Research › Search › Judgment

Karnataka High Court · body

2008 DIGILAW 546 (KAR)

Upendra Kumar v. Don Finance Corporation

2008-09-24

MOHAN M.SHANTANAGOUDAR

body2008
Judgment :- Mohan Shantanagoudar, J. This revision petition is filed by the convicted accused. The respondent is the complainant. The petitioner is tried for the offence punishable under Section 138 of the Negotiable Instruments Act before the learned V.J.M.F.C., Mangalore, in C.C.No.11/2003. After recording the evidence and after hearing the parties, the trial Court by its order dated 29th October 2004, convicted the accused and sentenced him to undergo simple imprisonment for a period of one month and to pay compensation of Rs.40,000/- to the complainant, with default clause. The judgment and order of the trial Court is confirmed by the Sessions Court, Dakshina Kannada, Mangalore, in Criminal Appeal No.385/2004, dated 15th February 2006. .2. Case of the complainant in brief is that: the accused has borrowed a loan of Rs.15,000/- and Rs.6,000/- on 210.1993 and 12.1993 respectively from the complainant, agreeing to pay interest at the rate of 23% p.a. Towards repayment of the said loan, the accused has issued a cheque Ex. P1 dated 11.1996 drawn on Mangala Credit Co-operative Society Ltd., Kodialbail, Mangalore, for Rs.24,168/- in favour of the complainant. On presentation, the said cheque was returned with an endorsement of "insufficient funds". After complying with all the necessary statutory requirements, the complaint came to be lodged. The complainant got examined himself as PW-1 and got marked 15 exhibits. On behalf of the accused, two witnesses are examined, including the accused and two documents were got marked. 3. As aforementioned, both the Courts below have concurrently held against the accused and convicted for the offence under Section. 138 of Negotiable Instruments Act. Questioning both the Judgment and orders, the petitioner has filed this revision petition. .4. It is contended on behalf of the petitioner that the cheque is not presented to a Bank, but was presented to a Co-operative Society and as the cheque was not presented to the Banker, the proceedings vitiate. The very contention was raised by the petitioner herein before the Courts below. The Courts below on evaluating the material on record, have concluded on facts that the Mangala Credit Co-operative Society is not a merely a Co-operative Society, but it is a Co-operative Society doing Banking business also. 5. In this context, it is relevant to note the definition of "Banker" as found in Section 3 of the Negotiable Instruments Act. The Courts below on evaluating the material on record, have concluded on facts that the Mangala Credit Co-operative Society is not a merely a Co-operative Society, but it is a Co-operative Society doing Banking business also. 5. In this context, it is relevant to note the definition of "Banker" as found in Section 3 of the Negotiable Instruments Act. The word "Banker" is defined as under: Section 3: "Banker - Banker includes any person acting as a Banker and any post office savings bank." Thus, the scope of Banker" under the Negotiable Instruments Act is so wide and enhanced that it includes any person acting as a Banker. In fact, it also includes the post office savings Bank. Banking, need not necessarily be a business run with a profit motive. As a matter of fact, Banking is an evolutionary concept. It cannot be said that bodies which carry on business not with a profit motive, but with the incidents with which a business of Banking is associated, are not Banks. What makes a person a Banker is not what he does with the money of which he obtains the use by lending it at interest or by investing it, but by the terms upon which he obtains deposits of money from the Banking customers. If it was the intention of the legislature to restrict the meaning of Banker as per Banking Regulation Act, a specific provision would have been made in the Negotiable Instruments Act to define the word "Banker" as any person regulated by Banking Regulation Act. On the other hand, the legislature in its wisdom has enhanced the scope of the term "Banker" Linder Negotiable Instruments Act. The scope of term "Banker" under Negotiable Instruments Act is beyond the meaning included in the Banking Regulations Act, 1949. While defining the word "Banker", the language employed in the Section is "includes" which meant to ensure that not only Bank, Banker, or Banking institutions incorporated by the Act of Parliament or under the Banking Regulation Act, X of 1949, are within its ambit but also to embrace business of Banking. When a word is defined to "include", the definition is inclusive. Therefore, the scope of word "Banker" under Negotiable Instruments Act is vast and stretches beyond the Banking Regulation Act of 1949. 6. When a word is defined to "include", the definition is inclusive. Therefore, the scope of word "Banker" under Negotiable Instruments Act is vast and stretches beyond the Banking Regulation Act of 1949. 6. It is relevant to note that the accused has issued the cheque (withdrawal slip) in question (Ex.P-1) drawn on his account maintained at Mangala Credit Co-operative Society Ltd., in favour of the complainant, which means that the accused has an account in the said society and operates the same whenever needed. The withdrawal slips are issued by the society and the society has issued the endorsement as per Ex. P-2 that the request in the withdrawal slip (Ex.P-1) cannot be cleared as the funds are not sufficient in the account of the accused. The evidence of DW-1 - the Manager of Mangala Credit Co-operative Society, reveals that though the society has not obtained permission of the Reserve Bank to convert itself into a Co-operative Bank, does Banking business regularly with its members. Thus, both the Courts below on facts, have rightly found that the Mangala Credit Cooperative Society does Banking business also and therefore, it falls within the definition of "Banker" as defined under the Negotiable Instruments Act. 7. The accused has admitted that he has taken loan of Rs. 21,000/-in the year 1993 from the complainant in two installments. However, his defence is that he has repaid the entire amount and the cheque issued by him is misused by the complainant. He further admits that he had paid the interest till 310.1994. Even though PW-1 admits that the accused has repaid the interest portion for certain period, has denied the suggestion relating to repayment of loan (principal amount). This clearly goes to show that there was money transaction between the parties and that the accused has borrowed a sum of Rs. 21,000/-from the complainant. The amount involved in the cheque is Rs. 24,168/-, which necessarily contains the principal amount and interest for certain period. Both the Courts below on evaluating the material on record in proper perspective have rightly concluded that the accused has committed the offence punishable under Section 138 of the Negotiable Instruments Act. 8. The presumption arising under Section 139 of the N.I. Act is not rebutted by the accused. It is also not in dispute that all the necessary statutory requirements are followed by the complainant prior to lodging of the complaint. 8. The presumption arising under Section 139 of the N.I. Act is not rebutted by the accused. It is also not in dispute that all the necessary statutory requirements are followed by the complainant prior to lodging of the complaint. This Court does not find any error in the appreciation of the evidence made by the Courts below. In view of the same, the judgments and orders of conviction passed by the Courts below cannot be interfered with. 9. However, at this stage, Learned Counsel appearing for the petitioner submits that the petitioner has already deposited Rs. 20,000/-before the Trial Court in pursuance to the interim order of this Court. On the said basis, he prays for leniency in sentence. Having regard to the totality of the facts and circumstances of the case, in my considered opinion, interest of justice will be met if the sentence of imprisonment imposed by the Courts below is set aside and the sentence relating to tine is modified suitably. Accordingly, the following order is made: .(a) The sentence of imprisonment of one month imposed by the Courts below is set aside. .(b) Thepetitioner is sentenced to pay a fine of Rs.45,000/- (Rupees Forty-five thousand only). .(c) As the petitioner is stated to have deposited Rs.20,000/-already, the remaining amount of Rs.25,000/ - shall be deposited by him within four months from today. In default to pay/deposit balance of-the fine amount within the stipulated period, the petitioner shall undergo simple imprisonment fin a period of one month. If the fine amount is recovered fully, an amount ofRs.40,000/- shall be paid to the respondent-complainant. The remaining amount of Rs.5,000/- shall vest in the State. Criminal Revision petition is disposed of accordingly.