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2013 DIGILAW 387 (KAR)

M. S. Puttaswamy @ Shivarajkumar v. M. Venkatesh

2013-03-22

A.S.PACHHAPURE

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JUDGMENT 1. The appellant has challenged the Judgment and Orders, acquitting the respondent for the charge under Section 138 of the Negotiable Instruments Act [hereinafter referred to as "the N.I. Act" for short] by setting aside the conviction ordered by the Chief Judicial Magistrate, Bangalore, in C.C. No.322/2003 and C.C. No.1793/2003 respectively, dated 22.12.2005. 2. The facts relevant for the purpose of these appeals are as under: As both the parties are same and there are common questions of law and facts, the appeals are taken up for consideration together. The appellant is said to have entered into two Agreements of Sale on 18.06.1998, with one Major C.K. Suresh, agreeing to purchase sites bearing Nos.377 and 378 in Sy. No.15/1 to 15/4 of Gedlahalli village, Bangalore North Taluk for a valuable consideration of Rs.31,50,000-00. The respondent is said to have represented himself as an absolute owner of the aforesaid properties and had consented for execution of two separate Sale Agreements and signed the Agreements as a consenting witness. The appellant had paid a sum of Rs.37 lakhs on various dates being part of the sale consideration. Later the appellant issued a paper publication in a newspaper dated 22.08.1998 inviting objections from the general public to purchase the aforesaid properties. The appellant later came to know that the respondent is not the real owner and had no right or title to enter into Agreements of Sale with Major C.K. Suresh and hence demanded the money from Major C.K. Suresh. The said Major C.K. Suresh had agreed to refund a sum of Rs.47 lakhs and in pursuance of this agreement, the respondent issued the cheque bearing No.270402 dated 10.02.1999 for a sum of Rs.8 lakhs drawn on Syndicate Bank, Sadashivanagar, Bangalore. In the other case, the respondent issued another cheque bearing No.270404 dated 16.07.1999 for a sum of Rs.5 lakhs drawn on the same bank. The appellant presented these two cheques for encashment and they returned with an endorsement "insufficient funds". He issued legal notices on 27.07.1999 and the said notices were served on the respondent. The appellant claims that the respondent issued an evasive reply dated 09.08.1999. As the respondent failed to pay the cheque amount, the appellant filed complaints in C.C. No.322/2003 for the bounced cheque for a sum of Rs.8 lakhs and C.C. No.1793/2003 another cheque for a sum of Rs.5 lakhs. The appellant claims that the respondent issued an evasive reply dated 09.08.1999. As the respondent failed to pay the cheque amount, the appellant filed complaints in C.C. No.322/2003 for the bounced cheque for a sum of Rs.8 lakhs and C.C. No.1793/2003 another cheque for a sum of Rs.5 lakhs. The respondent appeared in the trial Court in both the cases and the appellant was examined as P.W.1 and in his evidence documents Exs.P1 to 10 were marked [same number of exhibits in both the cases]. Statement of the respondent was recorded under Section 313 Cr.P.C. The respondent is examined as D.W.1 in both the cases. The trial Court after hearing the learned counsel for the parties and on appreciation of the material on record, convicted the respondent in both the complaints and ordered him to pay double the cheque amount, in default to undergo simple imprisonment of one year in both the cases. Aggrieved by the conviction and sentence, the respondent preferred Criminal Appeal Nos.120/2005 and 121/2005. Under the impugned Judgment and Order, the learned Presiding Officer of the appellate Court has allowed the appeals by setting aside the convictions and sentence and acquitted the respondent for the charge under Section 138 of the N.I. Act. Aggrieved by the orders of acquittal, the present appeals have been filed. 3. I have heard learned counsel for both the parties. 