Karnataka High Court
M/S Emmvee Solar System Pvt Ltd vs Sri Jithendra Jain on 7 November, 2024
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CRL.A No. 568 of 2015
C/W CRL.A No. 570 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF NOVEMBER, 2024
BEFORE
THE HON'BLE MRS JUSTICE M G UMA
CRIMINAL APPEAL NO. 568 OF 2015 (A)
C/W
CRIMINAL APPEAL NO. 570 OF 2015
BETWEEN:
M/S. EMMVEE SOLAR SYSTEM PVT. LTD.,
OFFICE AT NO.55, 6TH MAIN ROAD,
11TH CROSS, LAKSHMAIAH BLOCK,
GANGANAGAR, BANGALORE - 560 024
(DULY REPRESENTED BY ITS COMPANY
SECRETARY SRI. MUNJUNATH ULLAR,
S/O SESHAGIRI)
...COMMON APPELLANT
(BY SRI. K.N. HARISH BABU., ADVOCATE)
Digitally signed
by NANDINI B AND:
G
Location: high SRI JITHENDRA JAIN,
court of PROPRIETOR, AGED: MAJOR
karnataka
M/S. SOLAR CENTREE,
NO.15/19, YENOPAYA MAIL,
GROUND FLOOR, KADRI ROAD,
NEAR SYNDICATE BANK,
MANGALORE - 575 001.
...COMMON RESPONDENT
(BY SRI. PRASANNA .K., FOR
SRI. K. CHANDRANATH ARIGA, ADVOCATES)
CRL.A.NO. 568/2015 IS FILED U/S.378(4) CR.P.C PRAYING
TO SET ASIDE THE ORDER OF ACQUITTAL PASSED BY THE P.O.,
F.T.C.-IV, BANGALORE, IN CRL.A.NO.190/2014 BY CONFIRMING THE
ORDER OF CONVICTION PASSED BY THE XIII A.C.M.M., BANGALORE
IN C.C.NO.13188/2009 FOR OFFENCE P/U/S 138 OF N.I.ACT.
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CRL.A No. 568 of 2015
C/W CRL.A No. 570 of 2015
CRL.A.NO.570/2015 IS FILED U/S.378(4) CR.P.C PRAYING TO
SET ASIDE THE ORDER OF ACQUITTAL PASSED BY THE P.O., F.T.C.-
IV, BANGALORE, BY CONFIRMING THE ORDER OF CONVICTION
PASSED BY THE XIII A.C.M.M., BANGALORE FOR OFFENCE P/U/S 138
OF N.I.ACT.
THESE CRIMINAL APPEALS, COMING ON FOR ADMISSION,
THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MRS JUSTICE M G UMA
COMMON ORAL JUDGMENT
The complainant in C.C.No.10754/2009 and
C.C.No.13188/2009, on the file of the learned XIII Additional
Metropolitan Magistrate, Bangalore is impugning the judgments
dated 30.01.2015 passed in Crl.A.No.189/2014 and
Crl.A.No.190/2014 respectively, on the file of the learned Fast
Track Court - IV, Bangalore, allowing the appeals by setting
aside the judgments passed by the Trial Court and acquitting
the accused for the offence punishable under Section 138 of NI
Act.
2. For the sake of convenience, the parties shall be
referred to as per their rank and status before the Trial Court.
3. Brief facts of the case are that, the complainant
filed the private complaint in PCR No.18414/2008 against the
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accused, alleging commission of the offence punishable under
Section 138 of NI Act. It is contended by the complainant that
the accused had issued the cheque bearing No.072328 dated
27.09.2008 for a sum of Rs.2,00,000/- towards discharge of
part of his liability. He assured to honor the cheque on
presentation. When the cheque was presented for encashment,
the same was dishonoured as payment stopped by the drawer.
Legal notice was issued to the accused informing him about
dishonour of the cheque and calling upon him to pay the cheque
amount. In spite of service of legal notice, the accused has not
repaid the cheque amount. Thereby, he has committed the
offence punishable under Section 138 of NI Act. Accordingly, he
requested the Trial Court to take cognizance of the offence and
to initiate legal action.
