Karnataka High Court
Sri M M Nanaiah vs Sri C A Manoj on 28 June, 2024
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CRL.A No. 314 of 2013
C/W CRL.A No. 483 of 2013
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF JUNE, 2024
BEFORE
THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR
CRIMINAL APPEAL NO. 314 OF 2013 (A)
C/W
CRIMINAL APPEAL NO. 483 OF 2013
IN CRIMINAL APPEAL NO.314 OF 2013
BETWEEN:
SRI. M.M. NANAIAH
S/O D. MUTHAPPA
AGED ABOUT 38 YEARS
MARAGODU VILLAGE
MADIKERI TALUK
KODAGU DISTRICT
...APPELLANT
(BY SRI. P.B. UMESH., ADVOCATE)
AND:
Digitally signed
by SHAKAMBARI
SRI. C.A. MANOJ
Location: HIGH
COURT OF S/O LATE APPAIAH
KARNATAKA R/AT NO.619/4, 36TH CROSS
II BLOCK, RAJAJINAGAR
BANGALORE-560 010
...RESPONDENT
(BY SRI. T.A. KARUMBAIAH, ADVOCATE)
THIS CRL.A. IS FILED UNDER SECTION 378(4) OF CR.P.C
PRAYING TO PRAYING TO SET ASIDE THE ORDER DATED
08.08.2012 PASSED BY THE SESSIONS JUDGE, KODAGU,
MADIKERI IN CRL.A. NO.5/09 - ACQUITTING THE
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CRL.A No. 314 of 2013
C/W CRL.A No. 483 of 2013
RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I.
ACT AND CONFIRM THE ORDER DATED 10.12.2008 PASSED BY
THE ADDL. C.J. (JR.DN) & J.M.F.C, MADIKERI IN C.C.
NO.1792/2002.
IN CRIMINAL APPEAL NO.483 OF 2013
BETWEEN:
SRI. M.M. NANAIAH
S/O D. MUTHAPPA
AGED ABOUT 38 YEARS
MARAGODU VILLAGE
MADIKERI TALUK
KODAGU DISTRICT
...PETITIONER
(BY SRI. P.B. UMESH., ADVOCATE)
AND:
SRI. C.A. MANOJ
S/O LATE APPAIAH
R/AT NO.619/4, 36TH CROSS
II BLOCK, RAJAJINAGAR
BANGALORE-560 010
...RESPONDENT
(BY SRI. T.A. KARUMBAIAH, ADVOCATE)
THIS CRL.A. IS FILED UNDER SECTION 378(4) OF CR.P.C
PRAYING TO PRAYING TO SET ASIDE THE ORDER DATED
08.08.2012 PASSED BY THE S.J., KODAGU, MADIKERI IN
CRL.A. NO.6/2009 - ACQUITTING THE RESPONDENT/ACCUSED
FOR THE OFFENCE P/U/S 138 OF N.I. ACT AND CONFIRM THE
ORDER DATED 10.12.2008 PASSED BY THE ADDL. C.J. (JR.DN)
& J.M.F.C, MADIKERI IN C.C. NO.1791/2002.
THESE CRIMINAL APPEALS HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 13.06.2024, POSTED FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
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CRL.A No. 314 of 2013
C/W CRL.A No. 483 of 2013
JUDGMENT
These two appeals are filed by appellant-complainant
challenging the common judgment passed in Criminal
Appeal Nos.5/2009 and 6/2009 dated 08.08.2012 passed
by the District and Sessions Judge, Kodagu, Madikeri,
wherein, the learned Sessions Judge allowed the appeals
filed by the accused holding that, admission by DW.3 who
was not present at the time of loan transaction is not an
admission and thus it is liable to be ignored and also held
that the learned trial Judge has wrongly acted upon it.
2. These appeals have got a chequered history.
Earlier, on the complaint filed by the present complainant,
C.C.Nos.1792/2002 and 1791/2002 were filed before the
Addl.Civil Judge (Jr.Dn.) and JMFC, Madikeri (`the trial
Court' for short) against the accused alleging the offence
under Section 138 of Negotiable Instruments Act, 1881 (in
short `the Act'). The trial Court, after considering the case
of the prosecution and also the defence, passed judgment
of conviction and order of sentence dated 10.12.2008
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convicting the accused for the offence under Section 138
of NI Act. This judgment of conviction and order of
sentence was challenged by respondent-accused before
the District and Sessions Judge, Kodagu, Madikeri (in short
`the First Appellate Court') in Criminal Appeal Nos.5/2009
and 6/2009 which came to be allowed by judgment dated
08.08.2012 acquitting the accused of the offences alleged
against him, against which, the complainant is before this
Court in these appeals.
