Karnataka High Court
Saroja vs Premalatha on 5 January, 2024
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CRL.RP No. 423 of 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE VENKATESH NAIK T
CRIMINAL REVISION PETITION NO.423 OF 2020
BETWEEN:
SAROJA
W/O R. DINESH
AGED ABOUT 49 YEARS
R/AT NO.59, 4TH 'A' CROSS
HOSAHALLI, VIJAYANAGARA PIPELINE
BENGALURU-560 040.
AND ALSO AT:
SAROJA
S/O R. DINESH
NO.214, 8TH MAIN
BHAVANI NAGAR
RAILWAY HOUSING LAYOUT
NEAR RTP OFFICE, MALLATHAHALLI
BENGALURU-560 056.
...PETITIONER
(BY SRI KARTHIK YADAV U., ADVOCATE)
AND:
Digitally signed
by VINUTHA M PREMALATHA
Location: HIGH W/O B. K. ROOPESH KUMAR @ B K RANGANATH
COURT OF
KARNATAKA AGED ABOUT 58 YEARS
R/AT NO.234, 14TH CROSS
M. C. LAYOUT, VIJAYANAGARA
BENGALURU-560 040.
...RESPONDENT
(BY SRI H.S.SOMNATH, ADVOCATE)
THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 R/W 401 CR.PC PRAYING TO SET ASIDE THE
IMPUGNED JUDGMENT OF CONVICTION AND ORDER OF SENTENCE
DATED 16.07.2018, PASSED IN C.C.NO.17099/2015 BY THE XXIII
A.C.M.M., AT BENGALURU AND JUDGMENT DATED 10.02.2020,
PASSED IN CRL.A.NO.1580/2018, BY THE LXIV ADDITIONAL CITY
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CRL.RP No. 423 of 2020
CIVIL AND SESSIONS JUDGE CCH-65 AT BENGALURU BY ALLOWING
THIS RP AND CONSEQUENTLY DISMISS THE COMPLAINT AND
CONSEQUENTLY ACQUIT THE ACCUSED/PETITIONER OF THE
CHARGE LEVELLED AGAINST HIM IN C.C.NO.17099/2015 ON THE
FILE OF THE XXIII A.C.M.M., AT BENGALURU.
THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD
AND RESERVED ON 19-12-2023, THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
ORDER
Heard Sri. Karthik Yadav. U, learned counsel for the
petitioner and Sri. H.S. Somanath, learned counsel for the
respondent.
2. The petitioner- accused has preferred this criminal
revision petition under Section 397 read with Section 401 of the
Code of Criminal Procedure, 1973 praying to set aside the
judgment of conviction and order of sentence dated 16.07.2018
passed by the XXIII ACMM, Bengaluru in C.C.No.17099/2015
and judgment dated 10.02.2020 passed by the LXIV Additional
City Civil and Sessions Judge, Bengaluru(CCH-65) in
Crl.A.No.1580/2018, wherein both the Courts passed
concurrent findings against the petitioner/accused and
convicted the accused for the offence punishable under Section
138 of the Negotiable Instruments Act, 1881 (hereinafter
referred to as 'N.I. Act' for short).
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3. For the sake of convenience, the parties are
referred to as per their ranking before the trial Court. The
petitioner is the 'accused' and the respondent is the
'complainant' before the trial Court.
4. The brief facts of the complainant's case are as
under:-
The complainant filed a private complaint under Section
200 of Cr.P.C. for the offence punishable under Section 138 of
the N.I. Act contending that the accused and complainant are
known to each other. During the month of January 2015, the
accused and her husband had approached the complainant and
her husband for financial assistance as the accused was in dire
necessity of money and she also intended to sell her house,
thus, the accused offered the complainant and her husband to
purchase her property, accordingly, the complainant and her
husband agreed to purchase the property. However, prior to
execution of the sale agreement, the accused insisted the
complainant and her husband to pay a sum of Rs.13.00 lakhs,
as the accused was bound to discharge certain financial
liabilities. Accordingly, the complainant and her husband paid a
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sum of Rs.13.00 lakhs towards advance sale consideration, out
of which, a sum of Rs.1.00 lakh was paid through cheque
bearing No.47553 dated 13.01.2015 drawn on Corporation
Bank, Nrupathunga Road Branch, Bengaluru in favour of the
husband of the accused and a sum of Rs.5.00 lakh and Rs.7.00
lakh respectively dated 24.01.2015 and 25.01.2015 drawn on
Corporation Bank, RPC Layout Branch, Vijayanagar, Bengaluru
in favour of the accused. Later, the accused and her husband
failed to execute the agreement of sale in favour of the
complainant inspite of several requests and reminders and
finally the accused declined to execute the sale agreement in
favour of the complainant and also did not return the advance
sale consideration. Finally, the accused issued a cheque bearing
No.752490 dated 10.05.2015 for a sum of Rs.12.00 lakhs
drawn on Janatha Seva Cooperative Bank Limited, Vijaynagar,
Bengaluru and on being presentation of the cheque, it was
returned with a shara 'funds insufficient' in the account of the
accused. On 26.05.2015, the complainant issued a legal notice
calling upon the accused to pay the amount due under the
cheque. Inspite of service of notice, the accused failed to pay
the amount due under the cheque. Hence, the complainant
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filed a private complaint under Section 200 of Cr.P.C., against
the accused for the offence punishable under Section 138 of the
N.I. Act.
