Karnataka High Court

Sri Ker Singh Dewal vs Sri P Srikantha on 15 November, 2024

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                                                            NC: 2024:KHC:46583
                                                         CRL.A No. 605 of 2013




                       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                           DATED THIS THE 15TH DAY OF NOVEMBER, 2024

                                             BEFORE
                                THE HON'BLE MRS JUSTICE M G UMA

                              CRIMINAL APPEAL NO. 605 OF 2013 (A)

                   BETWEEN:

                   SRI KER SINGH DEWAL
                   S/O LAKH SINGH
                   AGED 40 YEARS
                   R/AT NO.148, MANASARA ROAD
                   ITTIGEGUD
                   MYSORE - 570 010.
Digitally signed                                                  ... APPELLANT
by NANDINI B       (BY SRI. GOPAL SINGH, ADVOCATE)
G
Location: high
court of           AND:
karnataka
                   SRI P. SRIKANTHA
                   S/O SUBBANNA BHAT
                   AGED 56 YEARS
                   R/AT NO.1194, 3RD MAIN
                   6TH CROSS, VIVEKANANDANAGAR
                   MYSORE - 570 023.
                                                                ... RESPONDENT
                   (BY SRI. GIRIDHAR H. ADVOCATE)

                         THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
                   CR.P.C PRAYING TO SET ASIDE THE ORDER DATED 28.03.2012
                   PASSED IN CRL.A.NO.86/11 ON THE FILE OF THE I ADDITIONAL
                   SESSIONS     JUDGE,     MYSORE     -    ACQUITTING   THE
                   RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER
                   SECTION 138 OF N.I. ACT. AND TO CONFIRM THE JUDGMENT AND
                   ORDER DATED 07.06.2011 PASSED BY THE PRINCIPAL-I CIVIL
                   JUDGE AND JMFC, MYSORE IN C.C.NO.948/2007.

                        THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED
                   FOR JUDGMENT ON 25/10/2024 COMING ON FOR PRONOUNCEMENT
                   OF ORDERS THIS DAY, THE COURT DELIVERED THE FOLLOWING:-
                          CORAM: HON'BLE MRS JUSTICE M G UMA
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                                               NC: 2024:KHC:46583
                                          CRL.A No. 605 of 2013




                        CAV JUDGMENT

The complainant in CC No.948 of 2007 on the file of the

learned Principal-I Civil Judge and JMFC at Mysuru (hereinafter

referred to as 'the Trial Court' for short), is impugning the

judgment dated 28.03.2012 passed in Criminal Appeal No. 86

of 2011 on the file of the learned I Additional Sessions Judge,

Mysuru, acquitting the respondent-accused for the offence

punishable under Section 138 of the Negotiable Instruments

Act (for short 'the NI Act'), by allowing the appeal and setting

aside the impugned judgment of conviction and order of

sentence dated 07.06.2011 passed by the Trial Court,

convicting him for the offence punishable under Section 138 of

NI Act and sentenced him to undergo simple imprisonment for

30 days and also to pay fine of Rs.1,30,000/- and in default to

pay fine, to undergo simple imprisonment for one month.

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 against the accused in PCR No.1100

of 2006 alleging commission of offence punishable under

Section 138 of NI Act. It is contended by the complainant that

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both the accused and the complainant were known to each

other since few years and the accused had approached the

complainant during May, 2006 requesting for hand loan of

Rs.1,00,000/- to meet his business and legal necessities.

Accordingly, the complainant had lent an amount of

Rs.1,00,000/-. The accused had issued the post dated cheque

bearing No.003147 for Rs.1,00,000/- dated 12.08.2006 in favor

of the complainant. When the cheque was presented for

encashment, the same was dishonored as account closed.

