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2012 DIGILAW 35 (KAR)

T. B. Venkatesh v. M. Narayana Swamy

2012-01-11

K.N.KESHAVANARAYANA

body2012
JUDGMENT K.N. KESHAVANARAYANA, J.—This appeal by the Complainant is directed against the judgment and order dated 26-4-2006 passed by the 20th Addl. Chief Metropolitan Magistrate, Bangalore City in C.C No. 19636/2003 acquitting the respondent-accused of the charge levelled against him for the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter referred to as ‘the Act’). 2. The appellant filed a private complaint under Section 200 Cr.P.C against the respondent alleging offence under Section 138 of the Act inter alia contending that the accused had borrowed huge sums of money from the complainant from time to time as hand loan; that in order to discharge the said loan the accused issued cheque bearing No. 067141 dated 5-6-2008 drawn on Syndicate Bank, K.R. Puram, Bangalore, for Rs. 5,98,822/-; that when the said cheque was presented for encashment, the same was returned unpaid with banker’s endorsement “Account closed”; that immediately the complainant caused a legal notice to the accused informing him about the dishonour of the cheque and calling upon him to pay the amount covered under the cheque; that though the accused received the notice, failed to comply with the demand made thereunder, thereby the accused is guilty of offence punishable under Section 138 of the Act. 3. Upon his appearance before the learned Magistrate, the accused pleaded not guilty for the accusation made against him and claimed to be tried. In support of his contention, the complainant examined himself as P.W. 1 and also marked documentary evidence Exs. P1 to P13. The accused examined himself as DW 1. During the cross-examination of P.W. 1, Exs. D1 to D3 were marked. During cross-examination of DW 1, Exs. P14 and P15 were marked. 4. The defence of the accused was that during the year 1998 the complainant became partner of a firm called M/s, Media Printers as per the terms of Deed of Partnership Ex. P1 by investing Rs. 20 lakhs as his capital contribution; that on 1-4-2000 the complainant retired from the said firm as evidenced by Ex. D2 Deed of Partnership (Retirement-cum-Continuance of Partnership) dated 1-4-2000 whereunder the amount payable to the complainant towards his capital investment was determined at Rs. 9,01,178.29 ps. P1 by investing Rs. 20 lakhs as his capital contribution; that on 1-4-2000 the complainant retired from the said firm as evidenced by Ex. D2 Deed of Partnership (Retirement-cum-Continuance of Partnership) dated 1-4-2000 whereunder the amount payable to the complainant towards his capital investment was determined at Rs. 9,01,178.29 ps. that at the time of signing the reconstitution deed, as security, the accused delivered the cheque in question to the complainant: that though subsequently the aforesaid amount due to the complainant on account of his retirement from the partnership firm was paid, the complainant did not return the cheque in question but the same has been subsequently misused by the complainant. Thus, according to the accused, the cheque in question was not issued for discharge of any debt or liability due to the complainant. It was also Ms defence that the cheque in question relates to the current account held in the name of partnership firm; during the period when the complainant was one of the partners, and even to the knowledge of the complainant the said account was closed on 20-8-2002, as such, the complainant knew very well that the cheque relate to the partnership firm and handed-over to him at the time of parties signing the reconstitution deed dated 1-4-2002 and not on 5-6-2003 as sought to be made-out. Therefore, the accused contended that he is not guilty of offence punishable under Section 138 of the Act. 5. The learned Magistrate on assessment of oral and documentary evidence, by the judgment under appeal, held that though presumption under Section 138 of the Act is in favour of the complainant that the cheque in question had been received by him for discharge of debt due to him, the circumstances brought-out in the cross-examination of P.W. 1 are sufficient to indicate that the said presumption has been rebutted by the accused and in the absence of any positive evidence to establish the existence of debt, it cannot be held that the cheque in question had been issued for discharge of existing debt or liability due by the accused to the complainant. The learned Magistrate also held that the complainant has suppressed the fact of his becoming partner of the firm with the accused and also about his retirement from the partnership firm, The learned Magistrate also noticed that the admission made by the complainant in the cross-examination is sufficient to probabalise the defence theory. In that view of the matter, the learned Magistrate acquitted the accused and dismissed the complaint, Aggrieved by the said judgment of acquittal, the complainant is before this Court in this appeal. 6. I have heard the learned counsel for the appellant as well as the respondent and perused the records of trial Court as also the judgment under appeal. 