Karnataka High Court
Sri Alam Venkat Naidu vs Smt Vandhana Nerella on 15 November, 2024
Author: V Srishananda
Bench: V Srishananda
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CRL.RP No. 1414 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
®
DATED THIS THE 15TH DAY OF NOVEMBER, 2024
BEFORE
THE HON'BLE MR JUSTICE V SRISHANANDA
CRIMINAL REVISION PETITION NO. 1414 OF 2015
BETWEEN:
SRI. ALAM VENKAT NAIDU,
S/O A. NARASAPPA,
AGED ABOUT 66 YEARS,
NO.6/3/75, RAMANAGAR,
ANANTHAPURA TOWN (A.P) - 515 004.
...PETITIONER
(BY SRI. NARAYANA T.N, ADVOCATE)
AND:
SMT. VANDHANA NERELLA,
W/O SRI. YOGENDRA,
AGED ABOUT 36 YEARS,
C/O KRISHNA KANNAMULAPUDI,
DOOR NO.2049, 8TH MAIN, E BLOCK,
II STAGE, RAJAJINAGAR, BANGALORE - 10.
Digitally REPRESENTED BY HER GPA HOLDER
signed by
MALATESH K. RAMA REDDY,
KC S/O KRISHNA REDDY,
Location: AGED ABOUT 44 YEARS,
HIGH C/O MARUTHI FAB TECH,
COURT OF NO.A-45, 2ND CROSS,
KARNATAKA PEENYA 2ND STAGE,
BANGALORE - 58.
...RESPONDENT
(BY SRI. CHANDRASHEKAR P. PATIL, ADVOCATE)
THIS CRL.RP IS FILED U/S.397(1) OF CR.P.C PRAYING TO
SET ASIDE THE JUDGMENT AND ORDER DATED 01.12.2015
PASSED BY THE LX ADDL. CITY CIVIL AND S.J. (CCH-61),
BANGALORE IN CRL.A.NO.442/2014 AND SET ASIDE THE
ORDER OF CONVICTION AND SENTENCE PASSED IN
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CRL.RP No. 1414 of 2015
C.C.NO.43620/2010 DATED 09.04.2014 BY THE XXI A.C.M.M.,
BANGALORE CONVICTING THE PETR./ACCUSED AND
SENTENCING THE PETR./ACCUSED TO PAY FINE OF
RS.30,50,000/- AND IN DEFAULT TO UNDERGO S.I. FOR 9
MONTHS BY ALLOWING THIS CRL.REV. PETITION.
THIS PETITION, COMING ON FOR FINAL HEARING, THIS
DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE V SRISHANANDA
ORAL ORDER
Heard Sri. Narayana.T.H, learned counsel for the
revision petitioner and Sri. Chandrashekar.P.Patil, learned
counsel for the respondent.
2. Accused, who suffered an order of conviction for
the offence punishable under Section 138 of the
Negotiable Instruments Act, 1881 (for short 'NI Act') in
C.C.No.43620/2010 confirmed in Crl.A.No.442/2014, has
preferred this Revision Petition.
3. Facts in brief, which are utmost necessary for
disposal of the revision petition are as under:
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A complaint came to be lodged under Section 200 of
Code of Criminal Procedure (for short 'Cr.P.C') alleging
commission of offence punishable under Section 138 of the
NI Act by contending that the complainant Smt. Vandhana
Nerella is an NRI residing in United States of America (for
short 'USA') and accused is the General Power of Attorney
holder (for short 'GPA holder') of one Sri. N.Sunil. There
was a transaction of sale of a land measuring 23.33 acres
situated in Kenchanahalli village, Nelamangala Taluk,
Bengaluru. After due negotiation, a sale agreement was
executed on 22.03.2007 and accused was a party to the
said agreement through his GPA holder. The sale
consideration was fixed at sum of Rs.3,57,37,500/-. The
complainantt has paid a sum of Rs.40,00,000/- and GPA
holder of the complainant Sri. K.Rama Reddy further paid
a sum of Rs.3,17,37,500/- to the accused. However, the
sale transaction did not materialize. Accused agreed to
sell the said land in favour of Sri. Kaviraj Urs and his wife
Bharathi Urs of Lakshmi Minerals, Bengaluru.
