Karnataka High Court
M/S. Gem Sugars Limited vs Mr.J.K.Nivasarkar on 1 March, 2024
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CRL.A.No.22 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF MARCH, 2024
BEFORE
THE HON'BLE MR JUSTICE ANIL B KATTI
CRIMINAL APPEAL No.22 OF 2014 (A)
BETWEEN:
M/s. GEM SUGARS LIMITED
HAVING ITS REGISTERED OFFICE AT
HOODI APARTMENTS
120, CUNNINGHAM ROAD
BANGALORE-560 052
REPRESENTED BY
ITS AUTHORISED SIGNATORY
Mr. RAJARAM KAMATH
...APPELLANT
(BY SRI.GAURAV, ADVOCATE FOR
SRI.ANAND MUTTALLI, ADVOCATE)
AND:
MR.J.K.NIVASARKAR
PROPRIETOR
M/s. J K ENTERPRISES
HAVING ITS OFFICE AT
NO.1, 'A' WING, 2ND FLOOR
MANGALMURTI COMPLEX
PUNE SINHAGAD ROAD, PARVATI
PUNE-411 030
...RESPONDENT
(BY SRI.S.SUSHANT VENKATESH PAI, ADVOCATE)
THIS APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C.,
PRAYING TO SET ASIDE THE ORDER DATED: 11.10.13 PASSED BY
THE XV ACMM, BANGALORE IN C.C.NO.27114/2009- ACQUITTING
THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF
N.I.ACT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
15.02.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
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CRL.A.No.22 of 2014
JUDGMENT
Appellant/complainant feeling aggrieved by judgment
of Trial Court on the file of XV Additional Chief
Metropolitan Magistrate, Bengaluru, in CC.No.27114/2009
dated 11.10.2013, preferred this appeal.
2. Parties to the appeal are referred with their
ranks as assigned in the Trial Court for the sake of
convenience.
3. Heard the arguments of both sides.
4. After hearing arguments of both sides and on
perusal of Trial Court records, so also the impugned
judgment under appeal, the following points arise for
consideration:
1) Whether the impugned judgment under appeal
passed by Trial Court for the offence punishable
under Section 138 of N.I.Act is perverse,
capricious and legally not sustainable?
2) Whether interference of this Court is required?
5. On careful perusal of oral and documentary
evidence placed on record, it would go to show that
complainant had placed orders for supply of Kirloskar
Compressor and various other materials worth Rs.85
Lakhs to one M/s. Yash Engineering Work, Ahmedanagar,
Maharashtra. The above said M/s. Yash Engineering Work
given sub-contract to accused by letter dated 29.03.2008
for a sum of Rs.7,30,106/-. Accused had agreed to take up
the work and deliver the machine within the time set up
by the complainant. Thereafter, M/s. Yash Engineering
Work informed the complainant about the sub-contract
given to the accused and requested to make payment of
Rs.7,30,106/- directly to accused. Complainant paid the
said amount of Rs.7,30,106/- by way of demand draft
dated 25.03.2008 for manufacturing the machine covered
under the agreement. However, accused could not deliver
the machine as agreed. When complainant contacted
M/s.Yash Engineering Work, a meeting was arranged on
01.07.2009 at the office premises of accused. In the said
meeting, it was agreed that accused shall deliver the
machine within three weeks from 01.07.2009. In the event
of accused fails to deliver the machine will refund the
amount of Rs.7,30,106/- to the complainant. Accused for
lawful discharge of the said debt issued cheque bearing
No.654808 dated 01.08.2009 for Rs.7,30,106/-, Ex.P4.
Complainant presented the said cheque through its Banker
- State Bank of Mysuru on 01.08.2009. However, the said
cheque was returned with the Bank endorsement as
"Funds Insufficient" dated 04.08.2009 - Ex.P5.
Complainant issued demand notice through RPAD and UCP
- Ex.P6. The receipt of UCP is produced at Ex.P7 and the
postal receipt is produced at Ex.P8. The demand notice is
duly served to the accused vide acknowledgement card -
Ex.P9. If the above referred documents are perused and
appreciated with the oral evidence of PW.1, then, it would
go to show that complainant has complied all the
necessary legal requirements in terms of Section 138(a) to
(c) of Negotiable Instruments Act, 1881 (hereinafter for
brevity referred to as "N.I.Act"). Complainant within a
period of one month from the date of accrual of cause of
action, has filed the complaint on 23.09.2009 in terms of
Section 142(1)(b) of N.I.Act. Therefore, statutory
presumption in terms of Sections 118 and 139 of the NI
Act will have to be drawn in favour of the complainant.
6. In this context of the matter, it is useful to refer
the judgment of Hon'ble Apex Court in APS Forex
Services Pvt. Ltd. Vs. Shakti International Fashion
Linkers and others reported in AIR 2020 SC 945,
wherein it has been observed and held that once the
issuance of cheque with signature on cheque is admitted,
there is always a presumption in favour of complainant
that there exist legally enforceable debt or liability. Plea
by accused that cheque was given by way of security and
same has been misused by complainant is not tenable.
