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2014 DIGILAW 200 (AP)

C. Ashok Kumar v. Anil Kumar Kunchanwar

2014-02-10

V.SURI APPA RAO

body2014
JUDGMENT :- This appeal is directed against the judgment of acquittal recorded by the Court of Special Judicial Magistrate of First Class, Mobile Court (PCR), Adilabad in CC No.66 of 2005 dated 6.9.2005, whereby the learned Magistrate found the accused-respondent not guilty of the offence punishable under Section 138 of the Negotiable Instruments Act ( for short "the Act"). 2. Aggrieved by the order of acquittal, the complainant has filed this criminal appeal. 3. For the sake of convenience, the parties shall be referred to as they are arrayed before the Court below. 4. Brief facts of the case are as follows. The complainant is a resident of Guda Rampur Village and he is a tailor. He has good relationship with the accused, who is a cloth merchant at Adilabad. Due to the relationship, the complainant used to deposit some amount with the accused of and on, and sometimes he used the amount on interest with a view to take back the said deposit taken from the accused whenever needed. The accused used to pass receipts whenever the amounts were kept with him. According to the complainant, an amount of Rs.1,20,000/- was kept with the accused on different dates, under 8 receipts in number filed by him. When the complainant was in need of the amount, he demanded the accused several times to return the amount, but the accused, after sometime, had issued a cheque bearing No.925610 dated 31.3.2004 drawn on the State Bank of Hyderabad, Adilabad for Rs.1,20,000/- in the name of the complainant. The complainant thereafter presented the same but it was dishonoured on the ground that the account of the accused was closed. The complainant therefore issued legal notice on 5.4.2003 calling upon the accused to pay the cheque amount, but the accused replied the same with false allegations denying the issuance of cheque. Therefore, the complainant filed the present case against the accused. 5. On behalf of the complainant, PWs.1 and 2 were examined and Exs.P1 to P21 were got marked. The accused examined DWs.1 and 2 and got marked Exs.D1 and D2. 6. Therefore, the complainant filed the present case against the accused. 5. On behalf of the complainant, PWs.1 and 2 were examined and Exs.P1 to P21 were got marked. The accused examined DWs.1 and 2 and got marked Exs.D1 and D2. 6. Considering the oral and documentary evidence adduced by both parties, the trial Court found the accused not guilty of the offence alleged and dismissed the complaint on the ground that the complainant has failed to prove that the accused issued Ex.P1 cheque towards legally enforceable debt and that the complainant is not having money lending business. Hence, this appeal by the complainant. 7. Learned Counsel for the appellant-complainant relying on Exs.P6, 10, 12, 14, 16, 18 and P20, submitted that when once the accused has admitted about the issuance of EX.P1 cheque, it is for the accused to rebut the presumption under Section 139 of the Act and that the accused in the instant case has failed to rebut the said presumption. He further submits that though initial burden of proof of transaction was discharged by the complainant, the accused failed to rebut the presumption, therefore the trial Court was not justified in acquitting the accused under Section 138 of the Act. 8. It is the specific case of the complainant that whenever he was having money he used to keep the amounts with the accused and he used to obtain receipts and that when he demanded the accused to return the amount, the accused issued cheque Ex.P1 towards legally enforceable debt. In support of his contentions, the learned Counsel relied on the decisions reported in C. Antony v. K.G. Raghavan Nair, 2002 (2) ALD (Crl.) 880 (SC); NEPC Micon Ltd. and others v. Magma Leasing Ltd., AIR 1999 SC 1952 and Hiten P. Dalal v. Bratindranath Banerjee, 2001 (2) ALD (Crl.) 234 (SC) = (2001) 6 SCC 16 . 9. In Magma Leasing Limited's case (supra), the Supreme Court held that when the cheque was returned by bank with endorsement 'account closed' it would amount to returning cheque unpaid because 'amount of money standing to credit of that account insufficient to honour the cheque' as envisaged in Section 138 of the Act, therefore Section 138 attracts. 10. 9. In Magma Leasing Limited's case (supra), the Supreme Court held that when the cheque was returned by bank with endorsement 'account closed' it would amount to returning cheque unpaid because 'amount of money standing to credit of that account insufficient to honour the cheque' as envisaged in Section 138 of the Act, therefore Section 138 attracts. 10. In Hiten P. Dalal's case (supra), the Supreme Court held that it is obligatory on the Court to presume the liability of the drawer for the amount of the cheque in every case where the factual basis for such presumption is established. Such a presumption can be rebutted by the drawer by proving on evidence that the holder of the cheque had not received the same towards the discharge of any liability. Such rebuttal does not have to be conclusively established. The Court must either believe the defence to exist or consider its existence to be reasonably probable. But mere explanation given by the drawer, although plausible, held, would not suffice. 11. Per contra, the learned Counsel for the accused submitted that out of 8 receipts 2 receipts were issued by the brother of the accused, for which the accused has no liability. He further contended that in the reply notice it has been clearly mentioned by the accused that the accused has borrowed Rs.1,20,000/- from one Bhagavanth Rao and that the said Bhagavanth Rao obtained blank cheque towards security from the accused. It is submitted by the accused that after some time the accused repaid the amount in cash, but the blank cheque issued by the accused was not returned by the said Bhagavanth Rao; that the same was given to the complainant and it was utilized for filing false complaint against the respondent accused. 