Legal notice was issued by the complainant and the same was

served on the accused. The accused has neither paid the

cheque amount nor replied to the legal notice and thereby,

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. The Trial Court took cognizance of the offence and

registered CC No.948 of 2007. The accused appeared before

the Trial Court, pleaded not guilty and claimed to be tried. The

complainant examined himself as PW1 and got marked Exs.P1

to P6 in support of his contention. The accused has denied all

the incriminating materials available on record in his statement

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recorded under Section 313 of Cr.P.C., examined himself as

DW1 and got marked Exs.D1 to D20 in support of his defence.

The Trial Court after taking into consideration all these

materials on record, convicted the accused for the offence

punishable under Section 138 of NI Act and sentenced him as

stated above. Being aggrieved by the same, the accused has

preferred Criminal Appeal No. 86 of 2011. The First Appellate

Court on re-appreciation of the materials on record, allowed the

appeal by setting aside the impugned judgment of conviction

and order of sentence passed by the Trial Court and acquitted

the accused. Being aggrieved by the same, the complainant is

before this Court.

5. Heard Sri Gopal Singh, learned counsel for the

appellant and Sri H Giridhar, learned counsel for the

respondent. Perused the materials including the Trial Court

records.

6. Learned counsel for the complainant contended that

the complainant has taken a specific contention that the

accused had borrowed a sum of Rs.1,00,000/- during May 2006

and towards discharge of the same, post dated cheque for

Rs.1,00,000/- dated 12.08.2006 was issued. When the cheque

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was presented for encashment, the same was dishonored as

account closed. In spite of service of notice, the accused had

not repaid the cheque amount and thereby committed the

offence punishable under Section 138 of NI Act.

7. Learned counsel contended that the accused is not

denying issuance of cheque as per Ex.P1, with his signature.

When the accused admits issuance of cheque with his

signature, the presumption under Section 139 of NI Act would

arise and the initial burden on the complainant gets discharged.

The burden shifts on the accused to rebut the presumption. He

further contended that the accused has taken inconsistent

defence initially contending that since he was a share broker,

the complainant had handed over 18 share certificates marked

as Exs.D1 to 18 and as security, he insisted the accused to

issue the cheque and accordingly he issued the cheque as per

Ex.P1 as security. Further, he denies availing of loan and

contended that there is no legally enforceable debt to invoke

Section 138 of NI Act. But later he produced Exs.D19 and 20

said to be the acknowledgement for having cleared the dues by

the accused in favor of the complainant. The complainant is not

a party to Exs.D19 and 20. Exs.D1 to 18 were not the share

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certificates standing in the name of the complainant.

Moreover, Exs.D7 and D8 - share certificates were issued only

on 23.09.2002. But strangely, in Exs.D19 and D20, there is

reference to both these share certificates, even though the

acknowledgments are dated 29.05.2002, much earlier to

issuance of share certificates on 23.09.2002. There is

absolutely no explanation by the accused as to how there could

be an acknowledgement referring to the share certificates

Exs.D7 and D8, which came to be issued much later during

September 2002. These inconsistent defence taken by the

accused falsifies the defence and it cannot be said that the

accused is successful in rebutting the presumption. When the

accused has not rebutted the presumption, he is liable for

conviction.

8. Learned counsel submitted that the Trial Court

rightly considered the materials on record and convicted the

accused. When the matter was pending before the First

Appellate Court, neither the counsel for the appellant nor the

counsel for the respondent addressed their arguments and the

Court proceeded to dispose off the appeal by referring to the

documents and it has committed an error in accepting Exs.D19

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and D20 and formed an opinion that the accused has rebutted

the presumption under Section 139 of NI Act. The First

Appellate Court has not taken into consideration the

inconsistency and falsity in the defence taken by the accused

and therefore, the impudent judgment of acquittal passed by

the First Appellate Court is liable to be dismissed. Accordingly,

he prays for allowing the appeal and to restore the impugned

judgment of conviction and order of sentence passed by the

Trial Court.

