Karnataka High Court

Sri M R Narasimha Murthy vs M/S Elgi Rubber Company Limited on 7 May, 2024

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                                   CRL.RP No. 391 of 2022


  IN THE HIGH COURT OF KARNATAKA AT BENGALURU
       DATED THIS THE 07TH DAY OF MAY, 2024
                       BEFORE
        THE HON'BLE MR. JUSTICE S RACHAIAH
   CRIMINAL REVISION PETITION NO. 391 OF 2022
BETWEEN:
   SRI. M R NARASIMHA MURTHY
   AUTHORIZED SIGNATORY OF
   M/S SAM TOURIST
   AGED ABOUT 40 YEARS
   NO. 24, ANANTH ARCHADE
   A.V ROAD, KALASIPALYA
   BENGALURU - 560 002.
                                             ...PETITIONER

(BY SRI. SAMUEL S DANDIN, ADVOCATE)

AND:
   M/S ELGI RUBBER COMPANY LIMITED
   (RETREADING DIVISION)
   NO.52, J.C INDUSTRIAL LAYOUT
   KANAKAPURA ROAD
   YELACHENAHALLI
   BENGALURU - 560 062.
   REPRESENTED BY ITS
   AUTHORIZED JUNIOR EXECUTIVE
   SRI. S SARAVANA KUMAR.
                                            ...RESPONDENT

(BY SRI. NARAYANA T H, ADVOCATE)

     THIS CRL.RP IS FILED U/S. 397 R/W 401 CR.P.C
PRAYING TO SET ASIDE THE JUDGMENT, CONVICTION AND
SENTENCE PASSED IN C.C.NO.1526/2018 DATED 29.11.2018
PASSED BY THE XXIV ADDITIONAL SMALL CAUSE JUDGE &
XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE,
BENGALURU AND ETC.,

     THIS CRIMINAL REVISION PETITION HAVING BEEN
HEARD AND RESERVED ON 20.02.2024, COMING ON FOR
PRONOUNCEMENT OF ORDER, THIS DAY, THE COURT MADE
THE FOLLOWING:
                                     -2-
                                            CRL.RP No. 391 of 2022




                                   ORDER

1. This Criminal Revision Petition is filed by the

petitioner / accused, being aggrieved by the judgment of

conviction and order of sentence dated 29.11.2018 in

C.C.No.1526/2018 on the file of XXIV Additional Small Causes

Judge and XXII Additional Chief Metropolitan Magistrate (SCCH-

26) at Bengaluru and its confirmation judgment and order

dated 26.11.2021 in Crl.A.No.33/2019 on the file of the LX

Additional City Civil and Sessions Judge, Bengaluru (CCH-61),

seeking to set aside the concurrent findings recorded by the

Courts below, wherein the petitioner / accused is convicted for

the offence under Section 138 of Negotiable Instruments Act

(for short 'N.I. Act').

2. The rank of the parties in the Trial Court will be

considered henceforth for convenience.

Briefs facts of the case:-

3. The complainant is a registered company and doing

business of sales of tyres. It is stated in the complaint that the

accused had placed order for supply of tyres as per the

invoices. The complainant supplied the tyres as per the

invoices and the amount for having supplied the tyres was to

be paid to the complainant. As per the invoice, the

complainant supplied tyres worth of Rs.4,49,000/-. To clear

the said balance, the accused is said to have issued cheques to

the complainant. When those cheques were presented for

encashment, the cheques were returned with an endorsement

as 'funds insufficient'. Thereafter, the complainant issued legal

notice to the accused and asked him to make payment,

however, the accused even after receipt of notice, neither

replied nor repaid the amount. Hence, complainant filed a

complaint before the Jurisdictional Magistrate having

jurisdiction.

4. To prove the case of the complainant, the

complainant himself examined as PW.1 and got marked 10

documents as Exs.P1 to P10. On the other hand, the accused

did not chose to lead any evidence. The Trial Court after

appreciating the oral and documentary evidence on record,

recorded the conviction of the accused and the same has been

confirmed by the Appellate Court in the appeal filed by the

accused/appellant. Hence this revision petition.

5. Heard Sri. Samuel S Dandin, learned counsel for

petitioner and Sri. Narayana T H, learned counsel for the

respondent.

6. It is the submission of learned counsel for petitioner

that he had not purchased any tyres nor raised any invoices.

In fact, the cheques were issued as security for other

transactions, other than any debt or liability. Therefore, the

accused need not pay the amounts stated in the cheques,

however, the Trial Court and the Appellate Court failed to

appreciate the evidence in such manner and recorded the

conviction which is erroneous and bad in law.

