D Achutha Kamath vs Rajeshwari P M
2024 Latest Caselaw 18753 Kant

Karnataka High Court

D Achutha Kamath vs Rajeshwari P M on 26 July, 2024

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                                                          NC: 2024:KHC:29531
                                                        CRL.A No. 62 of 2012




                     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                          DATED THIS THE 26TH DAY OF JULY, 2024

                                           BEFORE
                    THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR
                              CRIMINAL APPEAL NO. 62 OF 2012
                   BETWEEN:

                   D. ACHUTHA KAMATH
                   S/O D. YASHWANTH KAMATH
                   AGED 55 YEARS
                   PROPRIETOR
                   M/S M.G.M. TRADERS
                   APMC YARD, SHIVAMOGA.
                                                                ...APPELLANT
                   (BY SRI. P.N. HARISH, ADVOCATE)
                   AND:

                   RAJESHWARI P.M
                   W/O MARULARADHYA
                   MAJOR
                   PROP:T.S. SWAMY
                   ARECANUT COMPANY
Digitally signed   R/O 1ST CROSS, RAVINDRANAGAR
by SHAKAMBARI      SHIVAMOGA.
Location: HIGH
COURT OF
KARNATAKA                                                     ...RESPONDENT
                   (BY SRI P.B. UMESH ADVOCATE FOR
                       SRI R.B. DESHPANDE, ADVOCATE)

                        THIS CRL.A IS FILED U/S.378(4) OF CR.P.C, PRAYING TO
                   SET ASIDE THE IMPUGNED JUDGMENT OF ACQUITTAL OF
                   RESPONDENT       DATED       15.11.2011     PASSED     IN
                   C.C.NO.1392/2009 BY THE III - ADDL. CIVIL JUDGE AND JMFC,
                   SHIVAMOGGA - ACQUITTING THE RESPONDENT/ACCUSED FOR
                   THE OFFENCE P/U/S. 138 OF N.I.ACT.
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                                            NC: 2024:KHC:29531
                                           CRL.A No. 62 of 2012




     THIS CRIMINAL APPEAL HAVING BEEN RESERVED FOR
JUDGMENT COMING ON FOR PRONOUNCEMENT OF THIS DAY,
RAMACHANDRA D. HUDDAR J., DELIVERED/PRONOUNCED
THE FOLLOWING:

CORAM: HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR


                      CAV JUDGMENT

(PER: HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR)

Appellant/Complainant being aggrieved and

dissatisfied of acquittal of Respondent/Accused in Criminal

Case No. 1392/2009 dated 15.11.2011 by the III Addl.

Civil Judge And J.M.F.C., Shivamogga, has preferred this

appeal.

2. The parties to this appeal are referred to as per

their rank before the trial Court.

Case of the Complainant before the trial Court:

3. The complainant has been running Arecanut

business under the name and style of M/S.M.G.M. Traders

at A.P.M.C.Yard, Shivamogga. The accused was also

running Arecanut Mandi at A.P.M.C.Yard, Shivamogga. The

accused has purchased Arecanut of Rs.4,00,000/- from the

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complainant. To repay the said amount, accused issued a

cheque bearing No.128706 dated 30.09.2003 drawn on

State Bank of Mysore, A.P.M.C. Yard, Shivamogga.

Complainant stated that, along with cheque of

Rs.4,00,000/-, another cheque was also endorsed to the

complainant for Rs.5,00,000/- in order to return the

advanced money paid by the complainant towards supply

of Arecanut. That means the accused has issued two

cheques in favour of the complainant. But when the

cheque was presented for encashment, it was dishonoured

with endorsement as the accused has reported that the

"Cheque is lost".

4. A legal notice was issued to the accused on

22.10.2003 calling upon the accused to pay a sum of

Rs.4,00,000/-. The notice was sent to both residential and

Mandi address. But there was no response from the

accused. The complainant also contended that, in the

stock book, he has noted that the accused had purchased

the Arecanut worth of Rs.4,00,000/- from M.G.S Traders.

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He has maintained the account in the name of accused

and it is running account.

5. Therefore, complainant filed a complaint under

Section 200 of Cr.PC against accused for the offence

punishable under Section 138 of Negotiable Instruments

Act, 1881 (hereinafter referred as 'the NI Act').

Cognizance of the trial Court:

6. The jurisdictional Magistrate took cognizance of

the offence, recorded the sworn statement. Based upon

that, summons came to be issued to the accused and she

appeared before the trial Court and was enlarged on bail.

Accused pleaded not guilty for the offence alleged and

claimed to be tried.

7. To prove the case of the complainant, he

himself entered into the witness box as PW.1 and the bank

manager is examined as PW.2 and got marked Ex.P1 to

P10, and closed his evidence.

