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Karnataka High Court · body

2019 DIGILAW 756 (KAR)

Kumar v. Satish S Patil

2019-03-28

H.P.SANDESH

body2019
JUDGMENT : H P SANDESH, J. 1. This appeal is filed under Section 378(4) of Cr.P.C. challenging the judgment of acquittal dated 03.07.2010 passed in C.C.No.635/2008 on the file of the Principle Civil Judge & Prl. JMFC., Dharwad and prayed this Court to convict the respondent for the offence punishable under Section 138 of Negotiable Instruments Act. 2. The ranking of the parties is referred as per their ranking before the trial Court. 3. The brief facts of the case is that, the appellant/complainant has obtained the hand loan of Rs.6,50,000/- from the complainant and he has issued two cheques for a sum of Rs.3,00,000/- and another sum of Rs.3,50,000/- in which one was honored and other cheque which was presented for encashment was returned with an endorsement "not arranged for" and he has issued legal notice. The accused also given reply to the legal notice denying the liability and hence he has filed the complaint. The Court below has taken cognizance and the complainant has adduced his evidence by examining himself as PW.1 and also examined two witnesses as PWs.2 and 3. The complainant relied upon the documents Exs.P1 to P7. The accused did not chose to lead any evidence however confronts the document of Ex.D1 in the crossexamination of PW.1. The Court below considering both oral and documentary evidence has acquitted the accused. Hence, the present appeal is filed. 4. The main contention of the complainant in this appeal is that the Court below failed to appreciate the evidence available on record in a perspective manner and erroneously comes to the conclusion that there was no legally recoverable debt rather it was an investment and therefore the offence under Section 138 of N.I.Act is not attracted. It has to be noted that whether an investment made on behalf of another person becomes a legally recoverable debt, when a person invests or lends money to invest to another person, that another person is a legal obligation, liability to repay it back, when such being the case, in the instant case, the same principle is applied and the respondent is liable to repay the same. The Court below failed to take note of the fact that issuance of cheque dishonored, demand notice is issued and the accused had issued untenable reply and the very reasoning given by the Court below is contrary to law and evidence on record. The Court below failed to take note of the fact that issuance of cheque dishonored, demand notice is issued and the accused had issued untenable reply and the very reasoning given by the Court below is contrary to law and evidence on record. The judgment of the lower Court is illegal harsh and one sided and liable to set aside. 5. The counsel for the appellant/complainant in his arguments vehemently contend that the accused is businessmen and contractor is not disputed fact. The accused also not disputed the fact that the first cheque which was realized to the tune of Rs.3,00,000/- and the other cheque which is the subject matter was returned with an endorsement not arranged for. The Court below while appreciating the evidence came to the conclusion that the complainant has stated that it is a hand loan and also an investment and also the same was given for the service rendered and failed to take note of the fact that first cheque was realized and further failed to take note of the fact that signature is not denied. The evidence of the complainant is also not rebutted by entering into the witness box. The Court below also failed to take note of the fact that the complainant was acquitted in the complaint given by the accused. The Court below even though the accused did not probabalize his defence, failed to appreciate both oral and documentary evidence and doubted the complainant and the same is erroneous and it was proceeded in one way and did not consider the case of the complainant and the reasons assigned by the Court below is perverse and opposed to the evidence available on record. 6. Per contra, learned counsel for the accused in his arguments he would submits that in both the cases the complainant and accused are friends since two cases are filed against this accused. The main contention of the accused is that the cheque was stolen and intimated the same to the bank and got closed the account. 6. Per contra, learned counsel for the accused in his arguments he would submits that in both the cases the complainant and accused are friends since two cases are filed against this accused. The main contention of the accused is that the cheque was stolen and intimated the same to the bank and got closed the account. The complainant himself examined the Manager as PW.3 and he stated the reason for issuing of not arranged for, though the account was closed, the admission elicited from the mouth of PW.1 is taken note by the Court below and further the Court below while discussing the material on record, discussed in detail and given the reasons why the Court below comes to such conclusion. The other contention of the counsel is that the amount is not a small amount and he has not disclosed the same in the Income Tax returns and the same is admitted in the cross-examination. The Court below has taken note of the admission and considered the material elaborately and hence comes to the conclusion that the defence is probabalized. The other contention that the accused did not lead any evidence cannot be a ground to comes to such conclusion and when evidence of PW.1, itself is not trustworthy, question of leading rebuttal evidence also does not arise and the same is also not warranted. Hence, no occasion arose to the accused to discharge his burden and hence prayed this Court to dismiss the appeal. 