Karnataka High Court
M/S Vagvilas Software Pvt. Ltd vs Sri.Sushant S/O Subrai Valvoikar on 9 October, 2024
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CRL.A No. 100044 of 2017
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 9TH DAY OF OCTOBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE S.RACHAIAH
CRIMINAL APPEAL NO. 100044 OF 2017 (A)
BETWEEN:
M/S VAGVILAS SOFTWARE PVT. LTD.,
A REGISTERED PRIVATE LIMITED COMPANY,
REPRESENTED BY ITS
AUTHORISED SIGNATORY,
SRI. CHANDRASHEKAR
S/O BASAPPA KINNAL, AGE: 33 YEARS,
OCC: SERVICE, R/O: HUBLI.
R/O HAVING ITS REGISTERED OFFICE AT
CTS NO. 844, IST FLOOR
DURGAD BAIL HUBBALI.
...APPELLANT
(BY SRI. PRAKASH.K.JAWALKAR, ADVOCATE)
AND:
Digitally signed
by SRI. SUSHANT S/O SUBRAI VALVOIKAR,
SREEDHARAN
BANGALORE AGE: 37 YEARS, OCC: BUSINESS,
SUSHMA
LAKSHMI
PROPRIETOR OF CLEAR VISION COMPUTERS,
Location: HIGH BUDUWARPETH BAZAR, PONDA,
COURT OF
KARNATAKA DISTRICT: SOUTH GOA, PIN - 403 401.
...RESPONDENT
(BY MISS. RANJITA ALAGWADI, AMICUS CURIAE)
THIS CRIMINAL APPEAL IS FILED UNDER SECION 378(4)
OF CR.P.C., PRAYING TO SET ASIDE THE IMPUGNED
ACQUITTAL JUDGEMENT PASSED BY THE JMFC, 1ST COURT,
HUBLI IN C.C.NO. 4213 OF 2015 ON 25TH NOVEMBER 2016 FOR
OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT.
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CRL.A No. 100044 of 2017
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 09.07.2024 COMING FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, THIS COURT DELIVERED THE
FOLLOWING:
CORAM: THE HON'BLE MR. JUSTICE S.RACHAIAH
CAV JUDGMENT
(PER: THE HON'BLE MR. JUSTICE S.RACHAIAH)
1. This Criminal Appeal is filed by the appellant who is
the complainant before the Trial Court being
unsuccessful in the Trial Court has approached this
Court seeking to set aside the judgment of acquittal
dated 25.11.2016 in C.C No.4213/2015 on the file of
JMFC, 1st Court, Hubballi.
Brief facts of the case:
2. The case of the complainant is that, the complainant
was a dealer in various computers and its peripherals.
The accused had approached him and purchased some
goods on a credit basis. The complainant was
maintaining books of account for having sold the items
to the accused from time to time. As per the records,
the accused was due for a sum of Rs.4,36,406/- as on
20.08.2009. The accused had issued a cheque to the
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complainant and asked him to present the said cheque
for encashment. The complainant presented the
cheque for encashment on 16.11.2009. However, the
said cheque came to be dishonoured on 05.12.2009
and the same was intimated to the complainant on the
same day. The complainant gave intimation to the
accused about the dishonour of cheque through legal
notice and it was issued by way of Registered Post,
Acknowledgment Due on 12.12.2009. However, the
said notice came to be returned on 16.12.2009 as the
sendee had unclaimed. After having received the
intimation by the complainant, the complainant filed a
complaint before the Jurisdictional Magistrate having
jurisdiction and the learned Magistrate after taking
cognizance proceeded with the case.
3. To prove the case of the complainant, the complainant
examined himself as P.W.1 and also got examined
another witness as P.W.2 and got marked 21
documents as Exs.P1 to P21. On the other hand, the
accused has not chosen to lead any evidence. The
Trial Court after appreciating the oral and
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documentary evidence on record opined that the
complainant had not proved the legally recoverable
debt or liability and therefore, acquitted the accused.