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8. After recording the statement of the accused

under Section 313 of Cr.PC, accused was examined herself

as DW.1 and closed her evidence.

Case of the Accused before the trial Court:

9. The accused was a proprietor of T.S.Swamy

Arecanut Company in Shimoga City. The accused admits

to have received the legal notice served by the

complainant but she contended that, her 100 cheque

leaves book was lost in the Mandi and she has not given

any cheque to M.G.S. Traders but, the cheque was drawn

from her account and Ex.P1(a) is her signature and this

cheque was not issued by her. She was not acquainted

with the complainant and she never met the complainant.

She also contended that, at no point of time, she

purchased Arecanut worth Rs.4,00,000/- from the

complainant. Though the complainant has contended that

the accused has issued two cheques, but he fails to

explain for what purpose the accused has issued two

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cheques on 30.09.2003. Therefore, she is not liable to pay

the amount of Rs.4,00,000/-.

Findings of trial Court:

10. The learned trial Court, on hearing the

arguments and on assessment of the evidence placed on

record by the complainant and accused, held that,

according to Section 139 of the NI Act, if a cheque is made

out to the complaint, it will be assumed that the cheque

was made out to the holder in order to discharge liabilities.

The concept mentioned earlier was applied in this

instance. But the accused has raised probable defence and

rebutted the presumption drawn in favour of the

complainant that she has not purchased Arecanut worth

Rs.4,00,000/- from the complainant. In fact, the

complainant was unable to present evidence that the

accused had bought Arecanuts from his mandi for an

amount of Rs. 4,00,000/-. Accused has demonstrated that

she has lost the cheque book. Furthermore, the

complainant has not demonstrated that, he has sent out a

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demand notice on the Ex.P1 cheque. After taking into

account all of these factors, the trial Court concluded that,

the complainant had not provided sufficient evidence to

establish that, the accused had committed the offence

covered by Section 138 of the NI Act and acquitted her

from the charges brought against her.

11. This is how now the appellant/complainant is

before this Court challenging the impugned judgment.

Proceedings before this Court:

i) Submissions on behalf of the Appellant:

12. The learned counsel for the appellant submits

that, the respondent having issued a cheque towards

purchase of areca from the complainant worth

Rs.4,00,000/- with an assurance that, on presentation of

the said cheque, it will be encashed. As the respondent

was the regular customer, believing the words of the

respondent, he presented the said cheque for encashment

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through his Banker. But, it was returned with an

endorsement by his banker stating that, `Cheque is lost'.

13. Therefore, he issued the statutory notice within

the stipulated time. Though the said notice was received

by the accused-respondent but, has not complied with the

contents of the notice. In view of purchase of arecanut,

the accused has issued the said cheque. He submits that,

even the husband of the accused used to have similar

transactions with him.

14. According to him, just to deprive the rights of

the complainant of his legitimate claim with regard to

purchase of arecanut from him, the accused has taken a

false defence of losing of her cheque book. It his further

submission that, though the contention is of losing of

cheque book but she has not filed any police complaint or

has taken any steps regarding the same. Therefore, it was

a cooked up story by the accused so as to defeat the

rights of the complainant. In support of his submission, he

relied upon evidence placed on record both oral and

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documentary and prays to allow the appeal and set aside

the impugned judgment.

15. In support of his submission, he also relied

upon the provisions of Sections 118 and 139 of NI Act

which speaks of presumption in his favour with regard to

the issuance of the cheque by the accused.

ii) Submissions on behalf of the Respondent:

16. Refuting the submissions of the counsel for the

appellants, the learned counsel for the respondent

supported the reasons assigned by the trial Court. He

contends that, though the presumption is very much

available with regard to the cheques where the signature

is admitted as per the aforesaid provisions of NI Act, but,

the said presumptions are rebuttable presumptions. The

accused has led the evidence rebutting the said

presumption. When the said presumption is rebutted, the

question of still availability of the presumption in favour of

the complainant does not arise at all.

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17. According to him, the defence of the accused

was that, there was no privity of contract of purchase of

Arecanut from the complainant by the accused at any

point of time. The accused is not having any acquaintance

of the complainant and the said complainant is a stranger

to her. Therefore, the question of she purchasing the

Arecanut from the complainant's Arecanut shop does not

arise at all. As the accused lost the cheque book from her

office and some of the cheque leaves were signed by her

so as to help her husband to do the business, because of

losing of the cheque book and tracing of a cheque leaf by

the complainant, just to have an unlawful advantage, the

said cheque was presented by the complainant.

18. It is his submission that, on coming to know of

this fact, she submitted a petition to her banker informing

about the losing of the cheque book belonging to her.

