Karnataka High Court

Shree Mallikarjuna A vs Shree Rajeev Reddy on 2 July, 2024

Author: V Srishananda

Bench: V Srishananda

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                                                  CRL.RP No. 410 of 2021
                                              C/W CRL.RP No. 405 of 2021



                IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                      DATED THIS THE 2ND DAY OF JULY, 2024

                                      BEFORE
                     THE HON'BLE MR JUSTICE V SRISHANANDA
                 CRIMINAL REVISION PETITION NO. 410 OF 2021
                                       C/W
                 CRIMINAL REVISION PETITION NO. 405 OF 2021
              IN CRL.RP NO.410/2021
              BETWEEN:

              SHREE. MALLIKARJUNA A,
              SON OF ALEGOWDA,
              AGED ABOUT 38 YEARS,
              PROPRIETOR OF M/S. DEVI POWER ASSOCIATES,
              B.G. PALYA CIRCLE, TUMKUR - 572 101.
                                                            ...PETITIONER
              (BY SRI. N. JAGADISHA BALIGA, ADVOCATE)

              AND:

              SHREE RAJEEV REDDY @
Digitally
signed by R   CHANDRASHEKAR REDDY,
MANJUNATHA    AGED ABOUT 43 YEARS, PROPRIETOR
Location:
HIGH COURT    M/S. VYDURYA MARKETING,
OF            NO.56, 2ND FLOOR, POST OFFICE ROAD,
KARNATAKA
              YALACHENAHALLI, J.P. NAGAR 6TH PHASE,
              BENGALURU - 560 078.
                                                          ...RESPONDENT
              (BY SRI. GADILINGAPPA G.M, ADVOCATE)

                   THIS CRL.RP IS FILED U/S.397 R/W 401 OF CR.P.C
              PRAYING TO SET ASIDE THE IMPUGNED ORDER OF DISMISSAL
              OF CRL.A.NO.68/2017 DATED 16.03.2020 OF THE LEARNED
              LXVII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE,
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                                        NC: 2024:KHC:24662
                                    CRL.RP No. 410 of 2021
                                C/W CRL.RP No. 405 of 2021



BENGALURU IN CONFIRMING THE JUDGMENT OF CONVICTION
AND SENTENCE DATED 13.12.2016 PASSED BY XXIII A.C.M.M.,
AT BENGALURU IN C.C.NO.9140/2010 AND SET ASIDE BY THE
ORDER OF COURT BELOWS, BY ALLOWING THIS CRL.RP.
IN CRL.RP NO.405/2021

BETWEEN:

SHREE. MALLIKARJUNA A,
SON OF ALEGOWDA,
AGED ABOUT 35 YEARS,
PROPRIETOR OF M/S. DEVI POWER ASSOCIATES,
B.G. PALYA CIRCLE, TUMKUR.
                                              ...PETITIONER
(BY SRI. N. JAGADISHA BALIGA, ADVOCATE)

AND:

SHREE RAJEEV REDDY @
CHANDRASHEKAR REDDY,
AGED ABOUT 40 YEARS, PROPRIETOR
M/S. VYDURYA MARKETING,
NO.56, 2ND FLOOR, POST OFFICE ROAD,
YALACHENAHALLI, J.P. NAGAR 6TH PHASE,
BENGALURU - 560 078.
                                            ...RESPONDENT
(BY SRI. GADILINGAPPA G.M, ADVOCATE)

THIS CRL.RP IS FILED U/S.397 R/W 401 OF CR.P.C PRAYING
TO SET ASIDE THE IMPUGNED ORDER OF DISMISSAL OF
CRL.A.NO.67/2017 DATED 16.03.2020 OF THE LEARNED LXVII
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU
IN CONFIRMING THE JUDGMENT OF CONVICTION AND
SENTENCE DATED 13.12.2016 PASSED BY XXIII A.C.M.M., AT
BENGALURU IN C.C.NO.9043/2010 AND SET ASIDE BY THE
ORDER OF COURT BELOWS, BY ALLOWING THIS CRL.RP.
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                                        CRL.RP No. 410 of 2021
                                    C/W CRL.RP No. 405 of 2021



     THESE PETITIONS, COMING ON FOR ADMISSION, THIS
DAY, THE COURT MADE THE FOLLOWING:
                          ORDER

Heard Sri.N.Jagadisha Baliga, learned counsel for the

revision petitioner and Sri.G.M.Gadilingappa, learned

counsel for the respondent.