3. Earlier, the appellant-complainant filed Criminal
Revision Petitions. Later, on the memo filed by learned
counsel, the co-ordinate bench of this Court passed orders
on 27.2.2013 and 2.4.2013 for conversion of Criminal
Revision Petitions into Criminal Appeals. After conversion,
the Criminal Revision Petitions were re-classified as
Criminal Appeals and re-numbered as above.
4. As per the case made out by the complainant in
C.C No.1792/2002 wherein the appeal was filed in Criminal
Appeal No.5/2009, the case made out by the complainant
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in the said criminal case is that, on 01.06.2002 accused
borrowed a sum of Rs.40,000/- from the complainant for
his legal necessity. While borrowing the said amount, he
issued a post dated cheque bearing No.029737 dated
31.08.2002. When the said cheque was presented to the
Bank 02.09.2002. It was returned on 09.09.2002 with an
endorsement as "funds insufficient". Thereafter, the
complainant got issued a demand notice on 16.09.2002
which was received by the accused on 17.09.2002.
Accused has not issued any reply to the said demand
notice dated 16.09.2002. Thus, it is alleged by the
complainant that, accused has committed the offence
under the provision of Section 138 of Negotiable
Instrument Act, 1881.
5. Similarly the case of the complainant in
C.C. No.1791/2002 is nothing but the replica of the
complainant allegations except the issuance of the notice
date as 02.06.2002. The remaining facts are one and the
same.
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6. In both the cases, the trial was conducted
independently. As per case of the complainant in C.C
No.1792/2002, complainant himself was examined as
PW.1. He got marked as Ex.P1 to P6. So also, the
accused also entered the witness box as DW.1 and
examined 2 witnesses in the shape of DW.2 and DW.3 and
got Ex.D1 to D4. Likewise in C.C No.1791/2002,
complainant independently entered the witness box as
PW.1 and got marked Ex.P1 to P6. In the said criminal
case also, accused entered the witness box as DW1 and
examined 2 witness in the shape of DW2 and DW3 and got
marked Ex.D1 to D4 and closed the defence evidence.
7. Though the learned Judicial Magistrate First
class passed independent judgments in both the cases,
but, as the appeals were preferred before the First
Appellate Court in the aforesaid Criminal Nos.5 /2009 and
6/2009, the learned First Appellate Court was of the
opinion that, though both the cases are arising out of the
independent complaint filed by the complainant but, the
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parties to the said complaints are one and the same. So
also, the question of law and facts involved is same,
except the date of issuance of cheque. Therefore, the
learned First Appellate Court passed a common judgment
by hearing the common arguments of the both sides.
Therefore, when the appeals are preferred arising out of
the common judgment, with the consent of both the sides,
as question of law and facts are involved in both the cases
is one another same, therefore the common arguments
are heard and common judgment is passed in both these
appeals though independent appeals are filed challenging
the said common judgment.
8. The learned counsel for the appellant-
complainant submits that, the learned trial judge i.e.,
Addl. JMFC, Madikeri after evaluation of the evidence and
documents so produced has come to a definite finding that
this accused in both the cases being one and the same has
committed the offence under Section 138 of Negotiable
Instrument Act. It is his submission that, when issuance
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of the cheque is admitted so also when signature on the
said cheque is admitted, then the complainant has
discharged the burden which was the cast on him.
Drawing the presumption, the learned trial Magistrate has
rightly convicted the accused in both the cases. It his
submission that, appellate Court has drawn the different
inference and presumption and has wrongly come to the
conclusion that, this presumption is rebuttable
presumption and in view of the evidence placed on record
through DWs.1 to 3, it has come to the conclusion that,
the presumption is not available in favour of the
complainant and has dismissed the compliant and
acquitted the accused.
9. It his submission that, such finding given by the
First Appellate Court is absolutely wrong. It his further
submission that, when legally recoverable debt is being
proved by the complainant which was rightly considered
by the trial Magistrate but, the First Appellate Court has
committed illegality in reversing the judgment of
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conviction and sentence. In support of his submission, he
relied upon the various evidence and defence set up by
the accused as per his submission. He prays to allow both
the appeals and restore the judgment of conviction passed
by the learned trial magistrate and set aside the impugned
judgment passed by the First Appellate Court.