7. In reply to the arguments of the accused, counsel for the complainant in his arguments, he contends that when the cheque contains the signature of the accused is not disputed, the burden lies on him to explain how the cheque had gone to his custody and mere taking the defence that cheque is stolen is not a ground and the complaint is given is also after the receipt of the notice and the same is afterthought. The Court below erroneously comes to the conclusion that he gave the complaint and also taken specific defence in the reply notice. Hence, the very appreciation of evidence is one sided. The Court below erroneously comes to the conclusion that he gave the complaint and also taken specific defence in the reply notice. Hence, the very appreciation of evidence is one sided. In support of his contention, he also relied upon the judgment of Rangappa Vs Mohan, 2010 5 LAWS(SC) 19, relying upon this judgment the counsel contends that the Apex Court in the said judgment has categorically held that accused has to raise a probable defence and also discussed with regard to the endorsement issued by the bank and may be some slight discrepancy in the complaint version and the same cannot be a ground to disbelieve the case of the complainant. When the accused did admit the signature on the cheque was his, statutory presumption comes into play and the same has not been rebutted and in the instant case on hand also the statutory presumption comes into aid of the complainant and the same has not been rebutted and the Court below has committed an error in acquitting the accused. 8. Having heard the arguments of the counsel for complainant and also the counsel for accused the point that arises for my consideration; (a) Whether the Court below has committed an error in acquitting the accused for the offence under Section 138 of N.I.Act? 9. Before appreciating the oral and documentary evidence, I would like to mention in nutshell the contents of the complaint and also the defence. On perusal of the complaint, the complainant in the complaint has stated that both the complainant and accused were known to each other and this accused has availed the services of the complainant. At the time of availing the services of the complainant the accused requested the complainant to invest the amount in the said work to the tune of Rs.10,00,000/- for which the complainant has expressed difficulty to invest that much but agreed to help him some amount and the accused also has agreed to return the same within the short period i.e. after getting the contract amount which shall be part with the service charge of the complainant in the said contract business. Accordingly, by adjusting the amount with all his resources, he has paid the amount of Rs.6,50,000/- as hand loan. Accordingly, by adjusting the amount with all his resources, he has paid the amount of Rs.6,50,000/- as hand loan. After the completion of the work which has started in the year 2006 and that in the year 2008 accused had issued two cheques for realizing the debt in question for an amount of Rs.3,00,000/- and another cheque for a sum of Rs.3,50,000/- and the first cheque was honored and second cheque was dishonored for the reason that an endorsement as not arranged for. The defence of the accused both in his reply notice and also before the lower Court that he denied the averment of the complaint and also denied the availment of loan of Rs.6,50,000/-. Further, he contends that the complainant was doing a partnership business and he has suffered heavy loss in the business and hence the complainant himself approached the accused and sought for help, considering the financial conditions, sympathetically on humanitarian grounds, the accused asked complainant to join him to work under him, paid some sumptuous amount and allowed to stay with him in his room and looked after his daily expenses and absolutely there was no contract or agreement either oral or written between them. It is contended that while serving under the accused, the complainant was residing along with the accused and when the half of the work was completed, the accused has introduced one person by name Kiran Heblikar of Dharwad, to the complainant and the said Kiran Heblikar is also interested to gain the knowledge and expertise in the industry works and he also stayed with them and both of them were managing the work at site. During the said work the accused use to keep blank signed cheque leaves and the accused found missing blank signed cheque leaves and his ATM card and when the same was brought to the notice of this complainant and his friend Kiran Heblikar, they have expressed their ignorance and only came to know about the cheque was stolen by this complainant and another, when he has received the notice. The other contention that when the complainant learnt that the accused had received huge payment from KFIL, the complainant approached him and taken the amount of Rs.3,00,000/- in the third week of March 2008 from the accused and the complainant assured him to repay the same since his wife who is working in Karnataka University Dharwad, has applied for loan and hence, the said payment was made and not towards the liability. 