7. It is also profitable to refer another judgment
of Hon'ble Apex Court in P. Rasiya vs. Abdul Nazer and
another reported in 2022 SCC OnLine SC 1131,
wherein it has been observed and held that:-
" Once the initial burden is discharged by the
complainant that the cheque was issued by the
accused and signature of accused on the
cheque is not disputed, then in that case, the
onus will shift upon the accused to prove the
contrary that the cheque was not for discharge
of any debt or other liability. The presumption
under Section 139 of N.I. Act is statutory
presumption and thereafter, once it is
presumed that the cheque is issued in whole or
in part of any debt or other liability which is in
favour of the complainant/holder of the cheque,
in that case it is for the accused to prove the
contrary."
In view of the principles enunciated in the aforementioned
two judgments of Hon'ble Apex Court, it is evident that
when once issuance of cheque with signature of accused
on the account maintained by him is admitted or proved
then statutory presumption in terms of Sections 118 and
139 of N.I. Act will have to be drawn. Now, it is up to the
accused to place rebuttal evidence to displace the
statutory presumption available in favour of Complainant
in terms of Sections 118 and 139 of N.I. Act. The burden
of placing rebuttal evidence to displace the statutory
presumption is on the accused.
8. Complainant had placed orders for supply of
Kirloskar Compressor and various other materials to one
M/s. Yash Engineering Work, Ahmedanagar, Maharashtra
and inturn, M/s. Yash Engineering Work sub-contracted
accused for supply of the machinery by letter dated
29.03.2008 for Rs.7,30,106/-, further complainant was
requested to make direct payment to the accused.
Therefore, complainant made payment of Rs.7,30,106/- by
way of demand draft dated 25.03.2008. Accused did not
deliver the machinery within the stipulated time.
Therefore, there was meeting between complainant,
M/s. Yash Engineering Work and accused in the office of
accused on 01.07.2009, the minutes of the meeting are
produced at Ex.P3 dated 01.07.2009. It was further
agreed to supply the machine ordered by the complainant
within three weeks i.e., 22.07.2009. The minutes of the
meeting - Ex.P3 further would go to show that accused
had issued the cheque bearing No.654807 dated
01.08.2009 for Rs.1,40,000/- in favour of M/s. Yash
Engineering Work of ICICI Bank and second cheque
bearing No.654808 was issued in favour of complainant on
the same day. The issuance of cheque with signature of
accused - Ex.P4 on the day of holding the meeting are the
facts not in dispute and the same can also borne out from
the material evidence brought on record.
9. It is the defence of accused that in the event of
non supply of machinery within 22.08.2009 given cheque
for refund of money paid by the complainant mentioning
the date as 01.09.2009. Complainant has to inform the
accused before presenting the cheque. Complainant
without waiting till 01.09.2009, on the maturity date of
cheque has altered the month "9" as "8" and presented
the cheque without informing the accused by altering the
month and filed this false case.
10. DW.1 during the course of his evidence has
deposed to the effect that he has issued the cheque -
Ex.P4 by mentioning the date as 01.09.2009 on the day
when the minutes of the meeting have been recorded on
01.07.2009 - Ex.P3. In support of such contention
produced the carbon copy of minutes of meeting dated
01.07.2009 furnished to the accused Ex.D.1. Complainant
has produced the very same minutes of meeting dated
01.07.2009 - Ex.P3. On careful perusal of the date
mentioned on two cheques issued by accused, it would
clearly goes to show that the date is mentioned as
01.09.2009 in Ex.D.1 which has not been altered.
Whereas, the very same document produced by the
complainant - Ex.P3 would go to show that the date
01.09.2009 in both cheques are altered as 01.08.2009.
Complainant has presented the said cheque through its
Banker on the same day on 01.08.2009 and the same was
dishonoured with the endorsement of the Bank as "Funds
Insufficient" - Ex.P5. The liability of accused to pay the
amount covered under cheque - Ex.P4 would arise only on
or after 01.09.2009. Whereas, complainant by altering the
date as 01.08.2009, has presented the said cheque
through it's Banker for collection, which is premature to
the promise made by accused of accepting the liability to
pay the amount covered cheque - Ex.P4.
11. The question is as to whether the alteration of
date "01.09.2009" as "01.08.2009" amounts to a material
alteration in terms of Section 87 of the NI Act has to be
considered. In this context, it is profitable to refer Section
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87 of the NI Act for ready reference to better appreciate
the evidence as follows:
"87. Effect of material alteration.--Any
material alteration of a negotiable instrument
renders the same void as against any one who is a
party thereto at the time of making such alteration
and does not consent thereto, unless it was made in
order to carry out the common intention of the
original parties;
Alteration by indorsee.--And any such
alteration, if made by an indorsee, discharges his
indorser from all liability to him in respect of the
consideration thereof.
The provisions of this section are subject to
those of sections 20, 49, 86 and 125."