12. Though the accused contended that cheque issued to Bhagavanth Rao, and that the case as filed by the complainant falsely utilizing that cheque, the accused did not examine the said Bhagavanth Rao to prove that he repaid the amount and that he did not obtain blank cheque issued to Bhagavanth Rao. In the evidence, the accused admitted that there were some transactions between the complainant and accused for the earlier period and that he borrowed Rs.45,000/- and he repaid some amount and for the balance amount of Rs.15,000/- he gave two plots in favour of the complainant. In the evidence, the accused admitted that there were some transactions between the complainant and accused for the earlier period and that he borrowed Rs.45,000/- and he repaid some amount and for the balance amount of Rs.15,000/- he gave two plots in favour of the complainant. The complainant also admitted that he has taken two plots from the accused for the amount due to him. The said transaction amount of Rs.45,000/- and delivery of two plots in the year 1997, do not relate to the present transaction. The complainant has furnished the details of all the amounts deposited from January 1997 to 2000 on different dates totalling to Rs.1,20,000/- for which the accused has issued EX.P1 cheque. The accused also admitted about the issuance of the cheque but contends that it was given to Bhagavanth Rao and it was utilized by the complainant to file the false complaint. 13. When once the complainant has discharged the initial burden of lending the amount on various dates, or the amount invested with a condition to repay the same with interest at 3% per annum, it amounts that the said deposits are legally enforceable debts due from the respondent accused. The evidence on record clearly indicates that the amount of one lakh and odd was credited to the account of the respondent accused. The accused, however, contended that it was received from Bhagavanth Rao, subsequently, he paid the same in cash for which he has not obtained any receipt to prove that he paid the amount to Bhagavanth Rao. In the reply notice issued by the accused, the accused stated that he has not mentioned that loan amount was discharged by cash after six months or that he demanded for return of blank cheques issued to the said Bhagavanth Rao for the purpose of the said amount. 14. Learned Counsel for the accused further contends that the complainant has no licence, therefore, the amount is not recoverable and hence the complaint under Section 138 of the Act is not maintainable. But it is seen from the record that the complainant in this case is doing small petty business and is in the habit of depositing some amounts with the respondent/accused with a request to repay the same whenever he needs with interest at 3% per annum. But it is seen from the record that the complainant in this case is doing small petty business and is in the habit of depositing some amounts with the respondent/accused with a request to repay the same whenever he needs with interest at 3% per annum. In token of the receipt of the said amounts, the respondent-accused has admittedly issued receipts in favour of the complainant agreeing to repay the same with interest at 3% per annum and that total amounts covered by the receipts are Rs.1,20,000/-. On the other hand, the accused has not produced any kind of evidence to the effect that the complainant is in the habit of doing money lending business and he has lend the amounts to various persons for interest. If he has any money lending business, there is no need to advance the amount of Rs.1,20,000/- for about 3 years from 1997 to 2000 on different dates. It appears that whenever he was having some amount, he used to give it to the accused with an obligation to repay the same with interest. Therefore, it can be treated as legally enforceable debt. When once the complainant has proved that the accused has received the amounts covered by the respondent and once the accused has admitted about the issuance of Ex.P1 cheque towards legally enforceable debt, the burden is on the accused to rebut the same stating that the cheque was not issued towards legally enforceable debt by examining the said Bhagavanth Rao, who said to have obtained blank cheque towards security for the amount advanced to the respondent/accused. When the accused failed to discharge the burden under Section 139 of the Act, it can be presumed that Ex.P1 was issued towards legally enforceable debt for the amount due to him from the accused. The trial Court has ignored the receipts passed by the accused who agreed to repay the same with interest at 3% per annum. When the respondent has failed to prove that Ex.P1 cheque was issued towards security to one Bhagavanth Rao, the trial Court, considering the present circumstances of the case, ought to have found that the accused is guilty of offence punishable under Section 138 of the Act. When the respondent has failed to prove that Ex.P1 cheque was issued towards security to one Bhagavanth Rao, the trial Court, considering the present circumstances of the case, ought to have found that the accused is guilty of offence punishable under Section 138 of the Act. In the evidence, it is clearly established that the respondent/accused received the amounts and later issued cheque towards legally enforceable debt and therefore, the respondent is liable for punishment under Section 138 of the Act. 15. Hence, the order of acquittal dated 6.9.2005 passed by the trial Court in CC No.66 of 2005 is set aside and the respondent-accused is found guilty and convicted and sentenced to pay compensation of Rs.1,30,000/-, out of which the complainant is entitled to Rs.1,20,000/- and balance amount of Rs.10,000/- shall be remitted to the State. The said amount shall be deposited within a period of three months from the date of receipt of copy of this order. In default, the accused has to undergo simple imprisonment for a period of 3 months. The appeal is accordingly allowed.