4. Heard Sri.Prakash K.Jawalkar, learned counsel for
appellant and Smt.Ranjita Alagwadi, learned Amicus
Curiae for the respondent.
5. It is the submission of the learned counsel for the
appellant that the findings of the Trial Court in
recording the acquittal appears to be erroneous and
illegal, therefore, it is liable to be set aside.
6. It is further submitted that the Trial Court arrived at a
conclusion that the complainant has not proved the
case beyond reasonable doubt and opined that the
initial burden is upon the complainant to prove that
there is a legally recoverable debt or liability, then
only the complainant can avail the presumption under
Section 139 of N.I Act itself is contrary to the settled
principle of law. The approach adopted by the Trial
Court in appreciating the facts and law is not
appropriate and proper. Therefore, the impugned
judgment needs to be looked into.
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7. It is further submitted that initially the complainant is
not required to prove his case beyond reasonable
doubt, once the execution of the cheque is admitted
by the accused. In fact, initial burden lies on the
accused to rebut the presumption raised under Section
139 of N.I Act. However, the Trial Court had lost sight
of the settled position of law, consequently, the
impugned judgment is passed.
8. It is further submitted that the complainant has even
though produced several documents relating to the
transaction and also proved the liability of the
accused, the Trial Court ignored those documents and
adopted the wrong approach and dismissed the
complaint, which is contrary to the settled principle of
law. Therefore, the judgment of acquittal passed by
the Trial Court is liable to be set aside. Making such
submissions, the learned counsel for the appellant
prays to allow the appeal.
9. Per contra, the learned Amicus Curiae for respondent
vehemently justified the judgment of acquittal passed
by the Trial Court and further he submitted that, the
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accused need not prove the case at the first instance.
Further, he submitted that it is a settled principle of
law that the accused may rebut the presumption by
proving the contrary even relying on the documents
produced by the complainant.
10. It is further submitted that the Trial Court has rightly
considered the material on record and opined that the
complainant has not proved the case beyond
reasonable doubt regarding the debt or liability.
Therefore, dismissed the complaint. The said
dismissal is appropriate and proper, interference with
the said findings may not be necessary. Making such
submissions, the learned Amicus Curiea for respondent
prays to dismiss the appeal.
11. After having heard the learned counsel for the
respective parties and also perused the findings of the
Trial Court, it is relevant to refer the judgment of the
Hon'ble Supreme Court in the case of BIR SINGH v.
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MUKESH KUMAR1, wherein paragraph Nos.18, 20 and
24 reads thus:
"18. In passing the impugned judgment and
order dated 21-11-2017 [Mukesh Kumar v.
Bir Singh, 2017 SCC OnLine P&H 5352], the
High Court misconstrued Section 139 of the
Negotiable Instruments Act, which mandates
that unless the contrary is proved, it is to be
presumed that the holder of a cheque
received the cheque of the nature referred to
in Section 138, for the discharge, in whole or
in part, of any debt or other liability.
Needless to mention that the presumption
contemplated under Section 139 of the
Negotiable Instruments Act, is a rebuttable
presumption. However, the onus of proving
that the cheque was not in discharge of any
debt or other liability is on the accused
drawer of the cheque.
20. Section 139 introduces an
exception to the general rule as to the
burden of proof and shifts the onus on the
accused. The presumption under Section 139
of the Negotiable Instruments Act is a
presumption of law, as distinguished from
presumption of facts. Presumptions are rules
of evidence and do not conflict with the
presumption of innocence, which requires the
(2019) 4 SCC 197
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prosecution to prove the case against the
accused beyond reasonable doubt. The
obligation on the prosecution may be
discharged with the help of presumptions of
law and presumptions of fact unless the
accused adduces evidence showing the
reasonable possibility of the non-existence of
the presumed fact as held in Hiten P. Dalal
[Hiten P. Dalal v. Bratindranath Banerjee,
(2001) 6 SCC 16 : 2001 SCC (Cri) 960] .