4. Accordingly, the complainant filed another private
complaint in PCR No.4518/2009 against the accused, making
similar allegations and contended that the accused had issued
the cheque bearing No.072329 dated 15.12.2008 for a sum of
Rs.2,00,000/- and another cheque bearing No.072330 dated
28.12.2008 for Rs.2,00,000/- towards discharge of part of his
liability. On presentation, same were dishonoured as funds
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insufficient in the account of the accused. Legal notice was
issued to the accused, calling upon him to pay the amount.
Instead of paying the cheque amount, the accused had issued
untenable reply and thereby, he has committed the offence
punishable under Section 138 of NI Act. Accordingly, he
requested the Trial Court to take cognizance of the offence and
to initiate legal action.
5. The Trial Court took cognizance of the offence in
both the cases and registered C.C.No.10754/2009 and
C.C.No.13188/2009 respectively and summoned the accused.
The accused had appeared before the Trial Court and pleaded
not guilty. The complainant examined himself as PW-1 and got
marked Ex.P1 to P15 in support of his contention. The accused
has denied all the incriminating materials available on record in
his statement recorded under Section 313 of Cr.PC. He
examined himself as DW-1 and got marked Ex.D1 to D5 in
support of his defence in C.C.No.13188/2009.
6. Similarly, the complainant has examined himself as
PW-1 and got marked Ex.P1 to P12 in support of his contention.
The accused has denied all the incriminating materials available
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on record in his statement recorded under Section 313 of Cr.PC.
He examined himself as DW-1 and got marked Ex.D1 to D6 in
support of his defence in C.C.No.10754/2009.
7. The Trial Court after taking into consideration all
theses materials on record, passed similar judgments in both
the cases on 29.01.2014 holding that, the complainant is
successful in proving the guilt of the accused beyond reasonable
doubt and accordingly convicted the accused for the offence
punishable under Section 138 of NI Act, directing him to pay
fine of Rs.4,05,000/- and in default to undergo simple
imprisonment for 6 months in C.C.No.13188/2009. Similarly, he
was sentenced to pay fine of Rs.2,05,000/- and in default to
undergo simple imprisonment for 6 months in
C.C.No.10754/2009.
8. Being aggrieved by the same, the accused had
preferred Crl.A.No.189/2014 and Crl.A.No.190/2014 before the
First Appellate Court. The First Appellate Court on re-
appreciation of the materials on record came to the conclusion
that the complainant is not successful in proving the existence
of legally recoverable debt and therefore, the accused is entitled
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for acquittal. Accordingly, both the appeals were allowed. The
impugned judgments of conviction passed by the Trial Court
were set aside and the accused was acquitted in both the cases.
Being aggrieved by the same, the complainant is before this
Court.
9. Heard Sri K.N. Harish Babu, learned counsel for the
appellant and Sri. Prasanna K, learned counsel for Sri. K.
Chandranath Ariga, learned counsel for respondents. Perused
the materials including the Trial Court records.
10. Learned counsel for the appellant contended that
the complainant is the manufacturer of Solar Water Heaters and
the accused was the dealer. The accused used to purchase Solar
Water Heaters on credit basis from 2004 till March 2008. An
amount of Rs.6,00,000/- was due from the accused. Towards,
repayment of the same, he had issued the cheques bearing Nos.
072328, 072329 and 072330 for Rs.2,00,000/- each, which are
referred to in both these cases. Admittedly, the cheques were
dishonoured and the legal notice issued by the complainant was
served on the accused. The accused has given an untenable
reply as per Ex.P7 produced in C.C.No.10754/2009.
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11. Learned counsel contended that the accused has
admitted dealing with the complainant. He also admits that 3
cheques belongs to his bank account and bears his signatures.
Under such circumstances, the presumption under Sections 118
and 139 of NI Act would arise and the burden shifts on the
accused to rebut the presumption. But the accused has not
rebutted the presumption. Therefore, he is liable for conviction.
The Trial Court had rightly convicted the accused. But the First
Appellate Court committed an error in acquitting the accused.
Hence, he prays for allowing both the appeals and to convict the
accused in the interest of the justice.
12. Per contra, learned counsel for the respondent
opposing the appeals contended that the complainant was the
manufacturer of Solar Water Heater and the accused was the
dealer. Their relationship was strained during March-2008.
Hence, the accused stopped transacting with the complainant.