9. Per contra, learned counsel for the respondent

opposing the appeal submitted that the complainant has not

stated the date on which he had lent the amount of

Rs.1,00,000/-. The complainant admits that the accused is a

share broker and he was dealing with the share certificates

pertaining to the complainant. Under such circumstances, the

defence taken by the accused that the share certificates were

given by the complainant to the accused and as security the

accused was asked to issue the cheque as per Ex.P1. The

cheque which was issued as security was misused by the

complainant even though there was no debt that was due to be

paid by the accused.

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10. Learned counsel contended that the complainant

has also not proved his capacity to lend the amount.

Admittedly, there are no documents to prove lending of the

amount, which is highly improbable. Moreover, during 2005,

the Banks used to accept only MICR cheques and not the

cheque as per Ex.P1. Therefore, it is clear that the cheque -

Ex.P1 was issued by the accused much prior to the date, which

was referred to by the complainant i.e., before the policy to

introduce MICR cheques and thus, the contention of the

complainant is falsified.

11. Learned counsel further submitted that the account

of the accused was closed much prior to presentation of the

cheque, which also falsifies the contention taken by the

complainant. He further contended that Ex.P6 was produced

after recalling PW1 to produce the income tax

acknowledgement for the assessment year 2007-08 to contend

that the complainant has shown lending of the amount of

Rs.1,00,000/- in favor of the accused in his income tax returns.

But Ex.P6 - the income tax acknowledgement do not disclose

lending of the amount in favor of the accused. The enclosure

which is signed by the auditor discloses such lending, but the

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same bears the date 06.08.2007, whereas the income tax

acknowledgment is dated 30.07.2007. Therefore, it is clear

that Ex.P6 and the enclosures were concocted by the

complainant to prove his contention against the accused. The

First Appellate Court has believed the defence taken by the

accused as the accused is successful in proving his defence.

Therefore, the accused was rightly acquitted.

12. Learned counsel further submitted that Exs.D19 and

D20 are the acknowledgments in respect of clearing dues by

the accused. The complainant is signatory to both these

documents. There is a reference to the share certificates

produced as per Exs.D1 to D18. When the complainant has not

specifically denied the signature found in Exs.D19 and D20, the

defence taken by the accused will have to be accepted. Under

such circumstances, there is no illegality or perversity in the

judgment passed by the First Appellate Court. There are no

reasons to interfere with the same. Hence, he prays for

dismissal of the appeal.

13. Learned counsel for the respondent places reliance

on the decision of the Hon'ble Apex Court in M S Narayana

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Menon Alias Mani Vs. State of Kerala and another1, in

support of his contention that when the defence taken by the

accused is probable, the burden on him to rebut the

presumption gets discharged and the burden shifts on the

complainant to prove lending of the amount and also existence

of legally enforceable debt. He also placed reliance on the

decision of the Hon'ble Apex Court in John K Abraham Vs

Simon C. Abraham2, in support of his contention that the

burden to prove the guilt of the accused heavily lies on the

complainant and when the complainant is not sure as to when

he lent the amount, as to who had written the cheque and

when there are several inconsistencies in the contention taken

by the complainant, it cannot be held that the guilt of the

accused is proved. These are all the grounds for acquitting the

accused and the First Appellate Court has rightly acquitted the

accused. Placing reliance on these two decisions, learned

counsel for the respondent prays for dismissal of the appeal as

devoid of merits.

AIR 2006 SC 3366

AIR 2014 SC (Supp) 761

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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 judgment of acquittal passed by the First Appellate Court reversing the impugned judgment of conviction and order of sentence passed by the Trial Court suffers from perversity or illegality, which calls for interference by this Court?"