4. The point that arises for my consideration is; Whether the appellant has made out any grounds to warrant interference in the Judgment and Orders, acquitting the respondent for the charge under Section 138 of the N.I. Act? 5. It is the submission of learned counsel for the appellant that the signature on the cheque is not in dispute and from the material placed on record, the existence of debt has been satisfactorily proved. Therefore, he contends that presumption arises under Section 139 of the Act that the cheque was issued towards payment of the dues. He also contends that there is no material on record to rebut the presumption and hence the first appellate Court erred in granting the orders of acquittal in favour of the respondent. Therefore, he contends that presumption arises under Section 139 of the Act that the cheque was issued towards payment of the dues. He also contends that there is no material on record to rebut the presumption and hence the first appellate Court erred in granting the orders of acquittal in favour of the respondent. On the other hand, learned counsel for the respondent supporting the Judgment of the first appellate Court contends that there is no contract between the parties and the respondent is not a party to the Agreement of Sale and that the material available in the case is sufficient to rebut the presumption that arises under Section 139 of the N.I. Act. Hence, he contends that the appeals have no merits. 6. To raise the presumption under Section 139 of the N.I. Act, it is necessary for the appellant to discharge the initial burden and in this regard, the appellant refers to the cheques at Ex.P5 in both the cases. In one case, it is for a sum of Rs.8 lakhs and in other case, it is for Rs.5 lakhs. The signature of the respondent on these cheques are not in dispute. Ex.P6 is the return memo and these documents reveal that these cheques were returned with an endorsement "insufficient funds'. Ex.P7 is the copy of the notice dated 27.07.1999 by the appellant demanding the sum mentioned in the cheques. Ex.P8 is the xerox copy of the postal acknowledgment. Ex.P9 is the reply notice issued by the respondent. 7. Though a contention is raised that the acknowledgement at Ex.P8 is a xerox copy and that there is no material on record to prove the service of notice, in the reply notice Ex.P9, the respondent has said that 3 notices dated 27.07.1999 issued by the appellant are placed in the hands of his counsel for giving reply. The reply of the respondent is dated 09.08.1999 and hence it would be inferred that the respondent replied the notice within 15 days of the notice issued by the appellant. Therefore, the contention that Ex.P8-acknowledgement does not pertain to these cases has no relevance as the respondent has replied the notice within 15 days of the notice at Ex.P7. Therefore, it cannot be said by any stretch of imagination that the service of notice is not within 15 days. The appellant has presented the complaints in the trial Court on 17.09.1999. Therefore, it cannot be said by any stretch of imagination that the service of notice is not within 15 days. The appellant has presented the complaints in the trial Court on 17.09.1999. The appellant could have filed the complaint within one month from the date of which the cause of action arises under Section 138 of the N.I. Act and Clause (c) of the proviso provides that in case if the drawer of the cheques make the payment of the said money to the payee within 15 days of receipt of the said notice, a cause of action would arise in favour of the appellant to file the complaint. Therefore, there is no substance in the contention of the respondent that Ex.P8 is a xerox copy and has no nexus with this case. 8. The copies of the Sale Agreements produced at Exs.P2 and 3 would reveal that the sites in khata Nos.377 and 378 formed out of Sy. Nos.15/1 to 15/4 were of the ownership of one Krishna Murthy, who died intestate on 25.05.1976, leaving behind his wife K. Venkubai and the children K. Saraswathamma, K. Vanajakshi, K. Chandrakant, Suresh, Sunanda and Savitha as his legal representatives. This fact is mentioned in the Agreement itself. The aforesaid legal representatives who succeeded to the property executed a general power of attorney dated 07.09.1981 in favour of the respondent. It is also stated in these agreements that K. Venkubai and legal representatives, to meet their financial requirement, agreed to sell these sites in favour of the respondent and from him they received the entire sale consideration on 09.07.1981 and handed over possession of the said lands to the respondent [accused]. It is also recited in the agreement that the general power of attorney is executed by K. Venkubai and others in favour of the respondent and is registered in the office of the Sub-Registrar. Under the power of attornies dated 07.09.1981 and 02.04.1991, the aforesaid owners authorized the respondent to sell the said sites. So, in pursuance of these power of attornies the respondent entered into an Agreement