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Karnataka High Court · body

2015 DIGILAW 430 (KAR)

S. K. Chand Basha v. A. P. Vijayalakshmi

2015-04-15

A.S.PACHHAPURE

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Judgment : 1. The petitioner has challenged his conviction and sentence for the offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as ‘NI Act’ for short) on a trial held by the Metropolitan Magistrate, Bangalore, confirmed in an appeal by the Sessions Court. 2. The facts reveal that the petitioner had to pay a sum of Rs.3,00,000/- to the respondent towards the sale consideration for having purchased the immovable property on 10.09.2007 and the cheque dated 15.12.2007 was issued to the respondent towards the payment and when it was presented for encashment, it returned with an endorsement “insufficient funds”. Thereafter, the respondent issued notice. Thought there was reply, the demand was not complied and therefore, the respondent approached the Trial Court with a complaint against the petitioner for the offence under Section 138 of the NI Act. In the trial, the complainant was examined as PW1 and in her evidence, Exs.P1 to P11 were marked. The statement of petitioner was recorded under Section 313 Cr.P.C. He was examined as DW1 and in his evidence, Exs. D1 to D3 were marked. The Trial Court heard the counsel and on appreciation of the evidence on record, convicted the petitioner for the offence under Section 138 of the NI Act and ordered him to pay a fine of Rs.3,40,000/- in default to undergo imprisonment for one year. The order was challenged in an appeal and the Appellate Court dismissed the appeal confirming the conviction and sentence. Aggrieved by the concurrent findings of the Courts below, the present revision petition is filed. 3. Heard the learned Counsel for petitioner. Learned Counsel for the respondent though served is absent. 4. The point that arises for my consideration is: “Whether the petitioner has made out any grounds to warrant interference in his conviction and sentence ordered by the Trial Court and confirmed in an appeal for the offence under Section 138 of NI Act?” 5. Learned Counsel for the petitioner submits that there was no liability to make the payment of Rs. 3,00,000/- to the respondent as there was an understanding between the parties that the payment was to be made only after the disposal of suit in OS No.26941/2007. Learned Counsel for the petitioner submits that there was no liability to make the payment of Rs. 3,00,000/- to the respondent as there was an understanding between the parties that the payment was to be made only after the disposal of suit in OS No.26941/2007. He submits that thought the cheque was issued towards payment of Rs.3,00,000/- towards sale consideration under the deed dated 10.09.2007, the respondent had agreed that the amount is payable only after disposal of the suit and having given such an assurance, misused the cheque issued and presented the same. He submits that there is no criminal intent on the part of petitioner and in the absence of such an intent or mensrea, the conviction cannot be granted for the offence under Section 138 of NI Act. On these grounds, he has sought for setting aside the conviction and sentence ordered. 6. Perusal of the material placed on record reveals that there is no dispute by the petitioner having issued the cheque for Rs. 3,00,000/- dated 15.12.2007. The cheque has been produced at Ex.P2. The endorsement is produced at Ex.P3 and it reveals that the cheque was returned for insufficient funds in the account. The respondent had issued the notice at Ex.P4 and the reply to this notice has been produced at Ex.P8. The sale deed dated 10.09.2007 has been produced by the respondent at Ex.P11. Under this sale deed, the petitioner had to pay a total sum of Rs.16,00,000/- to the respondent for purchase of property mentioned in the sale deed Ex.P11. Rs.10.00.000/- was given to the respondent by a order dated 29.08.2007. The sum of Rs.1,00,000/- was given in cash and two cheques were issued by the petitioner, one for a sum of Rs. 2,00,000/- dated 30.09.2007 and it admitted by the respondent that the petitioner paid the cash of Rs.2,00,000/- and the cheque for the said sum was taken back. 7. The cheque in dispute was dated 15.12.2007 for a sum of Rs.3,00,000/- and this was issued by the petitioner under the sale deed Ex.P11. The petitioner also agreed that in case if the cheque issued by him is dishonored, he would be liable to the prosecution at the instance of respondent. So it is in pursuance of this sale deed, the cheque was issued and it was presented on 17.12.2007 and it returned with an endorsement of insufficient funds. 