7. The submissions of learned counsel for the appellant are that the judgment of the Court below suffers from perversity and illegality in as much as the Court below has erroneously recorded a finding that the statutory presumption under Section 139 of the Act has been rebutted by the accused though the accused has not placed any acceptable evidence in that regard; that since the accused has admitted borrowing of monies from the complainant and since the cheque in question relates to the account held by the respondent with the banker and since the said cheque was dishonoured when presented for encashment for the reason of closure of the account, there was nothing for the complainant to prove in the light of the presumption available under Section 139 of the Act, therefore it was for the accused to rebut the said presumption by placing acceptable evidence; that the accused has not placed any such evidence to rebut the presumption, therefore the Court below has committed error in acquitting the accused; that the very admission made by the accused in the cross-examination establishes that he had borrowed monies from the complainant on several occasions in different capacities, namely, as individual, as partner of firm and as Managing Director of a private company, therefore, the amount covered under the cheque in question was found to be due to the complainant from the partnership as evidenced in Ex. D2; that the defence of the accused that Rs. 9 lakhs and odd mentioned in Ex. D2; that the defence of the accused that Rs. 9 lakhs and odd mentioned in Ex. D2 has been paid by means of Demand Draft is also found to be false in the light of his admission that the demand draft which he referred to was in respect of the loan due by Media Printers (P) Ltd., and it has nothing to do with the amount covered under the cheque in question nor the amount due as stated in Ex. D2; that the Court below has mis-directed itself to the other transactions between the complainant and the accused in different capacities without directing itself to the specific case of the complainant; that the transaction in question was between the complainant and the accused and the cheque in question had been issued for discharge of debt due by the accused to the complainant, therefore, the learned counsel submitted that the judgment under appeal warrants interference and the respondent-accused has to be held guilty of the charge levelled against him. 8. Per contra, learned counsel for the respondent-accused sought to justify the judgment under appeal contending that the judgment under appeal does not suffer from any perversity or illegality in as much as the Court below on proper appreciation of oral and documentary evidence has recorded a finding that the presumption under Section 139 of the Act has been rebutted by showing that the cheque in question was not issued for discharge of any debt or liability due by the accused to the complainant, therefore, the judgment under appeal does not call for interference by this Court. 9. In the facts and circumstances of the case, the point that arise for consideration is, whether the judgment under appeal suffers from any perversity or illegality warranting interference by this Court? 10. Perusal of the records indicate that the accused has not disputed the fact that the cheque in question relates to the account of Media Printers in Syndicate Bank, K.R. Puram and it bears his signature as “Authorised Signatory” of the firm. As could be seen from the very defence of the accused, he has admitted delivery of cheque to the complainant duly signed by him. The fact that the cheque in question, when presented for encashment, was returned unpaid with banker’s endorsement “account closed” is not in dispute. As could be seen from the very defence of the accused, he has admitted delivery of cheque to the complainant duly signed by him. The fact that the cheque in question, when presented for encashment, was returned unpaid with banker’s endorsement “account closed” is not in dispute. Under Section 139 of the Act, the Court has to presume that the holder of the cheque has received the cheque for discharge of debt or liability due to him by the drawer. Of course, it is a rebutable presumption, It is for the drawer of the cheque to rebut the said presumption. It is now fairly settled by catena of decisions that standard of proving the defence is preponderance of probabilities and not proof beyond reasonable doubt. It is sufficient if the accused probabalises his defence theory. In order to rebut the presumption under Section 139 of the Act the accused will have to establish that there was no debt in existence or that the cheque was not issued for discharge of any debt or liability. It is fairly well settled that in order to prove Ms defence and rebut the presumption under Section 139 of the Act the accused is not required to lead positive evidence either by examining himself or by examining witnesses. In order to rebut the said presumption, it is open to the accused to rely on the very evidence placed by the complainant and by pointing-out the circumstances brought-out on record in the evidence of the complainant itself the accused could establish that the presumption under Section 139 of the Act has been