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4. The complainant therefore, gave up the claim and
demanded for return of money paid by her. The accused
paid a sum of Rs.1,40,00,000/- towards return of the sale
consideration by Bank transfer from State Bank of India
(for short 'SBI'), Ananthpuram Branch, Andra Pradesh
State to the account of GPA holder of the complainant.
5. For the balance amount, accused issued three
cheques bearing Nos.838808 dated 03.12.2008, 838810
dated 31.01.2009 and 838813 dated 15.02.2009 in a sum
of rupees ten lakhs each drawn on SBI, Ananthpuram
Branch, Andra Pradesh State. On 27.06.2009, complainant
presented the said cheques to her banker, namely SBI,
Rajajinagara Branch, and Bengaluru. Cheques were
returned unpaid on the ground of 'insufficient funds',
which came to the knowledge of the complainant on
12.11.2009. The endorsement was received by the
complainant in this regard on 19.11.2009. On
11.12.2009, notice was issued calling upon the accused to
make arrangement of the amount covered under the
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cheques through RPAD as well as Certificate of Posting.
Notice was served on the accused but, there was no
compliance but, sent an untenable reply. Therefore, the
complainant sought for action against the accused.
6. Learned Trial Magistrate after completing
necessary formalities, summoned the accused and
recorded the plea. The accused pleaded not guilty and
therefore trial was held.
7. In order to prove the case of complainant, the
GPA holder of complainant got examined himself as P.W.1
and placed on record 19 documents, which were exhibited
and marked as Ex.P1 to P19, comprising of General Power
of Attorney, dishonourned cheques, Bank endorsements,
letters from Bankers, Endorsment, Office copy of the legal
notice, postal receipt, UCP, ICICI bank statements, Bank
Statement of Canara Bank, Passbook, balance sheet for
the years 2008-09 and 2009-10.
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8. Detailed cross examination of PW.1 did not yield
any positive material so as to disbelieve the case of the
complainant nor to dislodge the presumption available to
the complainant. The only answer that is elicited and
which is banked upon by the accused is that though the
complainant came to know about the dishonour of cheque
within 3 - 4 days of its dishonour, legal notice came to be
issued 4 to 5 months later.
9. Subsequent thereto, learned Trial Magistrate
recorded the accused statement as is contemplated under
Section 313 Cr.P.C, wherein accused has denied all the
incriminatory circumstances.
10. In order to rebut the presumption available to
the complainant, accused neither stepped into the witness
box nor place any written statement. However, on behalf
of the accused, three documents were placed on record
namely, Ex.D1 to Ex.D3, which are the registered sale
deeds.
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11. On conclusion of recording of evidence of
parties, the learned Trial Magistrate heard the parties in
detail and on cumulative consideration of the oral and
documentary evidence placed on record, convicted the
accused for the offence punishable under Section 138 of
the NI Act and awarded fine amount of Rs.30,50,000/- of
which sum of Rs.30,40,000/- was ordered to be paid as
compensation and balance sum of Rs.10,000/- was
ordered to be appropriated towards defraying expenses of
the State.
12. Being aggrieved by the same, accused filed an
appeal before the LX Additional City Civil and Sessions
Judge, Bengaluru in Criminal Appeal No.442/2014.
13. Learned Judge in the First Appellate Court on
securing the records, heard the parties' in detail and
dismissed the appeal of the accused and confirmed the
order of conviction and sentence.
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14. Being further aggrieved by the same, accused is
before this Court.
15. Sri. Narayana.T.H, learned counsel for the
revision petitioner reiterating the grounds urged in the
revision petition, vehemently contended that both the
Courts have grossly erred in convicting the accused as
there was no demand as is contemplated under the
Statute under Section 138(b) of the NI Act inasmuch as
cheque came to be dishonoured in the month of July 2009,
whereas the demand notice came to be issued on
11.12.2009, which is beyond thirty days from the date of
dishonour. Therefore, there was no scope for taking
cognizance of the offence by the Trial Magistrate and thus,
the entire trial is vitiated on the ground of technicality,
which has not been properly appreciated by both the
Courts and sought for allowing the revision petition.