5. After institution of the complaint, the trial Court
recorded the sworn statement of the complainant, took
cognizance under Section 190(1)(a) of Cr.P.C., secured the
presence of the accused and recorded the plea of the accused;
accused pleaded not guilty and claimed to be tried.
6. The complainant in order to prove her case, examined
herself as PW-1 and got marked eight documents as per Exs.P1
to P8. In order to rebut the claim of the complainant, the
accused examined herself on oath as DW-1.
7. On the basis of the oral and documentary evidence,
the trial Court convicted the accused for the offence punishable
under Section 138 of the Act and sentenced her to pay a fine of
Rs.12,00,000/- with interest at 18% p.a. from 23.06.2015 till
its realization with default imprisonment for one year.
8. Aggrieved by the judgment of conviction and order of
sentence passed by the trial Court, the accused preferred an
appeal in Crl.A.No.1580/2018 before the learned LXIV
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Additional City Civil and Sessions Judge, Bengaluru. In turn,
the First Appellate Court dismissed the appeal filed by the
accused and thereby, confirmed the judgment and conviction
passed by the trial Court.
9. Aggrieved by the concurrent findings passed by the
trial Court as well as First Appellate Court, the accused has filed
this petition.
10. It is contended by learned counsel for the petitioner
that the judgment of conviction and order of sentence passed
by both the Courts is against the settled principles of law; both
the Courts have failed to understand and appreciate the
provisions of law as required under Section 138 of N.I. Act; the
complainant failed to prove beyond reasonable doubt that the
cheque in question was issued towards legally enforceable debt
or liability in order to attract Section 138 of the Act. It is
further contended that the accused and the complainant
entered into an agreement of sale in respect of purchase of
house of the accused and in the agreement, there was
forfeiture clause viz., in case if the complainant fails to
purchase the house property, the accused would be at liberty to
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forfeit the advance sale consideration; as the complainant failed
to perform her part of the contract, the accused forfeited the
advance sale consideration as agreed between the parties, and
hence, the accused is not liable to pay any amount due under
the cheque and therefore, there was no legally recoverable
debt. Hence, prayed to allow the petition.
11. Learned counsel for the respondent contended that
both the courts have given concurrent findings and the
petitioner is convicted for the offence under section 138 of N.I.
Act. The complainant has proved her case beyond doubt;
hence, both the courts have drawn presumption under section
139 of N.I. Act. It is contended that if agreement of sale was
executed between the parties, the accused ought to have
placed the same before the trial court and she ought to have
forfeited the amount. But, the accused has not placed any such
agreement to substantiate that there was forfeiture clause in
the agreement to forfeit the advance amount. Hence, learned
counsel justified the judgment of conviction and sentence
passed by both the courts and prayed for dismissal of the
revision petition.
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12. On the basis of the submissions made by the parties
to the lis, the following points would arise for consideration of
this court:-
1. Whether the accused proved that the judgment
of conviction and order of sentence passed by
the trial Court as well as First Appellate Court
is perverse and calls for interference by this
Court?
2. What order?
My answer to the above points is as under:
Point No.1: In the negative
Point No.2: As per the final order for the following reasons:
Point Nos.1 and 2: It was the case of complainant that, the
accused borrowed a sum of Rs.13.00 lakhs from her in order to
discharge her financial needs and when the accused failed to
perform her obligation, the complainant insisted him to return
the amount or to execute the agreement of sale and when
accused neither executed the agreement of sale nor returned
the sum of Rs.13.00 lakhs, the accused issued a cheque for a
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sum of Rs.12.00 lakhs as per Ex-P1 and on being presented, it
was dishonored. On the other hand, the accused has denied
the allegations made in the complaint. The complainant, in
order to establish her claim, examined herself on oath as PW-1
and got marked in all 12 documents as per Exs.P1 to P12.