rebutted. In that event, the burden shifts on to the complainant to prove the existence of debt and that the cheque was issued for discharge of such debt. Keeping the above principles in mind, let me consider the case on hand. 11. Ex. P5 is the copy of notice issued by the complainant in compliance of requirement of Clause (b) of Section 138 of the Act. As can be seen from the said notice, there is no mention as to on what date loan was advanced. It is stated therein that in order to repay the loan obtained, the accused had issued the cheque in question and on presentation of the same, it was returned unpaid. As can be seen from the said notice, there is no mention as to on what date loan was advanced. It is stated therein that in order to repay the loan obtained, the accused had issued the cheque in question and on presentation of the same, it was returned unpaid. In the complaint lodged before the learned Magistrate also similar averments are made without mentioning as to the date on which the loan, was advanced. In the complaint it is stated that accused had borrowed huge sums of money from the complainant from time to time as hand loan. On the basis of this averment, it appears that there were series of loan transactions between the complainant and the accused from time to time and the cheque in question purported to have been issued for discharge of the amount due by the accused. However, during the evidence, the complainant has not placed any evidence to establish that there was series of loan transactions between him and the accused and the cheque in question was issued for discharge of the amounts found due. 12. In the cross-examination the complainant, who was examined as P.W. 1, has admitted that he became partner of the firm Media Printers run by the accused in the year 1998 and retired from the said firm in 2000. There has been no averment in the complaint about the complainant becoming a partner of the said firm and his retirement. As noticed supra, Exs. D1 and D2 were marked during the cross-examination of P.W. 1. As can be seen from Ex. D1, which is a copy of Deed of Reconstitution of Partnership dated 1-4-1998, the complainant had agreed to become partner of M/s. Media Printers run by the accused and his wife and to invest Rs. 20 lakhs in the said firm, which amount to be treated as his capital contribution to the firm. Ex. D2 is the copy of Deed of Partner ship (Retirement-cum-Continuance of Partnership) in respect of Media Printers. As per the contents of Ex. D2, the complainant retired as partner from the firm and the amount due to him towards the capital investment was determined at Rs. 9,01,178.29 ps. Ex. D2 is dated 1-4-2000. Ex. D2 is the copy of Deed of Partner ship (Retirement-cum-Continuance of Partnership) in respect of Media Printers. As per the contents of Ex. D2, the complainant retired as partner from the firm and the amount due to him towards the capital investment was determined at Rs. 9,01,178.29 ps. Ex. D2 is dated 1-4-2000. As noticed supra, it was the specific defence of the accused that on determination of the amount due to the complainant as partner of Media Printers at the time of his retirement with effect from 31-3-2000, the cheque in question was delivered to him as security to hold the same till the accused pays the entire amount found due to the complainant as a retiring partner of the firm., Ex. D3 is the Certificate issued by Syndicate Bank where the partnership firm had Current A/c. No. 1058. According to this certificate, the said account was opened on 8-6-1996, even prior to the complainant becoming partner of the firm and the said account was closed on 20-8-2002. However, the author of this certificate is not examined. Nevertheless, the contents of Ex. D3 is not disputed by the complainant. According to him, he had no knowledge of closure of the account as stated in Ex. D3. Even as per Ex. D2, the complainant retired from the firm w.e.f. 31-3-2000. Therefore, his say that he had no knowledge about closure of the account on 20-8-2002 is acceptable. However, it cannot be said that the complainant had no knowledge that the cheque in question relates to the current account of the partnership firm of which he was also erstwhile partner. Therefore, at the time of issuance of the very cheque he must be having knowledge of the fact that the cheque relates to the partnership firm. The seal found on Ex. P1 cheque also indicate that the cheque relates to Media Printers and it is signed by the accused as “authorised signatory”. 13. From the evidence on record it is manifestly clear that the cheque in question relate to the partnership firm called Media Printers, of which the complainant was a partner from 1-4-1998 to 31-3-2000, This circumstance further fortifies the defence version that the cheque in question was delivered to the complainant at the time of parties signing Ex. D2. 14. 13. From the evidence on record it is manifestly clear that the cheque in question relate to the partnership firm called Media Printers, of which the complainant was a partner from 1-4-1998 to 31-3-2000, This circumstance further fortifies the defence version that the cheque in question was delivered to the complainant at the time of parties signing Ex. D2. 