10. As against this submission, the learned counsel
for the respondent in both the appeals with all vehemence
submits that, though the accused admits about cheque
belonging to him, so also admits his signature, that does
not mean that, the presumption which is available under
the provisions of Section 139 of NI Act is available to
complainant. As per his submission, the complainant has
utterly failed to prove the presumption in his favour. The
cheques were issued by way of a security. When the
cheques were issued by way of security towards discharge
of the loan standing with the VSS Bank, now the
complainant cannot take advantage of the same. This
complainant in his evidence has deposed so much of
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ignorance with regard to the said loan transactions with
the said bank. It was his mother who purchased the land
and she was due to pay the amount. In discharge of the
said loan amount as security, the cheques were issued by
the accused and after the payment, it was agreed between
the both complainant and accused to return the said
cheques. But, inspite of discharge of the said loan amount
to the bank, the complainant did not return. He has
misused the said cheques. After discharge of the said loan
amount, accused requested the complainant to return the
said cheques. But, the complainant has misused the said
cheques issued by way of a security. Therefore, it his
submission that the Appellate Court was right in
dismissing the complaint and allowing the appeal by
setting aside the judgment passed by the trial Magistrate.
He prays to dismiss both the appeals.
11. I have given my anxious consideration to the
argument of the both sides and meticulously perused the
records.
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12. In view of the rival submission of both sides,
the following points arise for my consideration in both
these appeals.
(1) Whether the cheques in question
were issued by the accused towards the
loan borrowed from the complainant or
whether the accused proves that those
cheques were issued by way of security to
the complainant as contended?
(2) If so, whether the impugned
judgment passed by the first Appellate
Court suffers from infirmity, illegality and
requires interference by this Court?
Points No.1 and 2 are discussed together.
13. As discussed in the foregoing paragraphs, in
both the cases complainant and accused were examined
themselves independently. The evidence spoken to by
PW.1 and DW.1 respectively is one and the same. So also
in both the cases, accused has examined two witnesses in
the shape of DW.2 and 3 and their evidence is also one
and the same. That means this complainant PW.1 has
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reiterated the contents of the complaint in the both the
cases in material particulars. So also DW.1 has also
spoken about his defence which has been set up at the
time of cross-examining PW.1.
14. When this PW.1 is under cross-examination, it
is suggested to PW.1 that, sister of the complainant was
possessing the land in survey No.78/3 and 77/1. For this,
PW.1 has given a positive answer. He admits that his
mother purchased the same. Further, throughout the
cross-examination, he has deposed ignorance with regard
to the loan raised from VSSN bank. He also deposed
ignorance to the suggestion that the loan was repaid on
behalf of his sister. A question was posed to PW.1 that,
the said lands were purchased by his mother in the year
1998. For this, he has given a guessing answer that it
might be. A suggestion was directed to this PW.1 that,
within one year, the loan was discharged. For this, PW.1
has deposed ignorance. He also deposed ignorance with
regard to the issuance of the notice by the bank and bank
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bringing the property for sale as loan was not discharged
etc.,
15. On reading the suggestions directed to PW.1, as
rightly observed by the Appellate Court, though he knew
about the purchase of the land by his mother from his
sister of the appellant but, he has deposed complete
ignorance with the regard to the other subsequent events.
It is further stated by him that, he has produced
documents to show that his sister has sold the lands to the
mother of the accused. When the argument was advanced
before the Appellate Court, no documents were produced.
Respondent-accused has examined the manager of the
said Bank in the shape of DW.2. DW.2 being the Manager
of the VSSN Bank has deposed in clear terms that in the
year 1998, Rs.75,000/- was borrowed as a loan by the
sister of the accused and a sum of Rs.69,000/- was still
due in the respect of the said loan. The respondent
purchased the land of the appellant's sister in the year
1998. At that time, as per the evidence of DW.2, loan was
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still outstanding. To that effect, the property was
mortgaged-pledged with the bank and bank was a
custodian of the said land.
16. It is his specific evidence in clear words that, in
his presence only, the accused handed over two cheques
to the complainant and at the time, one surety was also
present. He also stated that, at that time, it was decided
that once the loan was discharged, those cheques shall
have to be returned to the accused by the complainant.
He also states that, in the said two cheques, no dates
were mentioned. So, leaving the said date on the cheque
blank, the said cheques were signed and issued by the
accused to the complainant as security as per the evidence
spoken by DW.2. He identifies the counter foil.
17. It has come in the evidence of DW.2 that, as per
Ex.D.2 the loan was discharged. That means, this DW.2
was very much present when the talks took place in
between complainant and accused, that the accused had
to issue two cheques for Rs.40,000/- each towards the
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discharge of the loan which was outstanding with the Bank
of this DW.2. There was an assurance by the accused to
discharge the loan and therefore they have taken the said
cheques from the complainant. Even the complainant also
assured to return the said cheques after discharge of the
loan. Inspite of that, as per the defence of the accused,
complainant has not returned the said cheques, but
misused the same.