My answer to the above point is in the 'Affirmative' for

the following:

REASONS

15. It is the contention of the complainant that the

accused has borrowed an amount of Rs.1,00,000/- during May

2006 and towards discharge of the same, issued post-dated

cheque bearing No.003147 for Rs.1,00,000/- dated

12.08.2006. When the cheque was presented for encashment,

the same was dishonored as account closed. In spite of service

of legal notice, the accused has not repaid the cheque amount

nor issued any reply. Thereby, he has committed the offence

punishable under Section 138 of NI Act.

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16. In order to prove his contention, the complainant

examined himself as PW1 and reiterated his contention against

the accused. The witness was cross-examined by the learned

counsel for the accused. During cross-examination, witness

stated that he knew the accused since about 15 years, who is a

share broker. He states that lending of Rs.1,00,000/- during

2006 was declared in his income tax returns. He pleaded his

ignorance that during 2005, the Bank has introduced MICR

cheques and that the cheque - Ex.P1 is not a MICR cheque.

Witness denied the suggestion that he had given 18 share

certificates to the accused and also denied his signature on the

endorsement. However, there is reference to the document

which is the endorsement that was tendered to the witness

during cross-examination. But later the accused produced the

endorsement as per Exs.P19 and 20 and therefore, denial of

the signature found on the endorsement by the complainant

may be referred to Exs.D19 and D20. Witness denied the

suggestion that the accused had issued the cheque in question

as security and he had misused the same.

17. When the accused admits issuance of cheque with

his signature which is as per Ex.P1, the presumption under

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Section 139 of NI Act would arise and the initial burden on the

complainant gets discharged. The burden shifts on the accused

to rebut the legal presumption. Even though the accused has

contended that he had issued the cheque as a security, the

presumption under Section 139 of NI Act would arise.

18. In this regard, I may place reliance on the decision

of the Hon'ble Apex Court in Bir Singh Vs. Mukesh Kumar3

wherein, the Hon'ble Apex Court held in paragraphs 34 and 36

as under:

"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

3 (2019) 4 SCC 197

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evidence to show that the cheque was not issued in discharge of a debt."

19. When the burden shifts on the accused, degree of

proof required to rebut the presumption is only the

preponderance of probabilities. In other words, the burden of

proof on the accused is not so high as that of the complainant

who is required to prove the guilt of the accused beyond

reasonable doubt.

20. The accused during cross-examination of PW1 has

taken the defence that since he was a share broker, the

complainant had given 18 shares certificates produced as per

Exs.D1 to D18 for the purpose of selling it in the market. Since

18 share certificates were handed over by the complainant to

the accused, the complainant insisted for issuance of cheque as

security and therefore he had issued the cheque - Ex.P1.

Exs.D1 to D18 are the share certificates of various Companies.

But none of these certificates stand in the name of the

complainant. There is no explanation by the accused as to who

was the owner of the share certificates and why none of these

certificates stand in the name of the complainant.

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21. The accused has produced Exs.D19 and D20.

According to the accused, both himself and the complainant

have signed the document as cash was paid by the accused to

the complainant and the account was settled. In Ex.D19, it is

written that undated cheque bearing No.003147 to be collected

back.

22. It is the contention of the complainant that the

document was concocted by the accused and he was never a

party to the same. Witness also denied his signature found in

Exs.D19 and D20. When the accused categorically contended

that there was no amount that was due to be paid by him to

the complainant, it is not explained as to why this

acknowledgement for having settled the account came into

existence. The defence taken by the accused while cross-

examining PW1 was inconsistent with his defence by producing

Exs.D19 and D20 during his examination.

23. Learned counsel for the complainant has drawn my

attention to Exs.D7 and D8, the share certificates issued by

Gujarat Poly - AVX Electronics Limited. Exs.D7 and D8 are

having Certificate Nos.00618574 and 00618396 dated

23.09.2002. Exs.D19 and D20 are dated 29.05.2002 i.e. much

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prior to the date of Exs.D7 and D8. But strangely, Ex.D19

refers to the Certificate No.00618396. Similarly, Ex.D20 refers

to the Certificate No.00618574 dated 29.05.2002, which is

much prior to the date of Exs.D7 and D8 i.e., 23.09.2002.