In the present case, on bare perusal of cheque - Ex.P4
and the minutes of proceedings produced by accused -
Ex.D1 dated 01.07.2009, on the face of it, would go to
show that there is material alteration of the month shown
in the cheque - Ex.P4, the month "9" is altered as "8".
This alteration could have been accepted, if it was
indorsed by the accused with his knowledge that such
alteration was made in his presence and he was
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consenting party for such alteration. However, the
alteration of the month is not indorsed by the accused.
This alteration has been done by the holder of cheque,
who is beneficiary under the cheque to bring within the
ambit of Section 138 of the NI Act attracting penal action
to cover up the presentation of cheque on 01.08.2009 and
on the basis of dishonour of cheque vide Bank
endorsement - Ex.P5 dated 04.08.2008, the complaint is
filed for penal action in terms of Section 138 of the NI Act.
In fact and in reality the liability of accused promised
under the instrument of cheque - Ex.P4 commences only
on or after 01.09.2009 as per the unaltered date of
issuance of cheque furnished to the accused - Ex.D1.
Therefore, there was no cause of action for the
complainant on the preponed presentation of cheque -
Ex.P4 than what it was issued on 01.09.2009. In view of
the fact that complainant had filed the complaint on the
basis of the altered date 01.08.2009 in Ex.P4 and its
presentation to the Bank on the same day which came to
be dishonoured vide bank endorsement - Ex.P5 dated
04.08.2009. In view of the above referred fact and the
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complainant being beneficiary under cheque - Ex.P4, it will
have to be inferred from the evidence on record that it
was well within the knowledge of complainant regarding
alteration of the date mentioned in the cheque - Ex.P4.
Therefore, there was no any legally enforceable debt of
accused as on the altered date mentioned in the cheque -
Ex.P4, since the liability of accused to pay the amount
covered under cheque would commence only on or after
01.09.2009. The said fact is further corroborated by the
carbon copy of the document furnished to the accused -
Ex.D1.
12. Learned counsel for accused in support of his
contention that material alteration in the cheque regarding
preponement presentation of cheque without the
knowledge of accused and without indorsement would go
to the root of the case and no any penal action in terms of
Section 138 of the NI Act can be maintained relied on the
following judgments of this Court:
i) Crl.R.P.No.592/2019, D.D.09.06.2022
(Herman Castelino Vs. Dr.Suresh Kudva);
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ii) Crl.R.P.No.906/2013, D.D.27.06.2022
(D.Chandraiah Vs. K.Gaddigeppa);
iii) Crl.R.P.No.395/2015, D.D.14.07.2022
(K.J.Shaibe Jose Vs. T.N.Sukumaran);
iv) H.T.Kenchegowda Vs. S.D.Umesh, reported
in MANU/KA/2898/2019;
v) Crl.A.No.2840/2013, D.D.22.12.2020
(Smt.Shivageetha Vs. Smt.Savita
Chandrashekhar);
vi) Crl.A.No.2218/2006 D.D.17.02.2012
(K.M.Nagaraj Vs. P.C.Govindegowda);
vii) Crl.A.No.1621/2007 D.D.13.03.2014
(Sri.Yaswanth Parameshwar Mangarshi Vs.
Sri.Venkatramana Ganapati Hegde) and
viii) Crl.A.No.1214/2010 D.D.02.03.2020
(Sri.R.Vidyashankar Vs. Smt.Gayathridevi)
In view of the principles enunciated in the aforementioned
judgments of this Court, it is evident that where there is
material alteration in the cheque without indorsement of
drawer of cheque with his express consent becomes void
as against any one who is a party thereto at the time of
making such alteration and does not consent thereto,
unless it was made in order to carry out the common
intention of the original parties.
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13. In the present case on hand, the material
alteration of the month mentioned in the cheque - Ex.P4,
without necessary indorsement of the drawer of cheque
becomes void and no any liability can be fixed against the
accused covered under cheque - Ex.P4. The evidence of
DWs.1 and 2 coupled with the documents referred above
would go to show that complainant being beneficiary of
cheque - Ex.P4 though being aware of the proceedings of
the meeting held on 01.07.2009 and both cheques were
issued on 01.09.2009 has materially altered the month of
cheque making it as prematured presentation of the
cheque for bringing an action against the accused for the
offence under Section 138 of the NI Act. Therefore, on the
basis of such void negotiable instrument, no penal action
can be maintained in terms of Section 138 of the NI Act.
The Trial Court has rightly appreciated the oral and
documentary evidence placed on record and has arrived to
a just and proper conclusion in holding that accused has
probabalised his defense out of the rebuttal evidence
placed on record and as such the statutory presumption
available in favour of complainant stood rebutted. The said
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finding recorded by the Trial Court is based on the
material evidence and proper appreciation of evidence on
record. Therefore, there are no any valid ground to deviate
from the finding recorded by the Trial Court.
Consequently, proceed to pass the following:
ORDER
Appeal filed by appellant/complainant is hereby
dismissed as devoid of merits.
Registry to send back the records to Trial Court with
a copy of this order.
SD/-
JUDGE
cp*