7. It is further submitted that the complainant has not

produced any documents for having raised invoices. In the

absence of cogent documents to show that the complainant had

supplied the tyres to the accused, mere possession of the

cheques would not create any liability. The accused in the

cross-examination has contended and elicited that the

complainant did not supply the tyres worth of Rs.4,49,000/-.

Therefore, the accused has rebutted the presumption by raising

the probable defence and in fact the complainant failed to

prove the debt or liability beyond all reasonable doubt,

however, the Courts below have committed error in raising the

presumption in the absence of proof of liability. Therefore, the

concurrent findings are required to be set aside. Making such

submission, learned counsel for petitioner prays to allow the

petition.

8. Per contra, learned counsel for respondent

vehemently justified the concurrent findings and submitted that

the signatures on the cheques and issuance of the cheques

have been admitted by the accused. It is settled principle of

law that once signatures and issuance of the cheques are

admitted, the Court has to raise the presumption that those

cheques were issued for the purpose of clearing debt or

liability. Accordingly, both the Courts have concurrently held

that the accused found guilty for the offences under Section

138 of N.I Act.

9. It is further submitted that mere non-production of

documents for having supplied the tyres would not take away

the case of the complainant as the complainant had paid the

tax like KST and CST to the Government for having sold the

tyres to the accused.

10. It is further submitted that the accused purchased

the tyres from the complainant and issued cheques to clear the

debt and the transaction has been admitted by the accused.

Therefore, the conviction has been recorded by the Trial Court

and the said conviction has been affirmed by the Appellate

Court. Hence, there is no error or illegality committed by the

Courts below in recording the conviction. Making such

submission, learned counsel for respondent prays to dismiss

the petition.

11. After having heard learned counsel for the

respective parties and also perused the findings of the Courts

below, it is relevant to refer to the evidence of PW.1 to

ascertain as to whether any error committed by the Courts

below, not only in appreciating the evidence but also applying

the proper law on the Negotiable Instruments Act or not.

12. It is settled principle of law that initially, the

accused has to rebut the presumption by leading the cogent

evidence as the complainant is protected by the presumption

envisaged under Section 139 of N.I. Act.

13. In the present case, the complainant stated in his

complaint that the accused had purchased the tyres for a sum

of Rs.4,49,000/- and issued cheques to clear the debt.

According to complainant, the accused had raised invoices to

purchase the tyres, however, on perusal of the documents

produced by the complainant, no such invoices are produced to

substantiate the contention. In the absence of relevant

material documents for having sold the tyres, in my considered

opinion, the complainant has not proved the transaction.

14. Be that as it may, the accused had contended that

the transaction was being done with the complainant. The

accused used to purchase the tyres and also giving old tyres for

the purpose of retreading the tyres. The complainant for the

purpose of security said to have received three cheques from

the accused. However, those cheques have been misused and

produced for encashment in order to gain wrongfully.

15. In the cross examination of PW.1, certain

admissions have been made by him that usually the invoices

would be raised at the time of transactions and KST and CST

would also be paid for having sold the tyres. PW.1 further

admitted that he did not disclose as to how many tyres were

sold to the accused and how much amount the accused was to

be paid to PW.1. Further admitted that PW.1 did not produce

any documents or invoices for having sold the tyres to the

accused. After having considered the admission of PW.1 in the

cross-examination, I am of the considered opinion that the

contention of the accused that the cheques were issued as

security for the purpose of transaction has to be accepted as

true. Thus, the accused has successfully rebutted the

presumption. However, the complainant has failed to prove the

transaction as he could not produce any documents for having

sold the tyres. Therefore, I am of the considered opinion that,

both the Courts have erred in not only appreciating the

evidence of PW.1, but also failed to apply proper law on the

Negotiable Instruments Act., hence, the concurrent findings are

deserved to be set aside.

16. In the light of the observations made above, I

proceed to pass the following:-

ORDER

(i) The Criminal Revision Petition is allowed.

(ii) The judgment of conviction and order of

sentence dated 29.11.2018 in C.C.No.1526/2018

on the file of XXIV Additional Small Causes Judge

and XXII Additional Chief Metropolitan Magistrate

(SCCH-26) at Bengaluru and its confirmation

judgment and order dated 26.11.2021 in

Crl.A.No.33/2019 on the file of the LX Additional

City Civil and Sessions Judge, Bengaluru (CCH-