of Sale with Major C.K. Suresh on 04.03.1998 and said to have handed over possession of the sites and received the entire sale consideration. Under the power of attornies dated 07.09.1981 and 02.04.1991, the aforesaid owners authorized the respondent to sell the said sites. So, in pursuance of these power of attornies the respondent entered into an Agreement of Sale with Major C.K. Suresh on 04.03.1998 and said to have handed over possession of the sites and received the entire sale consideration. These facts enumerated above are borne out from the agreements produced at Exs.P2 and 3 and it is in this context that as Major C.K. Suresh was in possession of the sites on the basis of the Agreement of Sale executed by the respondent, entered into the Sale Agreement-Exs.P2 and 3 the appellant. From the aforesaid facts, clearly mentioned in these agreements, it could be said that Major C.K. Suresh though was in possession of the properties after paying the sale consideration had not obtained a Sale Deed in his favour and it is in this context that the respondent who was present at the time of the Agreement of Sale had signed Exs.P2 and 3 on each pages, as a consenting witness. In para 16 of the Agreement, it is specifically mentioned that M. Venatesh [accused] owner in possession of the suit property has signed this agreement as consenting witness. So, the aforesaid fact would clearly goes to show that the words "consenting witness" mentioned in the agreement is not only to sign the agreement or the document as a witness, but also to take note of the facts in the said agreement. The respondent has admitted in his evidence that he has signed these two agreements i.e., Exs.P2 and 3 on each of the pages. 9. It is no-doubt true that the appellant entered into an Agreement of Sale to these sites with Major C.K. Suresh, but, it is only because that the respondent had executed the Agreement of Sale in favour of Major C.K. Suresh. The contents of these agreements have a clear reference that sum of Rs.31,50,000-00 was paid to Major C.K. Suresh, there is no reference of the respondent having received any sum under Exs.P2 or 3. But, anyhow, the perusal of Exs.P2 and 3 would clearly reveal that prior to Exs.P2 and 3, Major C.K. Suresh has paid sale consideration to the respondent/accused and had agreed to sell the sites in his favour. But, anyhow, the perusal of Exs.P2 and 3 would clearly reveal that prior to Exs.P2 and 3, Major C.K. Suresh has paid sale consideration to the respondent/accused and had agreed to sell the sites in his favour. So, in case, if the sale was cancelled for any reason in law, Major C.K. Suresh and also the respondent were liable to refund the advance sale consideration received under the aforesaid agreements. 10. Though it is contended that the payments were made to Major C.K. Suresh and not to the respondent, from the material placed on record, there appears to be an understanding between major C.K. Suresh and the respondent and that could be made out from the other evidence which has been brought on record. It is relevant to note that after Exs.P2 and 3-Sale Agreements, the appellant had issued public notices, calling upon objections of the public, if any, to purchase the aforesaid properties and P.W.1, the complainant says in his evidence that the respondent and Major C.K. Suresh had no title to the properties and therefore, he approached them for refund of the advance sale consideration. In the reply notice-Ex.P7 the appellant has made it clear that he came to know that the respondent is not the owner of two sites and therefore demanded refund of money and compensation and he states that major C.K. Suresh and the respondent agreed to pay the compensation and the respondent agreed to pay Rs.32 lakhs, whereas major C.K. Suresh agreed to pay a sum of Rs.15 lakhs. It is also alleged in the notice that towards payment of the sum at Rs.32 lakhs, the cheques bearing Nos.270401, 270402, 270403, 270404 and 270406 were issued by the respondent for a total sum of Rs.32 lakhs. Amongst these cheques which were issued in favour of the appellant, that two cheques for a total sum of Rs.12 lakhs i.e., cheque No.270401 for Rs.7 lakhs and cheque bearing No.270406 for Rs.5 lakhs were taken back by paying cash of Rs.12 lakhs and therefore, the appellant claims that he was due for a sum of Rs.20 lakhs from the respondent. This agreement regarding repayment of Rs.20 lakhs as alleged by the appellant is not admitted by the respondent. This agreement regarding