24. In K.N. Beena v. Muniyappan
[K.N. Beena v. Muniyappan, (2001) 8 SCC
458 : 2002 SCC (Cri) 14] , this Court held
that in view of the provisions of Section 139
of the Negotiable Instruments Act read with
Section 118 thereof, the Court had to
presume that the cheque had been issued for
discharging a debt or liability. The said
presumption was rebuttable and could be
rebutted by the accused by proving the
contrary. But mere denial or rebuttal by the
accused was not enough. The accused had to
prove by cogent evidence that there was no
debt or liability. This Court clearly held that
the High Court had erroneously set aside the
conviction, by proceeding on the basis that
denials/averments in the reply of the
accused were sufficient to shift the burden of
proof on the complainant to prove that the
cheque had been issued for discharge of a
debt or a liability. This was an entirely
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erroneous approach. The accused had to
prove in the trial by leading cogent evidence
that there was no debt or liability."
12. On careful reading of the above said dictum, the
Hon'ble Supreme Court reiterated that Section 139 of
N.I Act mandates that, unless, the contrary is proved,
it is to be presumed that the holder of a cheque
received the cheque of the nature referred to in
Section 138 of N.I Act, for the discharge, in whole or
in part of any debt or other liability. Mere denial or
rebuttable by the accused was not enough.
13. In the present case, the complainant has produced 21
documents to substantiate that accused had made
transactions with him. The evidence of P.W.1 would
indicate that in the cross-examination, he admitted
that he was giving his evidence as a attorney holder.
However, he was consistent that the accused was
liable to pay the due as stated in the cheque. On the
contrary, the accused has not denied the issuance of
the cheque and its execution. However, he raised his
defence that cheque was given as a security at the
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time of making transaction and the same has been
misused by the company.
14. The accused further contended that he has not
executed Ex.P5 which is relied on by P.W.1 and P.W.2.
However, he has not proved that it was not signed by
him. Mere denial is not sufficient to disprove the
documents.
15. As per Ex.P5, there are seven invoices relating to
different dates and also different amounts. Further,
Ex.P7 which is considered as books of accounts
relating to the transaction of the accused. As per the
said document, closing balance as on 01.08.2009 was
Rs.4,36,406/-.
16. On careful reading of the findings of the Trial Court, I
am of the considered opinion that the approach
adopted by the Trial Court in dismissing the complaint
is not proper and also against the settled principle of
law. Therefore, the findings of the Trial Court is liable
to be set aside.
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17. In the light of the observation made above, I am of
the considered opinion that the appellant has made
out a case to grant relief as prayed for. Hence, I
proceed to pass the following:
ORDER
i) The Criminal Appeal is allowed.
ii) The judgment and order of acquittal dated
25.11.2016 passed in C.C No.4213/2015 by
the JMFC, 1st Court, Hubballi is set aside.
iii) The respondent / accused is convicted for
the offence under Section 138 of N.I. Act and
he is sentenced to pay a fine of
Rs.7,00,000/- (Rupees Seven Lakhs only), in
default of payment of fine, he shall undergo
simple imprisonment for one year six
months.
iv) On fine being made by the accused before
the Trial Court, the Trial Court is directed to
release a sum of Rs.6,95,000/- (Rupees Six
Lakhs Ninety Five Thousand only) in favour
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of the complainant as compensation in terms
of Section 357-A of the Code of Criminal
Procedure, on proper identification and the
remaining balance amount of Rs.5,000/-
(Rupees Five Thousand only) shall be
adjusted to the State Exchequer.
v) In case, if the respondent fails to make
payment of fine as ordered by this Court, the
Trial Court is directed to take appropriate
steps in accordance with law to recover the
same after expiry of the time stipulated to
file Special Leave Petition before the Hon'ble
Supreme Court.
vi) The assistance rendered by the learned
Amicus Curiae is appreciated. The same is
placed on record. The Legal Services
Authority is directed to pay remuneration of
Rs.5,000/- (Rupees Five Thousand only) to
the learned Amicus Curiae for his effective
assistance forthwith.
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vii) The Registry is directed to send the copy of
this judgment along with the records to the
Trial Court to proceed further in accordance
with law.
Sd/-
(S.RACHAIAH)
JUDGE
UN
