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Karnataka High Court · body

2018 DIGILAW 216 (KAR)

R. Nagabushana v. R. Nanjundappa

2018-02-15

BUDIHAL R.B.

body2018
JUDGMENT : 1. This appeal is preferred by the appellant-complainant being aggrieved by the judgment and order of acquittal dated 13.9.2010 passed by the Additional Civil Judge (Jr. Dn.) and JMFC, Mulbagal, in C.C No.417/2005. The appellant-complainant has preferred the above appeal challenging the legality and correctness of the judgment and order of acquittal passed by the Court below on the grounds as mentioned in the appeal memorandum. 2. Brief facts of the case of appellant-complainant is that the accused is the friend of complainant. Since the respondent-accused was in need of the amount for his immediate needs for purchase of land, as such, he approached the complainant to pay him a sum of Rs.50,000/- on 18.12.1999. Accordingly, the accused received Rs.50,000/- from the complainant and agreed to repay the same with interest at 12% p.a. and also return the same whenever the complainant demands and expressing his ability to arrange for the funds, issued a cheque bearing No.0854468 dated 23.03.2000 for sum of Rs.50,000/- in Kolar Gramina Bank, Mulbagal branch. In spite of assurance of the accused to repay the amount, he has not repaid either the principal amount or the interest amount. In spite of repeated demands and oral requests by the complainant and since the accused has not repaid the amount as agreed by him, the complainant presented the cheque for collection through SBM, Mulbagal branch on 04.09.2000. The said cheque returned because of “Insufficient of funds’ since the accused has not arranged the funds. The complainant had no other alternative and he got issued a legal notice dated 13.09.2000 through his advocate to the accused by means of RPAD. The said legal notice was duly served on the accused, but he did not repay or reply to the terms of notice and thus, the accused committed the offence punishable under Section 138 of Negotiable Instruments Act (for short ‘the N.I. Act’). 3. The Court below recorded the evidence on both sides. On the side of the appellant-complainant, the complainant has been examined as P.W.1 and he has produced four documents Exs.P.1 to P.4. On the side of the respondent-accused, the accused has been examined as D.W.1 and he also examined three independent witnesses as D.Ws.2 to 4 and got marked Exs.D.1 to D.3. On the side of the appellant-complainant, the complainant has been examined as P.W.1 and he has produced four documents Exs.P.1 to P.4. On the side of the respondent-accused, the accused has been examined as D.W.1 and he also examined three independent witnesses as D.Ws.2 to 4 and got marked Exs.D.1 to D.3. After hearing learned Counsel on both sides, ultimately, the trial Court acquitted the respondent-accused holding that the appellant-complainant has not proved his case that the respondent accused has committed the offence under Section 138 of the N.I. Act. Therefore, the appellant-complainant is before this Court in this appeal. 4. I have heard the learned Counsel appearing for the appellant-complainant and the learned Counsel appearing for the respondent-accused. 5. Learned Counsel appearing for the appellant-complainant made submission that the trial Court has not correctly appreciated the oral and documentary evidence produced by the complainant before it. Though no material had been placed by the respondent-accused that he had repaid the amount of Rs.1.00 lakh, which was agreed to be paid in respect of purchase of two strips of land, even then, it was held by the Court below that issuance of the cheques by the respondent-accused was in connection with the transaction of sale of the landed property. Hence, the learned Counsel submitted that no documents are produced by the respondent-accused with regard to the payment of Rs.1.00 lakh to the appellant-complainant as contended by him. Without there being any documentary evidence for the proof of payment of Rs.1.00 lakh by the respondent accused to the appellant-complainant, it was wrongly held by the Court below that the amount had been already repaid and in spite of that the complainant has not returned the cheque and he has returned one cheque and retained another cheque so also the agreement which was said to have been entered into between the parties. Hence, the learned Counsel submitted that though there was such a transaction which is said to have been entered into between the complainant and the accused for the purchase of two strips of land but that transaction is altogether different and the respondent-accused person had made the payment in connection with purchase of those strips of lands. Even in the sale deed, it is mentioned that amount is already paid. This transaction is an independent transaction of borrowing loan of Rs.50,000/- from the appellant-complainant by the respondent-accused. Even in the sale deed, it is mentioned that amount is already paid. This transaction is an independent transaction of borrowing loan of Rs.50,000/- from the appellant-complainant by the respondent-accused. This was wrongly appreciated by the Court below. Hence, the learned Counsel submitted that there is illegality in the judgment and order of acquittal passed by the Court below and accordingly, he submitted to allow the appeal and to set aside the judgment and order of acquittal of the respondent-accused. 