repayment of Rs.20 lakhs as alleged by the appellant is not admitted by the respondent. He denies issuance of 4 cheques towards Rs.32 lakhs and he contends that there was threat and duress through the police for issuance of these cheques and ultimately has issued the reply notice at Ex.P9 in which he states as follows: "That, our client is not aware as to what is the total amount received by the said major C.K. Suresh from the purchasers [your client and Smt. Sharadamma]. As per the understanding between our client and the said major C.K. Suresh our client was paid a sum of Rs.20,00,000-00 [Rupees twenty lakhs only] by the said major C.K. Suresh. Your clients have not paid any amount to our client." So, at least to the extent of Rs.20 lakhs, there is an admission of the respondent that he had received the sum from Major C.K. Suresh. Therefore, to the extent of this amount, the respondent has a liability to pay the amount. No-doubt, it is true that the appellant states that there was an understanding that the respondent was to pay Rs.32 lakhs, the understanding is not reduced in writing and is proved on the basis of the material placed on record. It is the defence of the respondent that at the time of issuance of the cheques, he was called by the Police and was asked to issue the cheques by use of threat and force. This contention has been taken by the respondent in his reply notice and the mere fact that he had not filed any complaint to the Police is of no help as the appellant seems to be a popular person as compared to the respondent. It may be that as the respondent had no title to the property, the appellant might have forced him to pay compensation and therefore, under that compulsion the respondent might have agreed to pay a sum of Rs.32 lakhs. This agreement between the parties having come into existence by use of force, it may not be proper to consider the said understanding as an agreement. But, at least to the extent of Rs.20 lakhs the respondent has admitted it in his reply notice. 11. This agreement between the parties having come into existence by use of force, it may not be proper to consider the said understanding as an agreement. But, at least to the extent of Rs.20 lakhs the respondent has admitted it in his reply notice. 11. In para 10 of the notice at Ex.P9 it is stated that he had paid Rs.12 lakhs to the appellant and took back 2 cheques, what remains after payment of Rs.12 lakhs is Rs.8 lakhs. To this extent, the appellant is entitled to recover it from the respondent. The material placed on record is sufficient only to hold that after deducting the amount of Rs.12 lakhs, the respondent is liable to pay Rs.8 lakhs and as this liability has been proved satisfactorily and as the cheque for Rs.8 lakhs issued by the respondent in C.C. No.322/2003 was returned with endorsement of insufficient funds, the respondent is liable to pay this amount under the cheque in addition to the penalty. 12. So far as the cheque for Rs.5 lakhs in C.C. No.1793/2003 is concerned, the appellant has failed to establish that he was due for additional sum of Rs.5 lakhs and as the cheque was obtained by use of force, and that too towards the compensation which agreement is not proved, the appellant cannot claim the said amount as the liability is not proved. Therefore, I am of the opinion that the first appellate Court committed an error in allowing the appeal of the respondent in Crl.A. No.2314/2006. The dismissal of the appeal in Crl.A. No.2315/2006 by the learned Fast Track Court is just and proper. As the liability is of the year 1999, the interest of justice would be met in case if one and half times of the cheque amount is ordered to be paid as fine. In the result, Crl.A. No.2315/2006 is dismissed. Crl.A. No.2314/2006 is allowed by setting aside the Judgment and Order of acquittal by the first appellate Court. The Judgment and Order of the first appellate Court in Crl.A. No.120/2005 is set aside affirming the conviction of the respondent for the offence under Section 138 of the N.I. Act as ordered by the trial court in C.C. No.322/2003. The sentence is modified. The respondent is ordered to pay a fine of Rs.12 lakhs, in default to undergo simple imprisonment for one year. The sentence is modified. The respondent is ordered to pay a fine of Rs.12 lakhs, in default to undergo simple imprisonment for one year. On deposit of the fine, a sum of Rs.11,95,000-00 shall be paid to the appellant [complainant] and the balance amount shall be credited to the State as fine.