18. This evidence of DW.1 and 2 is further supported
by the evidence of DW.3 one of the witnesses who was
examined in both cases by name Belliyappa. On reading
the evidence of this DW.3 Belliyappa, according to him, he
was a surety for the loan borrowed by the sister of the
complainant from VSSN Bank. It is his evidence that, a
sum of Rs.69,000/- was borrowed as a loan pledging CRC.
The land was disposed of in the year 1998 itself to the
complainant and at that time, loan was still outstanding.
It is his further evidence that, as the loan was not
discharged, at that time, the Manager of the Bank
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Gananpathi i.e., DW.2 came to the house and approached
the complainant and the appellant to pay the loan amount.
In his presence and in the presence of the DW.2, it was
accused who gave two cheques each for Rs.40,000/-
without mentioning the date. Thereafter, accused had
discharged the said loan amount but, the complainant has
not returned the said cheques.
19. On reading the evidence of these three witnesses
and that of the evidence of PW.1, it shows that, evidence
of PW.1 is self - serving. To show that PW.1 has really
advanced the loan amount to the accused in the manner
stated by him and that the accused has issued those two
cheques, there is no evidence. Throughout the chief,
examination and through out the cross-examination there
is no mention that for what purpose the accused raised the
loan from the complainant. So also there is no pleading to
that effect in the complaint filed by him before Magistrate.
But, he states that, these cheques were issued by the
accused in discharge of the loan.
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20. The ingredients of the Section 138 of N.I. Act
are that, the cheque must have been issued in discharge
of the legally enforceable debt. Then, if the cheque is
presented, it is dishonoured for want of funds and other
grounds that are mentioned in Section 138 of N.I. Act. So
also, issuance of notice within a stipulated time as well as
non payment of said amount within time as well as filing of
a complaint within a stipulated time as prescribed under
the provisions of Section 138 of N.I. Act.
21. Here in this case, the first ingredient with
regard to legally enforceable debt is missing as per the
submission of the counsel for the accused-respondent. No
doubt, provisions of Section 138 of NI have been pressed
into service by the complainant. Section 138 of NI Act
reads as under:
"138. Dishonour of cheque for
insufficiency, etc., of funds in the account.--
Where any cheque drawn by a person on an
account maintained by him with a banker for
payment of any amount of money to another
person from out of that account for the discharge,
in whole or in part, of any debt or other liability, is
returned by the bank unpaid, either because of the
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amount of money standing to the credit of that
account is insufficient to honour the cheque or that
it exceeds the amount arranged to be paid from
that account by an agreement made with that
bank, such person shall be deemed to have
committed an offence and shall, without prejudice
to any other provision of this Act, be punished with
imprisonment for 4 [a term which may be extended
to two years'], or with fine which may extend to
twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall
apply unless--
(a) thecheque has been presented to the
bank within a period of six months from the date on
which it is drawn or within the period of its validity,
whichever is earlier;
(b) the payee or the holder in due course of
the cheque, as the case may be, makes a demand
for the payment of the said amount of money by
giving a notice; in writing, to the drawer of the
cheque, 5 [within thirty days] of the receipt of
information by him from the bank regarding the
return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make
the payment of the said amount of money to the
payee or, as the case may be, to the holder in due
course of the cheque, within fifteen days of the
receipt of the said notice.
Explanation.--For the purposes of this
section, "debt of other liability" means a legally
enforceable debt or other liability.
22. Even in CC No.1791/2002, Ex.D1 so produced
by the accused show that it is an extract of loan account of
appellant's sister. A similar extract is also produced in
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other cases. It shows that one Mrs.Radha, W/o.Veerappa
has raised the loan. The attention was drawn to the cross-
examination of PW.1. The Radha is none other than the
sister of the complainant. So, these documents produced
by the defence in the shape of Ex.D1 and D4 are not
disputed. The said document show about the date of loan
as well amount advanced and what was the amount due
together with interst and penalty. So the amount which
was shown as a due was Rs.69,180/- and interest so
accrued as on that date was Rs.24,734/- and a penal
interest is also shown as Rs.2,100/-. Thus, this account
extract shows that Rs.96,014/- was due as per the loan
account. Even the counterfoil of the cheque is also
produced as per Ex.P2 wherein it is mentioned as
Rs.96,014/-. So, from this evidence what inference can be
drawn is that, these cheques are issued by way of security
to the complainant and in discharge of the said loan
amount those cheques were issued with a condition that
once the loan is discharged, the complainant has to return
the said cheques to the accused. But, he has not done so.
