Telangana High Court

R.Venkatesh And Another, vs K.Chandra Prakash And Another, on 3 August, 2022

Bench: K.Surender

         HONOURABLE SRI JUSTICE K.SURENDER

            CRIMINAL APPEAL No.318 of 2008


JUDGMENT:

1. The appeal is filed by the appellants/complainants

questioning the acquittal of the respondent for the offence

under Section 138 of Negotiable Instruments Act vide

judgment in CC No.676 of 2003 dated 05.12.2007 passed by

the I Additional Chief Metropolitan Magistrate, Hyderabad.

2. There are two complainants in the present case, who

were tenants in the premises of the accused. The accused

in the year 2000 wanted to construct a new commercial

complex and requested the appellants to surrender their

tenancy rights and offered Rs.25,00,000/- as compensation

for surrendering the tenancy rights and for loss of business.

For the said reason, post dated cheque for Rs.25,00,000/-

was given in the name of the appellants and also executed

Ex.P1 Memorandum of Understanding. EXP2 is a further

agreement amongst the appellants and the accused

respectively. Ex.P1 was entered into when cheque bearing

No.557290 was issued for Rs.25.00 lakhs. Subsequently,

Ex.P3 cheque was given by cancelling Ex.P1 cheque. Ex.P3

cheque was presented thrice and it was returned under

Exs.P5 and P6. Accordingly, final notice was issued on

27.05.2003. Since the payment was not made, complaint

under Section 138 of the Negotiable Instruments Act was

filed before the trial Court.

3. The learned Magistrate after recording the evidence of

P.Ws.1 to 3 and marking Exs.P1 to P13 on behalf of the

complainants and also examining the respondent/accused

as D.W.1, acquitted the accused finding that no offence was

made out under Section 138 of the Negotiable Instruments

Act. The reasons stated are; i) the contract in between the

complainants and the accused is invalid contract and hit by

Section 23 of the Contract Act, 1872; ii) Under Section 12 of

the Andhra Pradesh/Telangana State Buildings (Lease, Rent

and Eviction) Control Act, 1960, any grievance between the

tenant and the owner, the proper forum would be the Rent

Control Court.

4. Sri Vinod Kumar Deshpande, learned Senior Counsel

appearing on behalf of Smt. K.Kiranmayee, learned counsel

for appellants would submit that the learned Magistrate has

lost sight of the fact that the promise to pay an amount of

Rs.25,00,000/- towards surrendering the tenancy and

compensate for the loss of business is a 'liability'. The

learned Magistrate had framed the point ie., 8(1) Whether

the Cheque in dispute i.e., Ex.P3 was issued by the accused

towards the debt or legally existing liability to the

complainants?. However, ignoring the factum of 'liability'

and while concluding the judgment stated that there was no

legally enforceable debt to attract an offence under Section

138 of the Negotiable Instruments Act. There are two facets

of Section 138 of the Negotiable Instruments Act, i.e., one is

of 'debt' and the other 'liability'. The learned Magistrate

has found that there was no legally enforceable debt, but

did not give any finding that there was no liability. The said

undertaking given by the respondent/accused to give

compensation for loss of business and also for surrendering

the tenancy would fall squarely within 'liability', as such,

the finding of the learned Magistrate is erroneous. He

further illustrates that in the event of an accident taking

place, if the person causing the accident promises money to

be given to the injured and requests him not to go to the

Court, it amounts to 'liability' and the said promised

amount has to be paid by the person causing the said

accident. He relied upon the judgment of the Hon'ble

Supreme Court in the case of Ghurey Lal v. State of U.P.,1 and

drawn the attention of this Court to paras 69 and 70, which

prescribes the powers of the appellate Court in deciding an

order of acquittal, which reads as follows:

"69. The following principles emerge from the cases above:

1. The appellate court may review the evidence in appeals against acquittal under Sections 378 and 386 of the Criminal Procedure Code, 1973. Its power of reviewing evidence is wide and the appellate court can reappreciate the entire evidence on record. It can review the trial court's conclusion with respect to both facts and law.

2. The accused is presumed innocent until proven guilty. The accused possessed this presumption when he was before the trial court. The trial court's acquittal bolsters the presumption that he is innocent.

3. Due or proper weight and consideration must be given to the trial court's decision. This is especially true when a witness' credibility is at issue. It is not enough for the High Court to take a different view of the evidence. There must also be substantial and compelling reasons for holding that the trial court was wrong.

70. In light of the above, the High Court and other appellate courts should follow the well-settled principles crystallised by number of judgments if it is going to overrule or otherwise disturb the trial court's acquittal:

1. The appellate court may only overrule or otherwise disturb the trial court's acquittal if it has "very substantial and compelling reasons" for doing so.

A number of instances arise in which the appellate court would have "very substantial and compelling reasons" to discard the trial court's decision. "Very substantial and compelling reasons" exist when:

(i) The trial court's conclusion with regard to the facts is palpably wrong;

(ii) The trial court's decision was based on an erroneous view of law;

(2008) 10 SCC 450

(iii) The trial court's judgment is likely to result in "grave miscarriage of justice";

(iv) The entire approach of the trial court in dealing with the evidence was patently illegal;

(v) The trial court's judgment was manifestly unjust and unreasonable;

(vi) The trial court has ignored the evidence or misread the material evidence or has ignored material documents like dying declarations/report of the ballistic expert, etc.