Ex.P1 is the Cheque, Ex.P2 is the Bank endorsement, Ex.P3 is
the legal notice, Exs.P4 and P5 are the postal receipts, Ex.P6 is
the postal acknowledgement, Ex.P7 is the unserved RPAD
cover, Ex.P8 is the bank passbook, Ex-P9 copy of complaint,
Ex-P10 police endorsement, Ex-P11 copy of statement and Ex-
P12 Notarized copy of retirement payment order.
13. On perusal of the oral testimony of PW-1, contents of
Ex.P1 - cheque and Ex.P3 - legal notice, it appears that the
accused offered the complainant to purchase her house and
there was an oral agreement between the parties, accordingly,
the accused borrowed a sum of Rs.13.00 lakhs for her urgent
needs in order to discharge her financial needs and later the
accused failed to perform her obligation, accordingly, the
complainant insisted her to return the amount or to execute the
agreement of sale in respect of house property, but, the
accused neither executed the agreement of sale nor returned
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the sum of Rs.13.00 lakhs, hence, she issued cheque for
Rs.12.00 lakh and instructed her to present the cheque on a
particular date and accordingly on 11.05.2015, the complainant
presented the cheque, the same was returned with a shara
'insufficient funds' in the account of the accused, therefore, a
legal notice was issued to the accused and inspite of issuance
of legal notice, the accused failed to pay the amount due under
the cheque. The accused has not disputed the issuance of
cheque and her signature found in Ex-P1. To substantiate such
contention, the accused examined herself as DW-1 and denied
the transaction.
14. On perusal of the material available on record, it
appears that the accused does not dispute the issuance of
cheque and nature of the transaction. However, she has taken
up the contention that there was forfeiture clause in the
agreement to forfeit the advance amount paid by the
complainant, which goes to show that the accused has
admitted the transaction and the issuance of cheque.
Therefore, the complainant has complied the legal requirement
of section 138 of N.I. Act. Now the burden shifts on the accused
to disprove the case of the complainant, but to rebut the
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burden, the accused has not placed any material to
substantiate her contention. Again the fact remains that the
accused has not discharged the transaction amount borrowed
from the complainant and she has not placed any material to
the effect that he has discharged the loan or forfeited the
amount received from the complainant. The accused has not
placed any material to show that the cheque was not issued
towards legally enforceable debt. On the contrary, the
complainant has proved that Ex-P1 cheque was issued by the
accused towards discharge of legally enforceable debt i.e.,
towards purchase of house property by her. In this regard, the
accused has not placed any contra evidence to disbelieve the
case of the complainant.
15. In this regard, learned counsel for the petitioner
relied upon the decision in the case of RAJESH JAIN v. AJAY
SINGH reported in Spl. Leave petition No.12802/2022 dated
09.10.2023 wherein at paras 34, 40 to 45, it is held as under:-
34. The NI Act provides for two presumptions:
Section 118 and Section 139. Section 118 of the Act
inter alia directs that it shall be presumed, until the
contrary is proved, that every negotiable instrument
was made or drawn for consideration. Section 139 of
the Act stipulates that 'unless the contrary is proved,
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it shall be presumed, that the holder of the cheque
received the cheque, for the discharge of, whole or
part of any debt or liability'. It will be seen that the
'presumed fact' directly relates to one of the crucial
ingredients necessary to sustain a conviction under
Section 138.
xxxxxxxxx
40. The standard of proof to discharge this evidential
burden is not as heavy as that usually seen in
situations where the prosecution is required to prove
the guilt of an accused. The accused is not expected
to prove the non-existence of the presumed fact
beyond reasonable doubt. The accused must meet the
standard of 'preponderance of probabilities', similar to
a defendant in a civil proceeding. [Rangappa vs.
Mohan (AIR 2010 SC 1898)]
41. In order to rebut the presumption and prove to
the contrary, it is open to the accused to raise a
probable defence wherein the existence of a legally
enforceable debt or liability can be contested. The
words 'until the contrary is proved' occurring in
Section 139 do not mean that accused must
necessarily prove the negative that the instrument is
not issued in discharge of any debt/liability but the
accused has the option to ask the Court to consider
the non-existence of debt/liability so probable that a
prudent man ought, under the circumstances of the
case, to act upon the supposition that debt/liability
did not exist. [Basalingappa Vs. Mudibasappa (AIR
2019 SC 1983) See also Kumar Exports Vs. Sharma
Carpets (2009) 2 SCC 513]
42. In other words, the accused is left with two
options. The first option-of proving that the
debt/liability does not exist-is to lead defence
evidence and conclusively establish with certainty that
the cheque was not issued in discharge of a
debt/liability. The second option is to prove the non-
existence of debt/liability by a preponderance of
probabilities by referring to the particular
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circumstances of the case. The preponderance of
probability in favour of the accused's case may be
even fifty one to forty nine and arising out of the
entire circumstances of the case, which includes: the
complainant's version in the original complaint, the
case in the legal/demand notice, complainant's case
at the trial, as also the plea of the accused in the
reply notice, his 313 statement or at the trial as to
the circumstances under which the promissory
note/cheque was executed. All of them can raise a
preponderance of probabilities justifying a finding that
there was 'no debt/liability'. [Kumar Exports and
Sharma Carpets, (2009) 2 SCC 513]
43. The nature of evidence required to shift the
evidential burden need not necessarily be direct
evidence i.e., oral or documentary evidence or
admissions made by the opposite party; it may
comprise circumstantial evidence or presumption of
law or fact.