2. These two revision petitions are filed by the

revision petitioner challenging the order of conviction and

sentence passed in CC Nos.9140/2010 and 9043/2010

which was confirmed in Criminal Appeal Nos.68/2017 and

67/2017 for the offence punishable under Section 138 of

the Negotiable Instruments Act.

3. Brief facts of the case which are utmost

necessary for disposal of the revision petition are as

under:

3.1. Accused and the complainant were dealers in

the Ultra Motors Company. In respect of closure of the

show rooms at Bengaluru and Mysore, there was an

agreement between the accused and the complainant that

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the furniture, interior partition etc., which were available

in the showroom and which were in possession of the

complainant was given to the accused and value of those

furniture, interior partition etc., were fixed at

Rs.2,50,000/-.

3.2. Towards the payment of Rs.2,50,000/-, accused

passed on four cheques. Among them, three cheques

were dishonored and action was initiated. In respect of

one such dishonored cheque, there was an order of

acquittal of the accused on the ground that the payment

covered under the said cheque was not taken into account

by the complainant. The order of acquittal has become

final. In respect of remaining two cheques, the

complainant filed two complaints which were subject

matter of CC No.9140/2010 and 9043/2010.

4. The learned Trial Magistrate after taking

cognizance, secured the presence of the accused and

recorded the plea. Accused pleaded not guilty. Therefore,

the trial was held.

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5. In order to prove the case of the complainant,

complainant got examined as P.W.1 and relied on six

documentary evidence on record which were exhibited and

marked as Exs.P.1 to Ex.P.6 comprising of complaint as

Ex.P.1, original cheque as Ex.P.2, signature of the accused

as Ex.P.2(a), bank endorsement as Ex.P.3, office copy of

the legal notice as Ex.P.4, postal receipt and

acknowledgement as Exs.P.5 and 6. In the cross-

examination of P.W.1, no positive material is elicited so as

to dislodge the presumption available to the complainant

under Section 138 of the Negotiable Instruments Act.

6. As against the evidence placed on record by the

complainant, accused himself as D.W.1 and no

documentary evidence were placed on record. Accused

took up the contention that when he was about to clear

the dues, he received an email from the Ultra Motors to

the effect that the infrastructure in the form of interior

partition, furniture etc., belongs to the Ultra Motors

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company and complainant is not the owner and therefore,

he had to withhold the payment to the complainant.

7. In order to prababilise such a defence, accused

did not chose to examine any officials from the Ultra

Motors Company nor the alleged email correspondence is

placed on record.

8. Taking note of these aspects of the matter and

raising the presumption as is available to the complainant

under Section 139 of the Negotiable Instruments Act,

learned Trial Magistrate convicted the accused in both the

cases and imposed fine in a sum of Rs.1,00,000/- each,

out of which Rs.95,000/- was ordered to be paid as

compensation to the complainant and balance sum of

Rs.5,000/- is ordered to be appropriated towards the

defraying expenses of the State.

9. Being aggrieved by the said order of conviction

and sentence passed by the learned Trial Magistrate, the

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accused preferred the appeal before the First Appellate

Court in Criminal Appeal Nos.68/2017 and 67/2017.

10. The learned Judge in the First Appellate Court

after securing the records and hearing the arguments, vide

judgment dated 16.03.2020, dismissed both the appeals

and confirmed the order of conviction and sentence.

11. Being further aggrieved by the same, the

accused is before this Court in this revision.

12. Reiterating the grounds urged in the revision

petition, learned counsel for the revision petitioner

vehemently contended that the dispute between the

complainant and the accused is genuine dispute inasmuch

as, an e-mail came to be received from the Ultra Motors

company that the furniture, interior partition belonged to

them and as such, as a prudent person, accused issued

stop payment instructions to his banker and as such,

learned Trial Magistrate and learned Judge in the First

Appellate Court misdirected themselves in holding that

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cheques in question was issued towards the legally

recoverable debt. Therefore, sought for allowing the

revision petition.