16. Per contra, Sri. Chandrashekar.P.Patil, learned
counsel for the respondent supports the impugned order
by contending that even though PW.1 has admitted in his
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cross-examination that he came to know about dishonour
of the cheque within 3-4 days, actual bank endorsement is
received by PW.1 only on 12.11.2009. Therefore, the legal
notice issued on 11.12.2009 is valid as the time limit is
thirty days from the date of actual receipt of information of
dishonour from the bank. Therefore, the technical ground
raised by the learned counsel for the revision petitioner is
untenable and sought for dismissal of the revision petition.
17. In reply, learned counsel for the revision
petitioner reiterating the fact that complainant has
admitted that the legal notice is issued 4 to 5 months
later, places reliance on the judgment of the Hon'ble Apex
Court in the case of KAMLESH KUMAR Vs. STATE OF
BIHAR AND ANOTHER reported in AIR 2014 SC 660.
18. He drew the attention of this Court to paragraph
Nos.12, 13 and 14, wherein it is held as under and sought
for allowing the revision petition :
"12. Applying the aforesaid principles, in the
present case, we find that cheque was presented,
second time, on 10.11.2008. The complainant,
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however, sent the legal notice on 17.12.2008 i.e.
much after the expiry of the 30 days. It is clear from
the complaint filed by the complainant himself that
he had gone to the bank for encashment the cheque
on 10.11.2008 but the cheque was not honoured due
to the unavailability of the balance in the account.
13. The crucial question is as to on which date
the complainant received the information about the
dishonour of the cheque. As per the appellant the
complainant received the information about the
dishonour of the cheque on 10.11.2008. However,
the respondent has disputed the same. However, we
would like to add that at the time of arguments the
aforesaid submission of the appellant was not
refuted. After the judgment was reserved, the
complainant has filed the affidavit alleging therein
that he received the bank memo of the bouncing of
cheque on 17.11.2008 and therefore legal notice
sent on 17.12.2008 is within the period 30 days from
the date of information. Normally, we would have
called upon the parties to prove their respective
versions before the trial court by leading their
evidence. However, in the present case, as rightly
pointed out by the learned senior counsel for the
appellant, the complainant has accepted in the
complaint itself that he had gone to the bank for
encashment of cheque on 10.11.2008 and the
cheque was not honoured due to insufficient of
funds, thereby admitting that he came to know about
the dishonour of the cheque on 10.11.2008 itself. It
is for this reason that appellant has filed reply
affidavit stating that this is an after thought plea as
no material has been filed before the court below to
show that the bank had issued memo about the
return of cheque which was received by the
complainant on 17.11.2008. The specific averment
made in the complaint in this behalf is as under:
"Subsequently the complainant again went to
encash the cheque given by the accused on
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10.11.2008 which again bounced due to
unavailability of balance in the accused account."
It is, thus, clear from the aforesaid averment
made by the complainant himself that he had gone
to the bank for encashing the cheque on 10.11.2008
and found that because of unavailability of sufficient
balance in the account, the cheque was bounced.
Therefore, it becomes obvious that he had come to
know about the same on 10.11.2008 itself. In view
of this admission in the complaint about the
information having been received by the complainant
about the bouncing of the cheque on 10.11.2008
itself, no further enquiry is needed on this aspect.
14. It is, thus, apparent that he received the
information about the dishonour of the cheque on
10.11.2008 itself. However, he did not send the legal
notice within 30 days therefrom. We, thus, find that
the complaint filed by him was not maintainable as it
was filed without satisfying all the three conditions
laid down in Section 138 of the N. I. Act as explained
in para 12 of the judgment in the case of MSR
Leathers, extracted above."
19. Having heard the parties in detail, this Court
perused the material on record meticulously.
20. On such perusal of the material on record,
following points would arise for consideration :
"(i) Whether the revision petitioner has made
out a case that both the Courts have grossly
erred in convicting the accused under Section
138 of the NI Act for want of issuance of proper
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notice as is contemplated under Section 138(b)
of the NI Act?