10. Having taken note of the pleading available before the Court and also the defence taken by the accused, this Court has to appreciate the oral and documentary evidence, the complainant in order to substantiate his contention he has been examined himself and got marked the documents Exs.P1 to P6 i.e. cheque, bank endorsement, legal notice, postal receipt, postal acknowledgement and reply notice. The complainant who has been examined as PW.1 was subjected to cross-examination and in the cross-examination certain answers are elicited; regarding he has not produced the diploma certificate and also he has not produced any partnership document. After eliciting answers in respect of Ex.P3, notice that it is mentioned that he himself, accused and his friend Kiran Heblikar are all partners but he is not having any documents to show the same and no documents in respect of the partnership and also he did not mention what technical expert was sought by the accused from him. He further admits that he has not given the amount at a time and he gave the amount in five installments within a period of one and half month. He also admits that he has not given the amount as hand loan and he volunteers that he invested the money for partnership business and the same has not been mentioned in the legal notice that he invested the money and he has not produced any documents for having the money of Rs.6,50,000/- and he also did not disclose the same in his Income Tax returns. It is also elicited that M/s. Amminbhavi and Hegde Engineers have prepared the design and plan and accused took the work of the said M/s. Amminbhavi and Hegde Engineers, were supervising the work. 11. It is also elicited that M/s. Amminbhavi and Hegde Engineers have prepared the design and plan and accused took the work of the said M/s. Amminbhavi and Hegde Engineers, were supervising the work. 11. Pw.1 also admitted the registration of the case against him and his friend by the accused and suggestion was made that Ex.P1 was stolen and based on that, notice was given to the accused and only after receipt of notice, he came to know that the cheque was stolen and the said suggestion was denied. It is suggested that when he comes to know that accused has received the amount, he approached the accused and received an amount of Rs.3,00,000/- saying that he will repay the amount after his wife obtain the loan from the bank and the same is also denied. It is suggested that an intimation was given to the bank on 14.08.2017, when he lost the cheque and the same is aware of him and the same was denied. The discrepancy is elicited with regard to receipt of amount of Rs.3,00,000/- and he says both the cheques were not given at a time and the cheque was given after one week. He admits that in the affidavit, it is mentioned that the cheque was given for Rs.3,50,000/- for repayment of the invested money and the averment that it was towards hand loan is not true and the investment is correct. It is suggested that he gave the statement before the police that there was an understanding among them to share the profit after the completion of the work and the accused is liable to pay the said amount and he categorically says that the amount of Rs.6,50,000/- was in respect of the investment what he had made and not the profit of the contract and claims that the statement recorded by the police i.e. towards profit of contract is not correct and document is marked as Ex.D1. A suggestion was made that he is not diploma holder and the same was denied. A suggestion was made that he is not diploma holder and the same was denied. The complainant also examined one witness as PW.2 and he gave the evidence in support of the claim of the complainant he was also subjected to cross-examination and in the cross-examination he says that the complainant has paid the amount for investment and complainant also rendered his technical service to the accused and he claims that all of them were agreed to do the work jointly in the year 2006 and the complainant has invested the money and he can't tell on what dates he invested the money. The complainant also examined the bank Manager and he claims that account was closed but by mistake an endorsement was issued as not arranged for. He was subjected to crossexamination, he admits that in the letter he did not mention that the cheque was lost but only below the said letter it is mentioned that cheque was lost and after the said noting the bank put the seal and obtained the said letter. He admits that the other complainant Kiran Heblikar and the work of this complainant is in respect of the very same work. Now let me see the evidence available on record, both oral and documentary evidence and complainant in support of his contention he examined himself as PW.1 and also examined two witnesses and accused did not choose to lead any evidence before the Court. 