But the complainant again approached the accused and
requested to transact with him by placing the orders. In that
regard, 3 blank cheques referred to by the complainant were
issued as security. The same were misused by the complainant.
The First Appellate Court on re-appreciation of the materials on
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record came to the right conclusion that the complainant has not
proved existence of legally recoverable debt.
13. Learned counsel submitted that the complainant
has not stated as to how there was due an amount of
Rs.6,00,000/- from the accused. When there is no details of the
amount that was due, the complainant is not entitled for any
relief. The judgment passed by the First Appellate Court is just
and proper and it do not call for interference by this Court.
Accordingly, prays for dismissal of the appeals.
14. In view of the rival contentions urged by learned
counsel for both the parties, the point that would arise for my
consideration is:
"Whether the impugned judgments of
acquittal passed by the First Appellate Court
suffers from perversity or illegality and calls for
interference by this Court?"
My answer to the above point is in the 'Affirmative' and
pass the following:
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REASONS
15. The relationship between the complainant and the
accused that the complainant being the manufacturer of Solar
Water Heaters and the accused being the dealer, purchasing the
water heaters, is not in dispute. It is also not in dispute that the
accused had issued 3 cheques referred to above, which are
marked as Exs.P1 and P2 in C.C.No.13188/2009 and Ex.P1 in
C.C.No.10754/2009, with his signatures. It is also admitted that
all the 3 cheques were dishonoured and the legal notice was
served on the accused. Ex.P7 in C.C.No.10754/2009 is the reply
notice issued by the accused.
16. When the accused admits issuance of the cheque,
the presumption under Sections 118 and 139 of NI Act would
arise. Even when the accused takes the defence that the blank
cheques were issued as a security with his signature, the
presumption under Section 139 of NI Act would arise. This
position of law is made very clear by the Hon'ble Apex Court in
Bir Singh Vs Mukesh Kumar1 in paragraph Nos. 34 and 36
reads as under:
(2019) 4 SCC 197
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"34. If a signed blank cheque is voluntarily
presented to a payee, towards some payment, the
payee may fill up the amount and other particulars.
This in itself would not invalidate the cheque. The onus
would still be on the accused to prove that the cheque
was not in discharge of a debt or liability by adducing
evidence.
35.xxxx
36. Even a blank cheque leaf, voluntarily signed
and handed over by the accused, which is towards
some payment, would attract presumption under
Section 139 of the Negotiable Instruments Act, in the
absence of any cogent evidence to show that the
cheque was not issued in discharge of a debt."
17. Once the legal presumption under Sections 118 and
139 of NI Act has arises, the initial burden on the complainant
gets discharged and the burden shifts on the accused to rebut
the legal presumption. The accused is required to raise the
defence and probabalize the same. Even though the degree of
proof on the accused is much lesser as it is only preponderance
of probabilities, the accused is required to prove regarding his
defence in order to probabalize his defence. In this regard,
reliances could be placed on the decision of the Hon'ble Apex
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Court in Rohitbhai J Patel vs The State Of Gujarat2 in
paragraph Nos. 17 and 18 as under:
" 17. On the aspects relating to preponderance of
probabilities, the accused has to bring on record such
facts and such circumstances which may lead the
Court to conclude either that the consideration did not
exist or that its non-existence was so probable that a
prudent man would, under the circumstances of the
case, act upon the plea that the consideration did not
exist. This Court has, time and again, emphasised that
though there may not be sufficient negative evidence
which could be brought on record by the accused to
discharge his burden, yet mere denial would not fulfil
the requirements of rebuttal as envisaged under
Sections 118 and 139 of the NI Act. This Court stated
the principles in Kumar Exports [Kumar
Exports v. Sharma Carpets]
"20. The accused in a trial under Section 138 of
the Act has two options. He can either show that
consideration and debt did not exist or that under
the particular circumstances of the case the non-
existence of consideration and debt is so probable
that a prudent man ought to suppose that no
consideration and debt existed. To rebut the
statutory presumptions an accused is not expected
to prove his defence beyond reasonable doubt as is
expected of the complainant in a criminal trial. The
accused may adduce direct evidence to prove that
(2019) 18 SCC 106
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the note in question was not supported by
consideration and that there was no debt or liability
to be discharged by him. However, the court need
not insist in every case that the accused should
disprove the non-existence of consideration and debt
by leading direct evidence because the existence of
negative evidence is neither possible nor
contemplated. At the same time, it is clear that bare
denial of the passing of the consideration and
existence of debt, apparently would not serve the
purpose of the accused. Something which is probable
has to be brought on record for getting the burden of
proof shifted to the complainant. To disprove the
presumptions, the accused should bring on record
such facts and circumstances, upon consideration of
which, the court may either believe that the
consideration and debt did not exist or their non-
existence was so probable that a prudent man would
under the circumstances of the case, act upon the
plea that they did not exist. Apart from adducing
direct evidence to prove that the note in question
was not supported by consideration or that he had
not incurred any debt or liability, the accused may
also rely upon circumstantial evidence and if the
circumstances so relied upon are compelling, the
burden may likewise shift again on to the
complainant. The accused may also rely upon
presumptions of fact, for instance, those mentioned
in Section 114 of the Evidence Act to rebut the
presumptions arising under Sections 118 and 139 of
the Act.