(ii) Whether the sentence is excessive?
(iii) What order?"
REGARDING POINT NO.1 :
21. In the case on hand, issuance of the cheques by
the accused towards repayment of the balance amount in
respect of failed sale transaction between the complainant
and accused is not in dispute. So also the signature of the
accused in the dishonoured cheques is not in dispute.
22. According to the accused, cheques were
dishonoured in the month of July 2009.
23. No doubt in the cross-examination of PW.1, he
has admitted that he came to know about the dishonour of
cheque within 3-4 days from the date of dishonour. He
also admits in the cross-examination that legal notice is
issued 4-5 months later.
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24. The bank endorsements are made available
before the Courts and marked as exhibits. The bank
endorsements are admittedly collected by the GPA holder
of the complainant in the month of November. The exact
date of the bank endorsement is 12.11.2009.
25. To appreciate the arguments of learned counsel
for the revision petitioner, it is necessary to cull out
Section 138(b) of the NI Act. Section 138(b) of the NI Act
reads as under :
"Section 138 : Dishonour of cheque for
insufficiency, etc., of funds in the account.--
XXXXX
Section 138(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, [within thirty days of the receipt of
information by him from the bank regarding the
return of the cheque as unpaid.
(Emphasis applied)"
26. On careful and close reading of the above
provision of law, it is just and clear that it is said that
notice needs to be issued by the complainant within thirty
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days after receipt of the information by the complainant
about the return of the cheque from his banker.
27. Having regard to the fact that the receipt of
information must be specific, the said information must be
in writing.
28. In practice, all the banks therefore, issue an
endorsement in a prescribed form notifying the reason for
dishonour. The banker of the complainant would come to
know about the dishonour of the cheque after receipt of
the original cheque, which has been sent to the bank of
the accused and written communication from the accused
banker about the dishonour.
29. Some banks have adapted the practice of
returning the dishonoured cheque with the endorsement
issued by the accused banker as well as the endorsement
from the banker of the complainant. However, in some
banks, based on the information received from the
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accused banker, complainant banker would issue an
endorsement.
30. So from the above discussion, it is clear that the
word of 'receipt of information' employed in Section
138(b) of the NI Act should be construed as the receipt of
information by the banker of the complainant in writing.
As a matter of fact, the banker of the complainant is
required to communicate regarding dishonour of cheque of
the complainant i.e., cheque that has been deposited by
the complainant for encashment, by registered post under
acknowledgement due provided, the complainant does not
voluntarily appear before his banker and obtains the
endorsement physically by signing the necessary register.
In the case on hand, since the complainant is resident of
United States of America and she had executed a general
power of attorney in favour of PW.1. It is highly
improbable that the complainant would visit her banker
namely SBI, Rajajinagar Branch in Bengaluru and collect
the dishonoured cheques and bank endorsements.
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31. Therefore, the information said to have been
received by PW.1 as is answered by him in his cross-
examination that he came to know about dishonour of
cheque within 3-4 days is of no consequence in
appreciating the stand taken by the accused that there
was no proper compliance of requirement of Section
138(b) of the NI Act resulting in the order taking the
cognizance as defective and trail should initiated.
32. Subsequently, when the cheques were not
realized by the complainant, communication between PW.1
and the complainant has taken place. Thereafter, PW.1
being the GPA holder visited the SBI, Rajajinagar and
collected the endorsement from the SBI, Rajajinagar on
12.11.2009. Thereafter, contacted the Advocate and got
issued the notice within a period of thirty days from
12.11.2009, which duly served on the accused.
33. Here and here alone, it is necessary to ponder
over the requirement of issuance of a legal notice as is
contemplated under Section 138(b) of the NI Act. The
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object of issuance of legal notice as is contemplated under
Section 138(b) of the NI Act is to provide an honest
drawer of a cheque to retrace his steps in honouring his
commitment towards the consideration covered under the
cheque as is held in the case of CENTRAL BANK OF INDIA
AND ANOTHER VS. SAXONS FARMS AND OTHERS reported
in (1999)8 SCC 221.