14. With regard to existence of debt, the complaint, as noticed supra, has not come out with any specific statement as to on what date the amount in question was paid. Assuming for the purpose of argument that on account of series of loan transactions between the complainant and the accused, the accused was clue in certain sum as on a particular day, then what is required to be established is that as on the purported date of issuance of cheque the accused was due to the complainant the amount as mentioned in the cheque. The complainant in Ms cross-examination has stated that he paid the amount covered under the cheque to the accused by means of a cheque. ‘The answer elicited from P.W. 1 in this regard read as under: (vernacular matter not given) Again, in the cross examination the complainant has stated as under: (vernacular matter not given) Thus, from the above admissions it is dear that the loan amount was paid by means of a cheque. However, though the complainant admits that he had no difficulty in producing the documents evidencing payment of loan by cheque, no such document has been produced. 15. It is pertinent to note the further admission made by P.W. 1 in the cross-examination with regard to existence of debt, for the discharge of which the cheque in question purported to have been issued. The relevant admission reads: (vernacular matter not given) From this admission it is clear that except the payment of Rs. 20 lakhs as capital investment as mentioned in Ex. D1, the complainant had not paid any other amount to the accused. He has also admitted that the amount of Rs. 20 lakhs mentioned in Ex. D1 is inclusive of the amount covered under the cheque in question. This admission creates doubt as to the very existence of the debt in question. 16. When according to the complainant apart from Rs. 20 lakhs mentioned in Ex. He has also admitted that the amount of Rs. 20 lakhs mentioned in Ex. D1 is inclusive of the amount covered under the cheque in question. This admission creates doubt as to the very existence of the debt in question. 16. When according to the complainant apart from Rs. 20 lakhs mentioned in Ex. D1 paid as capital investment he had not paid any other amount to the accused and when as per Ex. D2 the amount due to the complainant towards his capital investment in the partnership firm has been determined and when the complainant has admitted that the amount of Rs. 20 lakhs is inclusive of the amount covered under the cheque in question, in my considered opinion, the Court has rightly held that the presumption under Section 139 of the Act as to the existence of debt and cheque having been issued for discharge of the said debt, stood rebutted. 17. The admissions made by the complainant that apart from Rs. 20 lakhs mentioned in Ex. D1, no other amount has been paid by the complainant to the accused probabalise the defence theory that no other amount was due by him to the complainant and that the cheque in question was delivered to the complainant as security at the time of signing Ex. D2. 18. The question as to whether the accused has discharged the amount due by him as mentioned in Ex. D2 cannot be gone into in these proceedings for the simple reason that it is not the case of the complainant that the cheque in question had been issued for the discharge of any part of the amount due by the accused to the complainant as mentioned in Ex. D2. 19. As noticed supra, the specific case of the complainant is that accused took hand loan of Rs. 5 lakhs and odd from the complainant and it is for the discharge of the said hand loan the cheque in question had been issued. Therefore, even if it is held that the purported payment of Rs. 9 lakhs and odd by means of a D.D on behalf of Media Printers was in relation to loan transaction between the complainant and Media Printers (P) Ltd., as indicated in Ex. P14 and the amount mentioned in Ex. Therefore, even if it is held that the purported payment of Rs. 9 lakhs and odd by means of a D.D on behalf of Media Printers was in relation to loan transaction between the complainant and Media Printers (P) Ltd., as indicated in Ex. P14 and the amount mentioned in Ex. D2 has not been paid by the accused to the complainant, in the light of specific case of the complainant, it cannot be said that the cheque in question had been issued by the accused for discharge of the liability due by him under Ex. D2. The admissions made by the complainant and the contents of Ex. D1 and D2 are sufficient to hold that the presumption under Section139 of the Act stood rebutted. In the absence of any evidence placed by the complainant with regard to existence of debt, the Court below is justified in holding that the cheque in question was not issued for discharge of any debt due by the accused to the complainant, as projected by the complainant. 20. The findings recorded by the Court below are sound and reasonable on the basis of the evidence on record. Therefore, the judgment under appeal does not suffer from any perversity or illegality. Under the circumstances, I find no ground to interfere with the judgment under appeal. As such, the appeal lacks merit. 21. In view of the above discussion, the appeal is dismissed.