13. He also pointed out that in respect of four

cheques, accused has honored one cheque and in respect

of yet another cheque, after context, the learned Trial

Magistrate acquitted the accused which has become final

shows that all is not well in the relationship of the

complainant and accused, resulting in complainant

misusing the cheques which were handed over to the

hands of the complainant by the accused under the

bonafide agreement with regard to the furniture and

interior partition, infrastructure that were available in the

showrooms at Bengaluru and Mysuru which were in

occupation of the complainant and handed over to the

accused and thus, sought for allowing the revision petition.

14. Per contra, learned counsel for the respondent

supports the impugned judgment.

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15. In the light of the arguments that has been put

forth on behalf of the parties, this Court perused the

material on record meticulously.

16. On such perusal of the material on record, it is

crystal clear that there was an agreement with regard to

the furniture and interior partition and other infrastructure

available in the showroom occupied by the complainant

when he was the dealer of Ultra Motors Company which

was handed over to the accused.

17. The value of those furniture, interior partition

etc., was fixed at Rs.2,50,000/- as per the parties, but the

learned Trial Magistrate has recorded the finding that it is

for Rs.2,00,000/-. The complainant has not challenged

the said finding. Therefore, the cheques in question were

parted away by the accused to the hands of the

complainant in respect of the said transaction.

18. Non honoring the cheques in question is not in

dispute. Cheques were admittedly dishonored with an

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endorsement 'stop payment'. It is settled principles of law

and requires no emphasis that to invoke the validity of the

stop payment endorsement, it is incumbent on the holder

of the account (accused) to establish before the Court that

as on the date of presentation of the cheque, there was

enough balance to honor the cheque amount plus the

minimum balance. No such evidence is placed on record

by the accused. In the absence of any such evidence

placed on record by the accused, even though the cheque

is dishonored with an endorsement 'stop payment', it

should be construed as 'insufficient funds'.

19. The second ground on which that the accused is

trying to defend the action initiated by the complainant is

that there was an e-mail correspondence by the Ultra

Motors Company stating that the infrastructure, furniture

etc., is belonging to the Ultra Motors Company and

therefore, he was not liable to pay the complainant.

20. To probabilise such a defence, except the oral

testimony of the accused, no other evidence is placed on

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record. Atleast an official from the Ultra Motors Company

would have been examined on behalf of the accused to

establish that in fact such an email was sent by the Ultra

Motors Company and complainant was only a franchise of

the Ultra Motors Company and therefore, infrastructure

was provided by the Ultra Motors Company nor that email

correspondence is placed on record by the accused so as

to prove his defence.

21. Under such circumstances, when there is a

transaction that has been admitted by the accused to the

effect that accused is in possession of the furniture and

other infrastructure available in the showroom at

Bengaluru and Mysuru which was erstwhile in the

occupation of the complainant and accused had agreed to

pay sum of Rs.2,00,000/- towards the value of the said

infrastructure, learned Trial Magistrate and learned Judge

in the First Appellate Court were justified in recording an

order of conviction under Section 138 of the Negotiable

Instruments Act as against the accused.

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22. Therefore, this Court, in this revision, does not

find any good grounds to interfere with the order of

conviction.

23. Having said thus, both the Courts have

misdirected themselves in ordering sum of Rs.5,000/- as

fine amount towards the defraying expenses of the State

in each of the cases.

24. Since, the lis is privy to the parties and no State

machinery is involved, imposing fine amount of Rs.5,000/-

towards the defraying expenses of the State cannot be

countenanced in law in each of the cases.

25. Accordingly, the following:

ORDER

i. Criminal Revision Petitions are allowed in

part.

ii. While maintaining the conviction of the

accused for the offence punishable under

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Section 138 of the Negotiable Instruments

Act, the fine amount ordered by the learned

Trial Magistrate confirmed by the First

Appellate Court in each of the cases, in a

sum of Rs.1,00,000/- is modified to the sum

of Rs.95,000/- and sum of Rs.5,000/-

imposed as fine towards the State is hereby

set aside.