(vii) This list is intended to be illustrative, not exhaustive.

2. The appellate court must always give proper weight and consideration to the findings of the trial court.

3. If two reasonable views can be reached--one that leads to acquittal, the other to conviction--the High Courts/appellate courts must rule in favour of the accused."

5. He further relied on the judgment in the case of

Central Inland Water Transport Corporation Ltd., v.

Brojo Nath Ganguly2. The Court held that that Contract Act

does not define the expression "public policy" or "opposed to

public policy". From the very nature of things, the

expressions "public policy", "opposed to public policy", or

"contrary to public policy" are incapable of precise

definition. If there is no head of public policy which covers a

case, then the court must in consonance with public

conscience and in keeping with public good and public

interest declare such practice as valid. Above all, in deciding

AIR 1986 Supreme Court 1571

any case which may not be covered by authority, our courts

have before them the beacon of light of the Preamble to the

Constitution. Lacking precedent, the court can always be

guided by that light and the principles underlying the

Fundamental Rights and Directive Principles enshrined in

our Constitution.

6.        He     relied      on        the   judgment   in    the   case    of

M.S.R.Leathers                v.       S.Palaniappan3    to     argue      the

requirements of filing a case under Section 138 of the

Negotiable Instruments Act.

7. In Basalingappa v. Mudibasappa4, wherein any

perverse findings of the trial Court if found can be interfered

with by the High Court.

8. On the other hand, the learned counsel for the

respondent would submit that there should be a valid

transaction between the parties which can be redressed in a

forum. Such transaction if any between the parties has to

be adjudicated by the competent forum. In the present case

(2013) 1 Supreme Court Cases 177

(2019) 5 Supreme Court Cases 418

it is the Rent Control Court to determine regarding the

quantum of amount to be given to the tenants/

Complainants. He further submits that even according to

the complainants, the complainants were still in the

premises and continue to be in the mulgies during trial. For

the said reason, even assuming that the amount of

Rs.25,00,000/- could be given as compensation, for the

reason of the complainants not vacating the premises ,they

are not entitled for the said amount. He relied upon the

very same judgments which were considered by the trial

Court in the case of Sri Krishna Khanna v. Additional

District magistrate, Kanpur5 and asserted that the finding

of the learned Magistrate regarding the validity and liability

of the documents under Exs.P1 and P2 should be

questioned before the Rent Control Court and not by

prosecuting under Section 138 of the Negotiable

Instruments Act. The other judgment relied upon is Hiten

P.Dalal v. Bratindranath Banerjee6, wherein the Hon'ble

Supreme Court held that there should be subsisting liability

AIR 1975 Supreme Court 1525

2001(2) ALD (Crl.) 234

to prosecute under Section 138 of the Negotiable

Instruments Act and unless such initial burden is

discharged by the complainant to show that there is any

legally enforceable debt, the burden will not shift to the

accused under Section 139 of the NI Act.

9. The argument that 'debt' and 'liability' mentioned in

section 138 NI Act are two different aspects and the learned

Magistrate erred in not considering the factum of "liability"

cannot be appreciated. The word liability is not defined

under Negotiable Instruments Act, as such, the general

meaning of liability has to be considered. Liability means

the state of being legally responsible for something, as per

the Oxford dictionary.

10. The learned Magistrate found that the enforceability

under Ex.P3 cheque can only be ascertained or determined

by the learned Rent Control Court as the liability pertains to

a tenant and owner. The other ground on which the learned

Magistrate has acquitted was that it is not a legally valid

contract under Section 23 of the Contract Act as it is

opposed to public policy. In the judgment of Gherulal

Parakh v. Mahadeodas Maiya7, it was held by the Hon'ble

Supreme Court that the Courts have time and again said

that where a contract does not fit into one or other of these

pigeon-holes but lies outside this charmed circle, the courts

should use extreme reserve in holding a contract to be void

as against public policy, and should only do so when the

contract is incontestably and on any view inimical to the

public interest.

11. The complainant-P.W.1 during the course of cross-

examination deposed as follows:

" I do not know whether there is no payment of compensation and surrender of possession under the rent control act. It is true I am continuing in the one of the mulgi of the accused which was provided by the accused to me even till today. The witness volunteers that the accused till payment of compensation to me by the accused he asked me to stay in the said mulgi."

12. Without adverting to the fact whether the amount of

Rs.25,00,000/- promised by the accused is legally enforceable or

liable, when the complainants continued to stay in the mulgi till

such date when they were examined in the court, the claim that

the amount was towards vacating the mulgi and loss of

AIR 1959 Supreme Court 781

business, cannot be accepted. The question of being

compensated for vacating the mulgi does not arise. In the said

circumstances, the appeal filed by the complainants fails.

13. Accordingly, the Criminal Appeal is dismissed. As a

sequel thereto, miscellaneous applications, if any pending,

shall stand closed.