Accordingly, the bank acted upon the said petition and

when the said cheque was presented by the complainant,

rightly the banker has issued an endorsement. To that

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effect accused has lead evidence. To disprove the defence

of the accused, no effective cross-examination is directed

by the complainant. Hence, according to him, the learned

trial Court has considered all the factual and legal aspects

and rightly dismissed the complaint and acquitted the

accused. He supported the reasons assigned by the trial

Court.

19. In the light of the submissions of both the side

and on perusal of the materials placed on record, the point

that would arise for consideration is:

"Whether the trial Court has committed legal and factual error in acquitting the accused by observing that, the accused has rebutted the presumption available under the NI Act?"

20. As per the allegations made in the complaint,

accused purchased the areca worth Rs.4,00,000/- from

the complainant and issued a cheque bearing No.128706

drawn on State Bank of Mysore, APMC Yard Branch,

Shivamogga dated 30.09.2003. The said cheque was

presented for encashment through the banker of the

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complainant i.e. Shivamogga Arecanut Mandi Merchants

Co-operative Bank Ltd., APMC Yard, Shivamogga. But, the

said cheque was dishonoured as per the memo dated

6.10.2003 by reporting that, `cheque is lost` as per the

instructions of the accused. Thereafter, he issued a

statutory notice on 22.10.2003 and called upon the

accused to pay the cheque amount both under certificate

of posting and RPAD which were duly served on the

accused. But, accused did not pay the cheque amount.

Therefore, within the stipulated time, the complainant filed

the private complaint on 25.11.2003. Thus, with regard to

the mandatory provisions of filing a complaint alleging the

offence under Section 138 of the NI Act are complied by

the complainant.

21. When an offence under Section 138 of NI Act is

attributed against the accused, the heavy burden lies on

the complainant to prove the ingredients of the offence as

mandated under the provisions of NI Act. No doubt, the

presumption is very much available under Section 118 and

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139 of the NI Act, but, it is a rebuttable presumption.

Sections 118 and 139 of the NI Act read as under:

118. Presumptions as to negotiable instruments.--Until the contrary is proved, the following presumptions shall be made:--

(a) of consideration:--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

(b) as to date:--that every negotiable instrument bearing a date was made or drawn on such date;

(c) as to time of acceptance:--that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;

(d) as to time of transfer:--that every transfer of a negotiable instrument was made before its maturity;

(e) as to order of endorsements:--that the endorsements appearing upon a negotiable instrument were made in the order in which they appear then on;

(f) as to stamp:-- that a lost promissory note, bill of exchange or cheque was duly stamped;

(g) that holder is a holder in due course:--that the holder of a negotiable instrument is a holder in due course: provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has

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been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.

139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section138 for the discharge, in whole or in part, of any debt or other liability.

22. The complainant by filing his affidavit by way of

examination-in-chief has reiterated the contents of the

complaint in his evidence. He relied upon Ex.P1 to P7.

Ex.P1 is the so called cheque alleged to have been issued

by the accused containing her signature. So far as

signature on Ex.P1 is concerned, accused admits. When

the said cheque was presented for encashment, the

banker of the complainant issued an endorsement stating

that `Cheque book reported to be lost'. The said memo is

produced at Ex.P2. Thereafter, the complainant has issued

legal notice and the copies of the same are produced

which are exhibited as per Ex.P4 and P7.

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23. This PW.1 is cross-examined by the accused

wherein it is stated by him that, with regard to sales of

arecanut from his shop, he has maintained day book,

ledger and bank pass book. He has maintained register to

that effect. He further states that, with regard to the sale

of arecanut to the accused, he has made an entry in his

stock register and other records. According to him, he has

produced the same.

24. On perusal of the documents produced and got

marked by the complainant, no such registers like, day

book, stock book and bank passbook are produced to

show that, complainant has sold Arecanut to the accused.

It is his evidence that he has paid Rs.4,00,000/- in cash

which was in his hand. He has not withdrawn any amount

from the banker. According to him, except Ex.P1, no

cheque was given to the accused.

25. He admits that there were previous transactions

but, to prove the same, except self say of PW.1, no

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evidence is placed on record by the complainant. He

admits that, he is also having a running account and he

accepts the cheque by way of a security. But, he denies

that he has accepted the said cheque because of the

security.

26. PW.2 Varadaraj Kamath the then Manager of

State Bank of Mysore, is examined by the complainant to

prove that, he has issued Ex.P2 stating that the drawer of

the cheque has lost the same. He has been cross-

examined by the defence. It is elicited in the cross-

examination that, Ex.P8 is given by the accused being the

photocopy of the affidavit stating that the accused has lost

a cheque book containing 100 leaves. According to him,

when the cheque was presented for encashment, accused

was not possessing four lakhs in her account and to that

effect he has produced Ex.P9.