Learned counsel for the respondent has no explanation as to

how these two certificates which were issued much later could

be referred to by the accused in the acknowledgment - Exs.D19

and D20.

24. It is pertinent to note that, the complainant has

never admitted these documents nor his signature said to be

found in Ex.D19. No efforts whatsoever is made by the

accused to prove the signature of the complainant said to have

been found in the document, nor the said signature was got

marked either during cross-examination of PW1 or during the

examination of the accused. Under such circumstances,

Exs.D19 and D20 cannot be believed. Even Exs.D1 to D18 also

cannot be believed for the reasons discussed above.

25. The accused has taken inconsistent defence to

contend that as security he had issued the cheque for having

received Exs.D1 to D18 and that there was no amount that was

due to be paid to the complainant. However, subsequently

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produced Exs.D19 and D20 contending that the amount that

was due to the complainant was already paid and the account

was settled. The defence which is inconsistent with one another

cannot be reconciled. When the accused fails to raise probable

defence, or in other words, when the accused even though

raises a defence, fails to probabalise the same, he will be liable

for conviction.

26. In this regard, I may refer to the decision of the

Hon'ble Apex Court in Rohitbhai Jivanlal Patel Vs. State of

Gujrat4. The Hon'ble Apex Court reiterated the legal position

that once the complainant is successful in discharging his initial

burden to prove issuance of cheque by the accused with his

signature, the presumption under Section 139 of NI Act would

arise and the burden shifts on the accused to rebut the legal

presumption. The Hon'ble Apex Court reiterated the degree of

proof to rebut the presumption on the part of the accused and

held in paragraph 18 as under:

"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

(2019) 18 SCC 106

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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....."

(Emphasis supplied)

27. 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, the Hon'ble Apex Court recorded

its various decisions and held in paragraphs 15 and 17 as

under:

"15.No doubt, and as correctly argued by Senior Counsel for the appellants, the

(2021) 5 SCC 283

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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:

"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)

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In view of the settled position of law on the subject, I am

of the opinion that the accused who has failed to rebut the

presumption, is liable for conviction.

28. Learned counsel for the respondent has placed

reliance on the decisions of the Hon'ble Apex Court in M S

Narayana Menon Alias Mani (supra) and John K Abraham

(supra) in support of his contention. The position of law

highlighted in both the decisions cannot be disputed, but the

same needs to be applied to the facts of the case. When the

accused has not rebutted the presumption and when it is

discussed above the defence taken by the accused is not

probable, the accused cannot succeed by placing reliance on

the decisions referred to above. Unless the accused rebuts the

presumption, the burden will not be shifted on the complainant

to prove his capacity to lend, actual lending of the amount,

existence of legally enforceable debt or liability or issuance of

cheque in discharge of such debt or liability. Non rebuttal of

legal presumption by the accused leads to proof of the guilt of

the accused beyond reasonable doubt. Therefore, the accused

is liable for conviction.

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29. I have gone through the impugned judgment of

acquittal passed by the First Appellate Court. As rightly

contended by the learned counsel for the complainant, none of

the learned counsel representing the complainant and the

accused have addressed their arguments before the First

Appellate Court. On perusing the materials on record, the First

Appellate Court proceeded to allow the appeal by accepting the

defence taken by the accused, ignoring the inconsistencies and

the perversities in the defence taken by the accused. Therefore,

the impugned judgment of acquittal passed by the First

Appellate Court is illegal and perverse, which calls for

interference by this Court. Hence, I answer the above point in

the Affirmative and proceed to pass the following:

ORDER

(i) The Criminal Appeal is allowed.

(ii) The judgment dated 28.03.2012 passed in Criminal

Appeal No. 86 of 2011 on the file of the learned I Additional

Sessions Judge, Mysuru, is hereby set aside.