21. The accused has also an option to prove the
non-existence of consideration and debt or liability
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either by letting in evidence or in some clear and
exceptional cases, from the case set out by the
complainant, that is, the averments in the complaint,
the case set out in the statutory notice and evidence
adduced by the complainant during the trial. Once
such rebuttal evidence is adduced and accepted by
the court, having regard to all the circumstances of
the case and the preponderance of probabilities, the
evidential burden shifts back to the complainant and,
therefore, the presumptions under Sections 118 and
139 of the Act will not again come to the
complainant's rescue."
18. In the case at hand, even after purportedly
drawing the presumption under Section 139 of the NI
Act, the trial court proceeded to question the want of
evidence on the part of the complainant as regards the
source of funds for advancing loan to the accused and
want of examination of relevant witnesses who
allegedly extended him money for advancing it to the
accused. This approach of the trial court had been at
variance with the principles of presumption in law.
After such presumption, the onus shifted to the
accused and unless the accused had discharged the
onus by bringing on record such facts and
circumstances as to show the preponderance of
probabilities tilting in his favour, any doubt on the
complainant's case could not have been raised for want
of evidence regarding the source of funds for
advancing loan to the appellant-accused. The aspect
relevant for consideration had been as to whether the
appellant-accused has brought on record such
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facts/material/circumstances which could be of a
reasonably probable defence."
(emphasis supplied)
18. It is also relevant to refer to the decision of the
Hon'ble Apex Court in M/s Kalamani Tex and another Vs P
Balasubramanian , wherein it is held in paragraph Nos. 13, 15
and 17 as under:
"13. Adverting to the case in hand, we find on a
plain reading of its judgment that the trial court
completely overlooked the provisions and failed to
appreciate the statutory presumption drawn under
Section 118 and Section 139 of NIA. The statute
mandates that once the signature(s) of an accused on
the cheque/negotiable instrument are established, then
these "reverse onus" clauses become operative. In
such a situation, the obligation shifts upon the accused
to discharge the presumption imposed upon him. This
point of law has been crystallised by this Court
in Rohitbhai Jivanlal Patel v. State of Gujarat para 18)
"18. In the case at hand, even after purportedly
drawing the presumption under Section 139 of the
NI Act, the trial court proceeded to question the
want of evidence on the part of the complainant as
regards the source of funds for advancing loan to the
accused and want of examination of relevant
(2021) 5 SCC 283
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witnesses who allegedly extended him money for
advancing it to the accused. This approach of the
trial court had been at variance with the principles of
presumption in law. After such presumption, the
onus shifted to the accused and unless the accused
had discharged the onus by bringing on record such
facts and circumstances as to show the
preponderance of probabilities tilting in his favour,
any doubt on the complainant's case could not have
been raised for want of evidence regarding the
source of funds for advancing loan to the appellant-
accused."
"15. No doubt, and as correctly argued by
Senior Counsel for the appellants, the presumptions
raised under Sections 118 and Section 139 are
rebuttable in nature. As held in M.S. Narayana Menon
v. State of Kerala, which was relied upon in
Basalingappa, a probable defence needs to be raised,
which must meet the standard of "preponderance of
probability", and not mere possibility. These principles
were also affirmed in Kumar Exports, wherein it was
further held that a bare denial of passing of
consideration would not aid the case of accused.