6. Per contra, learned Counsel for the respondent-accused made submission that there was transaction between the appellant-complainant and respondent-accused in respect of purchase of the landed property in two strips, each for the amount of Rs.70,000/- totally amounting to Rs.1,40,000/-. Out of the total amount of Rs.1,40,000/-, firstly, the sum of Rs.40,000/- in cash was paid by the accused to the complainant and regarding the remaining amount of Rs.1.00 lakh was retained by the complainant way of security. For the payment of Rs.1.00 lakh, the complainant received two cheques each for Rs.50,000/- with condition that on payment of amount of Rs.1.00 lakh by the accused to the complainant, the complainant shall return the cheques to the accused. The further contention of the learned Counsel for the respondent is that even though the accused made cash payment of Rs.1.00 lakh to the complainant in the presence of the witnesses, the complainant returned only one cheque bearing No.0854469 but he did not return another bearing cheque No.0854468 and agreement was also not returned to the accused. Taking undue advantage of the said cheque, which was retained by the complainant, he filed a false complaint against the accused. Looking to the evidence of the accused (D.W.1) so also D.Ws.2 to 4, they have clearly deposed in their evidence that in their presence, the accused made the payment of cash of Rs.1.00 lakh to the complainant. Hence, it is his submission that when that is so, the cheque which was given as security for the payment of remaining consideration of Rs.1.00 lakh, the complainant has wrongly withheld one of the cheques and the agreement in respect of the payment of entire amount and filed a false case. Hence, it is his submission that when that is so, the cheque which was given as security for the payment of remaining consideration of Rs.1.00 lakh, the complainant has wrongly withheld one of the cheques and the agreement in respect of the payment of entire amount and filed a false case. The learned Counsel submitted that this aspect has been properly appreciated by the Court below and the Court below has rightly held that the complainant has failed to prove his case beyond all reasonable doubt and it has also rightly held that the cheques issued by the accused is in connection with the purchase of two strips of landed property. Hence, he submitted that no illegality has been committed by the Court below in passing the impugned order and accordingly, submitted to reject the appeal. In support of his contention, the learned Counsel for respondent-accused has relied upon the decision in case of VENKATESH BHAT A VS. ROHIDAS SHENOY reported in AIR 2010 NOC 301 (KAR). 7. I have perused the grounds urged in the appeal memo, judgment and Order of acquittal passed by the Court below, oral evidence of PW-1, DWs-1 to 4, documents at Ex.P-1 to P-4 and D-1 to D-3. The issuance of the Cheque and signature on the Cheque produced by the appellant is not in dispute because even according to the respondent/accused, it is an admitted case that the said Cheque was issued and given to the complainant as a security in connection with the agreement of sale transaction on the condition that after payment of the amount, the Cheques will have to be returned to the respondent/accused persons. When the signature on the instrument and the issuance of the Cheques is admitted by the respondent/accused, then presumption under Section 139 of the Negotiable Instrument Act will comes into play. Section 139 of N.I. Act reads as under; “139. Presumption in favour of holder.—It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability. 8. Therefore, it is for the respondent/accused to rebut the presumption raised under Section 139 of the N.I. Act. 8. Therefore, it is for the respondent/accused to rebut the presumption raised under Section 139 of the N.I. Act. The defence of the accused during the course of the trial that, though the amount of Rs.1 Lakh has been already paid to the complainant by the accused in the presence of Panch witnesses, but the accused returned only one Cheque and he told that the another Cheque (which is the subject matter of this case) and the agreement were not traceable. He will return those two little later. It is also the allegation and the defence of the accused that the complainant did not return the agreement so also the Cheque and taking undue advantage of the said Cheque, he filed the present complaint. 9. Perusing the judgment and order of acquittal passed by the Court below. The learned JMFC Court comes to the conclusion that the respondent/accused placed the material to show that the amount of Rs.1 Lakh was paid to the complainant in the presence of witnesses i.e., DWs.2 to 4. But even then the complainant not returned the Cheque, it is also observed by the Court below that this issuance of the Cheque is in connection with the sale transaction of a landed property. Therefore, JMFC Court disbelieved the case of the complainant and ultimately acquitted the respondent/accused. In this connection, I have perused the oral evidence of DW-1, the accused persons and also the other witnesses DWs.2 to 4. 