12. The main defence of the accused is that the cheque was lost and he gave the complaint and in order to prove the fact that he had lodged the complaint, it is elicited in the cross-examination at page No.5 and also PW.1 categorically says that the said complaint was given after filing of the case. On perusal of the complaint, which is available on record, it discloses that this complaint was filed on 02.09.2008 and on perusal of the order sheet of the complaint, which is dated 16.10.2008 filed against this complainant and also against the complainant in other case. The fact that the said complaint is filed in the month of October 2008 is not in dispute and hence it is clear that after the receipt of the notice and also filing of complaint in the month of September, the accused has filed the complaint in the month of October. The fact that the said complaint is filed in the month of October 2008 is not in dispute and hence it is clear that after the receipt of the notice and also filing of complaint in the month of September, the accused has filed the complaint in the month of October. On perusal of the records, the Court below has given much importance to the said complaint and the same ought not to have given much importance to the said complaint. The fact that the complainant is acquitted in the said case is also not in dispute and the same has not been denied. It is further important to note that the accused also did not dispute the payment of Rs.3,00,000/- in favour of the complainant however he claims that the complainant was under financial constraints and hence he has approached him and hence he paid the amount and the complainant agreed to repay the amount after availing the loan by the wife of complainant. Hence, he made the payment. 13. On the other hand, it is the contention of the complainant that towards the liability he made the payment of issuing two cheques. Out of the two cheques one cheque has been honored and he made the payment of Rs.3,00,000/- and failed to arrange the amount for a sum of Rs.3,50,000/- in respect of the second cheque. 14. It has to be noted that the main contention of the accused that the complainant was under financial constraints and he has approached him and he paid the amount. It is the contention of the accused that this petitioner and the complainant in other complaint have stolen the cheque and when it has came to his notice that the said cheque stolen, why the accused did not take any steps for recovery of the amount of Rs.3,00,000/- which has been advanced to complainant. If really the said payment is made in order to help the complainant, when he was under financial constraints and the same has not been done. Hence, it is clear that the very defence taken by the accused is nothing but a false defence was taken in the case. The Court below has failed to take note of all these aspects while considering the case of complainant. Hence, it is clear that the very defence taken by the accused is nothing but a false defence was taken in the case. The Court below has failed to take note of all these aspects while considering the case of complainant. Apart from that, it has to be noted that he filed the complaint against this complainant and also against other complainant that both of them have stolen the cheque and when he gone to the extent of filing the complaint against this complainant and other complainant what prevented him taking the steps for recovery of the amount of Rs.3,00,000/- which he has advanced the loan amount of Rs.3,00,000/- to this complainant and there is no explanation on the part of the accused in this regard. The Court below not discussed about the payment of Rs.3,00,000/- as contended by the accused whether the payment towards liability or towards as loan. 15. The main contention of the complainant in the complaint at paragraph Nos.3 and 4 that the accused has availed the service of this complainant and also it is specifically pleaded that at the time of availing the service of the complainant he has requested the complainant to invest the amount in the said work to the tune of Rs.10,00,000/- by which it is agreed by the accused to return the same within a short period i.e. after getting the contract amount which shall be given to him with the service charge of the complainant and accordingly by adjusting the amount he paid the amount of Rs.6,50,000/- as hand loan. No doubt, in the cross-examination it is elicited that the said amount has not been paid in one installment and he gave the amount in different installment and the Court below has given much importance to the said admission and the complainant also specifically stated that after adjusting the amount with all his sources he made the payment. No doubt, in the cross-examination it is elicited that the said amount has not been paid in one installment and he gave the amount in different installment and the Court below has given much importance to the said admission and the complainant also specifically stated that after adjusting the amount with all his sources he made the payment. Hence, it is clear that the complainant not only pleaded with regard to the service which he rendered to the accused which is not in dispute and also it is the case that he invested the money with the accused when he started the work of contract and when the complainant specifically pleaded in paragraph Nos.3 and 4 in this regard, the Court ought not to have given much importance to the admission with regard to the payment of amount and also the service rendered him in coming to the conclusion that the contrary versions are given by the complainant and the evidence of the complainant is in consonance with his pleadings both in respect of the service rendered by him and also investing the amount at the request of the accused and the Court below proceeded in one side considering the defence of the accused. 