17. Even if we take the arguments raised by
the appellants at face value that only a blank cheque
and signed blank stamp papers were given to the
respondent, yet the statutory presumption cannot be
obliterated. It is useful to cite Bir Singh v. Mukesh
Kumar, where this court held that:
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"36. Even a blank cheque leaf, voluntarily
signed and handed over by the accused, which is
towards some payment, would attract presumption
under Section 139 of the Negotiable Instruments
Act, in the absence of any cogent evidence to show
that the cheque was not issued in discharge of a
debt."
(emphasis supplied)
19. Thus the position of law is very well settled. The
said settled preposition of law is to be applied to the facts of the
present case. The accused has categorically admits that he had
issued 3 cheques referred to above with his signatures in favour
of the complainant. Initially in the reply notice the accused had
taken the defence in the said reply notice that the complainant
had promised to pay commission to the accused for the business
he had done. But he failed to pay the commission amount and
therefore, the relationship between the complainant and the
accused strained and the accused stopped dealing with the
complainant since 12.03.2008. It is his further defence that
during August-2008, the complainant approached the accused
and requested to continue the business relationship. The
complainant promised to supply the materials to the accused
and in that regard, the accused had issued 3 blank cheques as
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security for the business transaction. Those cheques were
misused by the complainant by presenting for encashment.
20. Learned counsel was not in a position to explain as
to what was the necessity to the accused to issue 3 blank
cheques as security, while even according to the accused he has
stopped transacting with the complainant since 12.03.2008. It is
the specific defence taken by the accused that the complainant
was due to pay the amount towards commission, which was not
paid by him and therefore, the complainant was due to pay the
amount to the accused. Under such circumstances, there was
absolutely no reason for the accused to issue the cheques as
security that too 3 different cheques. If at all the complainant
has to issue the cheque for the amount that was due according
to the accused. Even though the accused has examined as DW-
1, he has not explained the circumstances under which, he has
issued the cheques as security. He has not made clear as what
was the necessity for giving security. Under such circumstances,
it is to be held that the accused has not probabalized the
defence and hence, he is liable of conviction.
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21. I have gone through the judgments passed by the
Trial Court, it has taken into consideration the oral and
documentary evidence in the light of the averments made in the
complaint and arrived at a right conclusion. But the First
Appellate Court accepted the defence taken by the accused that
the blank cheques were issued as security only on the ground
that all the cheques were having consecutive numbers. It has
failed to notice that the accused has not raised a probable
defence and not assigned any reasonable explanation as to
what was the necessity for giving security to the complainant,
when even according to the accused, he had stopped
transacting with the complainant since 12.03.2008. It is not the
contention of the accused that some amount was due from him
to the complainant when he stopped transacting with the
complainant. It is also not his contention that he never placed
fresh order with the complainant and something was due to the
complainant forcing him to issue blank cheques as security.
When the defence taken by the accused is not reasonable, such
defence shall fail and the presumption under Section 139 of NI
Act will prevail. Therefore the complainant is bound to succeed
and the accused is liable for conviction. Hence, the impugned
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judgments of acquittal passed by the First Appellate Court is
perverse and illegal, which is against the settled preposition of
law and hence, it calls for interference by this Court.
22. Accordingly, I answer the above point in the
Affirmative and proceed to pass the following:
ORDER
(i) The Criminal Appeals are allowed.
(ii) The judgments dated 30.01.2015 passed in
Crl.A.No.189/2014 and Crl.A.No.190/2014 respectively, on the
file of the learned Fast Track Court - IV, Bangalore are hereby
set aside.
(iii) Consequently, the accused is convicted by restoring
the judgment of conviction and order of sentence passed by the
Trial Court vide judgments dated 29.01.2014 passed in
C.C.No.10754/2009 and C.C.No.13188/2009, on the file of the
learned XIII Additional Metropolitan Magistrate, Bangalore,
Send back Trial Court records along with copy of the
judgment to the Trial Court for information and needful action
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i.e., to secure the presence of the accused and to issue
conviction warrant.
Sd/-
(M G UMA)
JUDGE
SPV
