020 in
Crl.A.No.349/2018 on the file of
LX Addl.City Civil and Session Judge,
Bengaluru are confirmed.
(iii) The Registry is directed to send back trial
Court as well as Session Court records
along with copy of this order forthwith.
Sd/-
JUDGE
RR