34. There may be instances, where for the reasons
beyond the control of a drawer, cheque may get
dishonoured. To protect such honest drawers of the
cheque, the notice of 15 days period is granted to the
drawer of the cheque to make good the amount covered
under the cheque. In the case on hand, admittedly, the
transaction is admitted by the accused and receipt of the
advance amount is also not in dispute. He had made part
repayment of the advance amount towards the sale
agreement by transferring the amount from his bank
namely SBI, Ananthapuram Branch, Bengaluru, to the
account of GPA holder of the complainant. Towards the
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balance payment, cheques in question came to be issued
by him.
35. Therefore, only on the ground that there was a
delay in collecting the bank endorsements by PW.1 and
later on causing the notice in the month of Decemeber
alone, cannot be a ground to exonerate the penal liability
on the accused.
36. It is not in dispute and settled principles of law
that technicalities should not come in the way of the
dispensation of the real and proper justice. Moreover, as
referred to supra, issuance of notice is to provide one
more chance for the honest drawer. In the case on hand,
nothing prevented the accused to repay the money and his
transaction is of the year 2009.
37. Taking note of these aspects of the matter, the
Trail Judge convicting the accused on the basis of the
material on record confirmed by the First Appellate Court
cannot be faulted with.
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38. Now coming to the questions and the principles
of law enunciated in the judgment of the Hon'ble Apex
Court in the case of Kamlesh Kumar (supra), the facts in
the said case are altered by the judgment insofar as the
facts in the present case are concerned inasmuch as in
Kamlesh Kumar case, there was multiple presentation of
the cheque and multiple causes of action and therefore,
the Hon'ble Apex Court has ruled that, if the complainant
has not complied Section 138(b) of the NI Act on the first
presentation, the subsequent presentation would not
invoke the benefit of the complainant for fresh cause of
action and then, passed suitable orders in the facts of
circumstances of that case.
39. The facts of the present case is being altogether
different. This Court is unable to accept the contentions
urged on behalf of the revision petitioner by following the
principles of law in Kamlesh Kumar's case. Accordingly,
the same is of no avail in annulling the well reasoned
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orders passed by the learned Trial Magistrate confirmed by
the First Appellate Court.
40. In view of the foregoing discussion, point No.1 is
answered in the negative.
REGARDING POINT NO.2 :
41. Learned Trial Magistrate has awarded a sum of
Rs.30,50,000/- as fine amount as against the cheque
amount of Rs.30,00,000/-. For the reasons best known,
complainant did not challenge the inadequacy of the fine
amount or the compensation. Therefore, order has
become final insofar as the complainant is concerned.
42. However, out of the sum of Rs.30,50,000/- Trial
Magistrate has directed that sum of Rs.10,000/- is to be
appropriated towards the defraying expenses of the State.
The same cannot be countenanced in law as the lis is privy
to the parties and no State machinery is involved.
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43. Therefore, to that extent, interference is
necessary in this revision petition. Hence, point No.2 is
answered partly in the affirmative.
REGARDING POINT NO.3 :
44. In view of the findings of this Court on point
Nos.1 and 2 as above, pass the following :
ORDER
i) The revision petition is allowed in-part.
ii) While maintaining the conviction of the
accused for the offence punishable under
Section 138 of the NI Act, fine amount
awarded by the Trial Magistrate in a sum of
Rs.30,50,000/- is reduced to 30,40,000/-.
iii) Entire sum of Rs.30,40,000/- is ordered to
be paid as compensation to the
complainant on or before 20.12.2024, less
the amount already in deposit.
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iv) If the accused fails to make the payment as
referred to supra, he shall undergo simple
imprisonment for a period of one year.
v) Amount of Rs.10,000/- awarded by the
Trial Magistrate confirmed by the First
Appellate Court towards the defraying
expenses of the State is hereby set aside.
vi) Office is directed to return the Trial Court
records with copy of this order forthwith.
Sd/-
(V SRISHANANDA)
JUDGE
PHM
CT: BHK