10. Looking to the evidence of DW-1, respondent/accused during the course of cross examination, it was suggested that in order to purchase another landed property, the accused borrowed an amount of Rs.50,000/- from the complainant. No doubt the said suggestion has been denied by the witnesses. He deposed that for the purpose of purchase of the landed property, he issued two Cheques under Ex.P-1 and Ex.D-1 to the complainant to show that those Cheques Ex.P-1 and Ex.D-1 were given to the complainant in connection with the sale of a landed property, there was an agreement entered into and reduced into writing. Therefore, he further deposed that he had produced that agreement before the Court. When it was suggested, when he has not produced the said agreement before the Court, even he gone to the extent of denying the said suggestion. But perusing the materials produced before the court, no such agreement was produced by the respondent/accused. Therefore, he further deposed that he had produced that agreement before the Court. When it was suggested, when he has not produced the said agreement before the Court, even he gone to the extent of denying the said suggestion. But perusing the materials produced before the court, no such agreement was produced by the respondent/accused. When it was suggested that in connection with purchase of another landed property, he borrowed amount from the complainant. In that connection, he had issued a Cheque. DW-1 denied the said suggestion. Therefore, looking to the payment of Rs.1 Lakh to the complainant by the accused person in the evidence of DW-1, no material has been produced. 11. Coming to the evidence of DW-2. He deposed on 20.08.2000, the accused paid Rs.1 Lakh to the complainant, but for the payment of the said amount, no document was obtained from the complainant. This evidence of DW-2 goes to show that regarding the payment of Rs.1 Lakh by cash by the accused to the complainant, there is no document executed. 12. Coming to the evidence of DW-3, another witness, he also deposed that the complainant sold the landed property to the accused for an amount of Rs.1 Lakh and at that time, accused gave two Cheques to the complainant and at the same time, the agreement was entered into between them and according to that agreement, within three months, the said amount will have to be paid by the accused to the complainant and in case, such payment is made, the complainant has to return those two Cheques to the accused persons. 13. Witness deposed that his father put the signature to the said agreement. He further deposed that he does not know whether the said agreement is produced before the court or not. Therefore, his evidence also goes to show that no such agreement is produced before the Court to show that there was a condition in between the complainant and the accused that after payment of Rs.1 Lakh, by the accused to the complainant to return those two Cheques to the accused. Last sentence in the cross-examination of this DW-3 is very important which clinches the issue. Last sentence in the cross-examination of this DW-3 is very important which clinches the issue. When it was suggested that the Cheques which were produced before the Court are issued in connection with the purchase of landed property for which the amount was borrowed by the accused from the complainant, the said suggestion was admitted as true. So this answer given by DW-3 in the cross-examination clearly goes to show that the accused borrowed the amount from the complainant and in connection with the said borrowed amount, he issued the Cheques in favour of the complainant. This important evidence on the side of the complainant through the mouth of this DW-3 is not at all correctly appreciated by the JMFC Court. The JMFC Court has wrongly held that there is a payment of Rs.1 Lakh by the accused to the complainant and the Cheques were in connection with the sale transaction of a landed property. Therefore, it is wrongly held that there cannot be an offence under Section 138 of N.I. Act. 14. I have also perused the copies of the sale deeds produced as per Ex.D-2 and D-3. Looking to the certified copies of these documents, they goes to show that the sale transaction is on the payment of the cash. This also goes to falsify the contention and defence of the respondent/accused. Therefore, looking to the entire materials both oral and documentary, I am of the clear opinion that firstly the respondent/accused failed to rebut the presumption raised under Section 139 of N.I. Act and apart from that, even loking to the oral evidence of DW-3, they have failed to make out defence that two Cheques were issued by the accused to the complainant on the condition that they are given as a security for the payment of remaining amount of Rs.1 Lakh and after payment of Rs.1 Lakh, the Cheques are to be returned from the complainant to the accused person. 15. Looking to these materials, the judgment and order of acquittal passed by the learned JMFC Court is totally illegal and it is not sustainable in law. 16. I have also perused the decision of the Apex Court produced the learned Counsel for the respondent/ accused. The factual matrix of the case in the decision as well as the factual aspects involved in the case on hand, they are one not exactly and the same. 16. I have also perused the decision of the Apex Court produced the learned Counsel for the respondent/ accused. The factual matrix of the case in the decision as well as the factual aspects involved in the case on hand, they are one not exactly and the same. Therefore, the said decision will not come to the aid and assistance of the respondent/accused. 17. The judgment and order of acquittal is not in accordance with the material placed on record. Hence, the appeal is allowed. Judgment and Order of acquittal passed by the Court below is hereby set aside. The respondent/accused is convicted for the offence punishable under Section 138 of Negotiable Instrument Act and the penalty of Rs.55,000/- is imposed on the respondent/accused. Out of the fine amount, an amount of Rs.50,000/- is to be paid to the complainant and the remaining amount of Rs.5,000/- shall have to be remitted to the State.