27. From the evidence of PW.2, it is very much

clear that, even much prior to the presentation of the

cheque, the accused has informed her banker that she has

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lost the cheque book with instruction not to honour any of

the cheques. So the defence of the accused is

corroborated by the evidence of PW.2 examined by the

complainant.

28. Accused also entered the witness box and have

specifically stated that, her husband had two transaction

with the complainant as told by her husband. She does not

know who has given the cheque to the complainant.

According to her, her cheque book containing 100 leaves

was lost by her in her office and she informed the banker

regarding the same. Further, she states that she has not

issued cheque Ex.P1 to the complainant.

29. The complainant has cross-examined the

accused wherein it is elicited that, it is accused who is the

owner of her business. Complainant is also doing his

arecanut business at APMC Yard Shivamogga. She does

not know that the complainant is running his business

under the name and style of MGM Traders. She is specific

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with regard to losing of cheque book. She informed the

banker but, has not filed any police complaint. She admits

that Ex.P(1)(a) is her signature. Though lengthy cross-

examination is directed to her, but, throughout her cross-

examination, she is consistent about losing of the cheque

and informing the Bank.

30. When it is the specific case of the complainant

that, in view of purchase of Arecanut worth Rs.4,00,000/-

by the accused, he has issued the said cheque. When the

cheque amount is Rs.4,00,000/- and Arecanut worth

Rs.4,00,000/- sold by him by his MGM Traders, as spoken

to by him, there must have been some entries in the

books of account maintained in his business. But, he has

not produced even a scrap of paper to that effect to

buttress his plea of maintaining the said account with

regard to the entries of transactions. The said entries in

the books of account or the receipt for having sold the

arecanut worth Rs.4,00,000/-, at least an office copy could

have been the best evidence to prove the transaction of

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sale of Arecanut by the complainant to the accused. In the

absence of such suitable and apt evidence, it can never be

stated that, the complainant is able to prove the

transaction between himself and accused with regard to

sale of Arecanut by him.

31. As per the observations of the learned trial

Court, the complainant has utterly failed to prove the legal

transaction in between himself and accused as no

documents are produced. It is observed by the trial Court

by relying upon the judgment of Hon'ble Apex Court in

Rangappa vs. Sri Mohan (AIR 2010 SC 1898) that the

presumption which is available has to be proved as it is

mandatory. It is not a general presumption. Even it is held

that, the presumption mandated by Section 139 of the Act

does not indeed include the existence of the legally

enforceable debt or liability. It is observed in catena of

judgments that, presumption which is stated under

Section 139 of NI Act which are rebuttable presumption

and keeping this in view, it is a settled position that, when

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an accused has to rebut the presumption under Section

139, the standard of proof for doing so is that of

"preponderance of probabilities". Therefore, if the accused

is able to raise a probable defence which creates doubts

about the existence of a legally enforceable debt or

liability, the prosecution can fail.

32. If this analogy is applied to the present facts of

case, as no documentary evidence is produced to prove

about the sale of Arecanut by the complainant to the

accused, it is hard to believe the say of the complainant

that, he really has sold Arecanut to the accused. Merely

because accused admits her signature on the said cheque,

that would not help the complainant to draw the

presumption. Therefore, the very transaction as set up by

the complainant is not proved in accordance with law.

There was no privity of contract of sale of Arecanut by the

complainant with the accused and in the absence of such

an acceptable evidence, it can very well be stated that, the

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accused has rebutted the presumption available under

Section 139 of NI Act.

33. Learned trial Court, after assessing the oral and

documentary evidence and by applying the principles laid

down by the Hon'ble Apex Court in its judgment as stated

supra and by assigning cogent and acceptable reasons,

has found that, the complainant has failed to prove his

case with legal evidence. I do not find factual or legal error

committed by the trial Court in acquitting the accused. So,

therefore, there is no merit in this appeal and it is liable to

be dismissed by confirming the judgment of acquittal by

the trial Court which is impugned in this appeal.

Accordingly, the point raised supra is answered against the

complainant-appellant.

Resultantly, I pass the following:

ORDER

(i) Appeal is dismissed. The impugned judgment of acquittal passed by III Addl.Civil Judge, Shivamogga dated

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15.11.2011 in CC No.1392/2009, is hereby confirmed.

(ii) Bail bonds if any, executed by the accused stand cancelled.

(iii) Send back the trial Court records along

with copy of this judgment forthwith.

Sd/-

(RAMACHANDRA D. HUDDAR) JUDGE

SK