44. The accused may adduce direct evidence to prove
that the instrument was not issued in discharge of a
debt/liability and, if he adduces acceptable evidence,
the burden again shifts to the complainant. At the
same time, the accused may also rely upon
circumstantial evidence and, if the circumstances so
relied upon are compelling the burden may likewise
shift to the complainant. It is open for him to also rely
upon presumptions of fact, for instance those
mentioned in Section 114 and other sections of the
Evidence Act. The burden of proof may shift by
presumptions of law or fact. In Kundanlal's case-
(supra) when the creditor had failed to produce his
account books, this Court raised a presumption of fact
under Section 114, that the evidence, if produced
would have shown the non-existence of consideration.
Though, in that case, this Court was dealing with the
presumptive clause in Section 118 NI Act, since the
nature of the presumptive clauses in Section 118 and
139 is the same, the analogy can be extended and
applied in the context of Section 139 as well.
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45. Therefore, in fine, it can be said that once the
accused adduces evidence to the satisfaction of the
Court that on a preponderance of probabilities there
exists no debt/liability in the manner pleaded in the
complaint or the demand notice or the affidavit-
evidence, the burden shifts to the complainant and
the presumption 'disappears' and does not haunt the
accused any longer. The onus having now shifted to
the complainant, he will be obliged to prove the
existence of a debt/liability as a matter of fact and his
failure to prove would result in dismissal of his
complaint case. Thereafter, the presumption under
Section 139 does not again come to the complainant's
rescue. Once both parties have adduced evidence, the
Court has to consider the same and the burden of
proof loses all its importance. [Basalingappa vs.
Mudibasappa, AIR 2019 SC 1983; See also, Rangappa
vs. Sri Mohan (2010) 11 SCC 441] Our Analysis."
16. In view of the facts, circumstances and the decision
cited supra, it appears that, the case set up by the accused is
riddled with contradictions. It is apparent on the face of the
record that there is not the slightest of credibility perceivable in
the defence set up by the accused. Further, nothing significant
has been elicited in the cross examination of the complainant to
raise any suspicion in the case set up by the complainant.
Other than some minor inconsistencies, the case of the
complainant has been consistent throughout, as can be noticed
from perusal of the complaint, demand notice and the affidavit
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evidence. In the absence of rebuttal evidence, the accused has
failed to prove the non-existence of liability.
17. When the execution of Negotiable instrument, passing
of consideration and signature found on Ex-P1 is admitted, the
court may draw presumption under section 118 of N.I. Act and
the court shall draw presumption under section 139 of N.I. Act
in favour of holder of the Negotiable Instrument.
18. In the instant case, the transaction and the issuance
of cheque is not in dispute. On the contrary, the accused has
taken up the contention that she has forfeited the advance
amount paid by the complainant on account of failure on the
part of the complainant, but, she has not placed any documents
to substantiate her contention.
19. If the cheque is issued in relation to legally
recoverable debt, it is to be construed that the same is issued
towards legally enforceable debt or liability. There is
presumption that if the Negotiable Instrument is supported by
consideration, the court shall draw presumption under the
provisions of N.I. Act. It was in this connection, that the cheque
in question was issued and when it was dishonoured, the
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complainant had to initiate action under section 138 of N.I. Act.
Therefore, the cheque was issued in connection with legally
enforceable debt. The argument of Sri. Karthik Yadav, for these
reasons cannot be accepted and therefore, this petition fails
and it is liable to be dismissed.
Hence, I proceed to pass the following:-
ORDER
1. The revision petition filed by the petitioner is
dismissed.
2. The judgment of conviction and order of sentence
dated 16.07.2018 passed in C.C.No.17099/2015 by
XXIII Addl. CMM, Bengaluru as well as the first
appellate court in Crl.A.No.1580/2018 dated
10.02.2020 is confirmed.
Sd/-
JUDGE
MN