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23. The evidence of DW.1, DW.2 and DW.3 is
corroborative in nature. To disprove the said evidence of
DW.3, except the self-serving evidence of PW.1
complainant, he has not placed any material on record. No
doubt the learned counsel for the complainant has relied
upon so many judgments before the first appellate Court.
Learned first appellate Court has come to the conclusion
that presumption under Sec.138 of NI Act is rebuttable
presumption. When presumption is rebutted by the
accused, then the complainant has to disprove the defence
of the accused.
24. On reading the provisions of Sec.118 of NI Act
as well as Sec.139 of NI Act, as per the presumptions
under these clauses, the consideration is supposed to have
been received on the date of the cheque. As per the
judgments of Hon'ble Apex Court and co-ordinate Benches
of this Court, if the complainant is able to prove about the
issuance of the cheque as well the signature that is not
sufficient. Law mandates that, a debt must be legally
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enforceable debt. It is not proved in this case. So the
presumption which is available to the complainant is
rebutted by the accused by adducing cogent evidence.
Further, in catena of judgments, it is held by the Hon'ble
Apex Court that, presumption in favour of a holder of a
cheque under Section 139 of the NI Act is rebuttable. For
that the evidence is to be lead by the accused. In the
absence of any such evidence, then the version of the
accused cannot be accepted. That means, to prove offence
under Section 138 of the NI Act, the ingredients that have
been stated under Section 138 and 139 of the NI Act are
to be satisfied. But, in this case though the complainant is
able to establish receipt of cheques, signature of the
accused as the cheques, but, his defence is that, those
cheques were issued not in discharge of loan but, by way
of security. To that effect, he has lead the evidence of
himself, as well as evidence of two witnesses i.e. Bank
Manager with whom the loan amount was outstanding so
also DW.3 surety for the loan raised. With regard to
rebuttable presumption, accused has lead the evidence.
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The complainants in both of these appeals have utterly
failed to prove the ingredients of Section 138 and 139 of
the NI Act.
25. In a case of present nature, the Hon'ble Apex
Court in (2023) Live law SC 46 in the case of Rajaram
S/o Sriramulu Naidu (since deceased) Through LRs. vs.
Maruthachalam (since deceased) Through LRs. have
categorically held with regard to the standard of proof. As
per this recent judgment, this Section 139 of the NI Act,
mandates a presumption that the cheque for the discharge
of a debt or a liability. The presumption of Sec.139 is a
rebuttable presumption and onus for rebutting the
presumption is that of preponderance of probabilities. To
rebut the presumption, it is open for the accused to rely
on the evidence lead by him or the accused can also rely
on the material submitted by the complainant not to raise
a probability points.
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26. If the above principle is applied to the present
facts of the case, in both the appeals, the standard of
proof in criminal proceedings differs from civil procedures.
Here in this case, except the self-serving evidence of PW.1
with regard to the handing over of the cheque and
signature of the accused, there is no evidence placed on
record that those cheques were issued in discharge of the
legally enforceable debt. Whereas, DW.1 being the
accused admits about his signature on the said cheques
that those cheques belong to him. But, he disputes the
very transaction of loan in between himself and the
accused. That means, DW.2's evidence is supported by
DW-3's evidence who is the surety. On reading the
evidence DW.2 and 3 together and conjointly, it shows
that the accused has rebutted the presumption available
to him under Section 138 of the NI Act. So, the learned
first appellate Court has rightly assessed the evidence
placed on record by the complainant and accused and has
come to a definite finding that the complainant has not at
all made out any case for conviction against the accused
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for the offences under Sec.138 of the NI Act in both the
cases.
27. The learned appellate Court has re-assessed the
evidence and evaluated the evidence and applied the
proper legal position by applying the judgments of Hon'ble
Apex Court. I do not find any factual or legal error in the
judgment of the first Appellate court in allowing the
appeals and acquitting the accused for the offence so
alleged.
28. There is no merit in both these appeals and
these appeals have to be dismissed. Therefore, points so
raised supra are answered in favour of the accused and
against the appellant-complainant.
Resultantly, I pass the following:
ORDER
(i) Both the appeals in Crl.A.314/2013 and
Crl.A.483/13 are hereby dismissed.
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(ii) The common judgment dated 8th August
2012 in Crl.A.Nos. 5 & 6/2009 by the
District and Sessions Judge, Kodagu-
Madikeri, is hereby confirmed.
(iii) Send back trial Court records along with a
copy of this judgment forthwith.
Sd/-
JUDGE
Sk/-