8. The petitioner also agreed that in case if the cheque issued by him is dishonored, he would be liable to the prosecution at the instance of respondent. So it is in pursuance of this sale deed, the cheque was issued and it was presented on 17.12.2007 and it returned with an endorsement of insufficient funds. 8. But anyhow, there are subsequent events that have occurred between the parties and they reveal that the suit in OS No. 26941/2007 was filed by the Bavasara Kshatriya Samaja, wherein the respondent and the petitioner were the parties to the said suit. The suit pertains to the property which was purchased by the petitioner under the sale deed (Ex.P11). The complaint was filed on 07.11.2007. This suit came to be instituted seeking declaration of the title of Bhavasara Kshatriya Samaja and to restrain the petitioner from causing obstruction to their possession on the basis of sale deed at Ex.P11. It is the contention of petitioner that after the suit came to be instituted, there was an oral agreement between the parties for the payment of Rs.3,00,000/- and it was to be paid to the respondent only after the suit is disposed of. 9. On this aspect of the matter, learned Counsel for the petitioner brought to the notice of this Court an admission made by PW1 in the cross examination, wherein she has clearly admitted that she agreed to receive the sum of Rs.3,00,000/- from the petitioner after the decision in the suit instituted by Bhavasara Kshatriya Samaja. She also admits having assured to receive the money after disposal of the suit. This admission of the respondent is found in the cross examination at page No.4. Therefore, now it is necessary to consider as to whether with this assurance of the respondent, if the respondent had presented the cheque for encashment, the offence under Section 138 of the NI Act would be attracted or not. 10. Not, as regards the offence under Section 138 of the NI Act is concerned, it is necessary for the complaint to establish, that the accused had an intention to commit the offence and issued the cheque and that the said cheque was presented for encashment and the same returned with an endorsement ‘insufficient funds’. Issuance of a notice of demand is a condition precedent for completion of an offence. Issuance of a notice of demand is a condition precedent for completion of an offence. If the demand is complied, then there is no offence under Section 138 of NI Act. 11. Admittedly, the suit in OS No.26941/2007 was instituted on 07.11.2007. It is only after the institution of this suit, there was an oral agreement between the petitioner for payment of the cheque amount under Ex.P2 to the compliant after the disposal of suit in OS No.26941/2007. There is an admission of the aforesaid agreement in the cross examination of PW1. So, if the amount of cheque is payable after the disposal of suit and when the said suit was pending on the date when the demand was made by the compliant, I do not think any mensrea with the petitioner to commit the offence under Section 138 of the NI Act. It appears that the compliant having admitted that the amount would be payable only after the disposal of suit went beyond the admission and presented the cheque for encashment. 12. The petitioner has replied the notice putting forth his defence that there was such an admission. That apart, PW1 admits the same in the cross-examination that there was such an understanding. Therefore, there is no mensrea to commit the offence under Section 138 of NI Act and in the absence of which, it cannot be said that the appellant has committed the offence under Section 138 of the NI Act. This aspect of the matter has not been looked into by the Trial Court and also by the First Appellate Court. 13. It is not the matter of civil liability which has to be considered under the provisions of this Act and at the most in case, if the respondent is entitled to the sum mentioned in the cheque, she is at liberty to get the relief in the civil Court and the question of paying the compensation does not arise for consideration in criminal proceedings in the absence of mensrea. Therefore, I am of the opinion that the Courts below committed an error in convicting the petitioner for the offence punishable under Section 138 of the NI Act. Hence, the conviction and sentence ordered by the Trial Court and confirmed in the appeal will have to be set aside. 14. Consequently, the revision petition is allowed. The order impugned in this revision petitioner is set aside. Hence, the conviction and sentence ordered by the Trial Court and confirmed in the appeal will have to be set aside. 14. Consequently, the revision petition is allowed. The order impugned in this revision petitioner is set aside. The petitioner is acquitted of the charge under Section 138 of the NI Act. The fine, if any deposited by the petitioner, shall be refunded to him.