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2010 DIGILAW 1257 (KAR)

Shet and Co. v. Kulyadi Krishna Pai

2010-12-09

H.G.RAMESH

body2010
ORDER H.G. RAMESH, J.—This appeal is by the complainant challenging the order of the II Addl. Sessions Judge, Mangalore, Dakshina Kannada in Crl. A. No. 17/2005 dated 13-5-2009. 2. According to the complainant, accused had availed loan from the complainant on 5-9-2000 and also on subsequent dates to the tune of Rs. 11,25,000/- through seven cheques. Those cheques issued by the complainant were drawn on Indian Overseas Bank which were duly encashed by the accused, for which, the accused is said to have executed on demand Promissory Note apart from issuing a cheque for Rs. 11,25,000/- towards repayment drawn on Corporation Bank, Hampanakatta, Mangalore and on presentation of the cheque, it was dishonoured with an endorsement ‘insufficient funds’. After issuing legal notice, complaint was filed before the V JMFC, Mangalore. The learned Magistrate after enquiry, convicted the accused for the offence punishable under Section 138 Negotiable Instruments Act, 1881 (for short the ‘N.I. Act’ ) and directed to pay a sum of Rs. 12,00,000/- out of which, it was ordered to pay Rs. 5,000/- towards fine and Rs. 11,50,000/- to be paid to the complainant as compensation. Against the said order, the accused preferred an appeal before the Sessions Judge, wherein he has allowed the appeal in part on the ground that accused had admitted that he had borrowed Rs. 1 lakh and not Rs. 11,25,000/- and acquitted the accused stating that no offence is made out under Section 138 of the N.I. Act. Being aggrieved, the complainant has preferred this appeal. 3. Heard. On perusal of the impugned order passed by the appellate Court, it is noticed that the appellate Court noted that the complainant has not stated anything about the interest which is charged on the amount as stated in the cheques while giving loan to the accused and accordingly, opined that it is suspicious as to whether loan was given by the complainant to the accused or not and no other document was produced towards lending of the money. By relying upon the judgment of the Apex Court in the case of Krishna Janardhan Bhat vs. Dattatraya G. Hegde, 2008 (6) Kant. L.J. 538, the appellate Court reversed the finding of the trial Court throwing burden on the complainant. 4. By relying upon the judgment of the Apex Court in the case of Krishna Janardhan Bhat vs. Dattatraya G. Hegde, 2008 (6) Kant. L.J. 538, the appellate Court reversed the finding of the trial Court throwing burden on the complainant. 4. The Apex Court in the case of Rangappa vs. Mohan, AIR 2010 SC 1898 while reversing the ratio laid down in Krishna Janardhan’s case cited supra, held that when the cheque is issued, it is deemed to be a cheque issued towards legally enforceable debt under Section 138 of N.I. Act and it is for the accused to rebut the presumption not only by offering the explanation but proof of explanation has to be produced. 5. In the case on hand, according to the complainant when admittedly, the amount was encashed by the accused through the cheques issued by the complainant and towards return of the amount, the accused had issued a cheque and when it was dishonoured, then, it necessarily amounts to commission of offence under Section 138 of N.I. Act if the amount is not paid on such receipt of legal notice. The stand of the accused is that he borrowed only Rs. l lakh and at that time, he had given a cheque to the complainant as a security. The appellate Court by relying upon the reply of the accused at Ex. P5 that accused had availed loan of Rs. 1 lakh and not Rs. 11,25,000/- from the complainant, directed the accused to pay Rs. 1 lakh as compensation to the complainant. The appellate Court proceeded on the ground that D.W. 1 was not cross examined by the complainant and as such, say of the accused is taken as a gospel truth without examining the fact that as per the complainant, the amount was paid through cheques to the accused and all those cheques were duly encashed by the accused and it should have verified whether those cheques issued by the complainant were towards payment of loan and whether the cheques were encashed or not. It is also not the case of the accused that the amount encashed by him is towards some other transaction. In the circumstances, the finding of the appellate Court is erroneous and without appreciating the material on record. 6. Hence, this appeal is allowed. The impugned order dated 13-5-2009 passed by the II Addl. Sessions Judge, D.K., Mangalore in Crl. It is also not the case of the accused that the amount encashed by him is towards some other transaction. In the circumstances, the finding of the appellate Court is erroneous and without appreciating the material on record. 6. Hence, this appeal is allowed. The impugned order dated 13-5-2009 passed by the II Addl. Sessions Judge, D.K., Mangalore in Crl. A. No. 17/2005 is set aside and the order dated 17-12-2004 passed by the V JMFC, Mangalore in C.C. No. 2521/2003 is restored. The accused is hereby directed to pay the compensation of Rs. 12 lakhs to the complainant, out of which, Rs. 5,000/- has to be paid towards fine amount, within a period of three months from today, failing which, he shall undergo simple imprisonment for one year.