16. The other contention of the accused that when he came to know about the cheques were stolen he intimated to the bank and got it closed the account again it is suspicion that the cheque was returned with an endorsement that the amount was not arranged for. No doubt, PW.3 the Manager who has been examined before the Court, he says by mistake the same was mentioned and if really the same was intimated to the bank and the account was closed, the bank would have given an endorsement that the account was closed and while issuing the endorsement the bank has to verify the account and give the endorsement. In the case on hand the endorsement was issued that not arranged for and not closed the account. In the case on hand the endorsement was issued that not arranged for and not closed the account. The accused more relied upon the document of letter of the bank and the counsel also contended that immediately it was intimated to the bank in terms of Ex.P7 and on perusal of Ex.P7 which has been marked through PW.3 and on perusal of Ex.P7, it has to be noted that subject is mentioned as closure of current account and on perusal of the body of the letter nowhere it is mentioned that he lost the cheque and while requesting to close the account, it is only mentioned that here with he submitted blank cheques which are unused and prayed to do the needful and nothing contains in the said letter that he lost the cheque. It has to be noted that after the signature of the accused which is dated 14.08.2007, an insertion has been made in the bottom of the letter as note that kindly issue the bank statement of his account from March 2007 to till date but it has to be noted that in the other line it is mentioned that he has also lost ATM card and some cheque leaves and if he really lost the cheque leaves and ATM card and the same would have been found in the body of the letter itself dated 14.08.2007 and only after addressing the letter to the bank and making the signature, it appears in the bottom of the letter the same is mentioned that he lost the ATM card and some cheque leaves and there is no any such date in respect of the same and the seal which found on the bottom of the letter also does not contains any date. Hence, it is clear that the very document of Ex.P7 is doubtful that an intimation was given on 14.08.2007 itself and if really the said letter was given there would have been seal containing the date 14.08.2007 and the same is not found in the letter and the Court below failed to meticulously examined this document Ex.P7 and if this documents was given on 14.08.2007 itself, the endorsement would have been the account was closed and the same has not been mentioned in the endorsement of the bank which is mentioned in Ex.P2 and in Ex.P2 the endorsement was given that the funds are not arranged for. Hence, the very contention of the accused that the intimation was given on 14.08.2007 itself is doubtful and all these aspects have not been considered by the Court below instead of the Court below accepted the defence of the accused. 17. The other important aspect has to be looked into that notice was given on 28.07.2008 and reply was given on 22.08.2008, almost after one month of the receipt of the notice. Further important to note that the complaint was filed is admittedly in the month of October 2008 after filing of the present complaint which is dated 02.09.2008 and the Court below taking note of the admission that a complaint has been filed against this complainant and other complainant carried away with the defence of the accused. It is further important to note that the accused did not enter into the witness box and led any evidence in order to substantiate his contention. No doubt nothing compulsory to enter into witness box and give evidence and if the evidence, if it is available supports the case of the accused then need not enter into witness box. In the case on hand, except taking the defence that he lost the cheque and also the other defence that he made the payment of Rs.3,00,000/- as loan to this complainant, nothing is placed before the Court to believe the case of accused. In the case on hand, except taking the defence that he lost the cheque and also the other defence that he made the payment of Rs.3,00,000/- as loan to this complainant, nothing is placed before the Court to believe the case of accused. I have already pointed out that no steps have been taken, if really the amount of Rs.3,00,000/- was given to the complainant as loan, an ordinary prudent man who paid the amount of Rs.3,00,000/- as loan will not keep quiet and no doubt such steps have been taken by the accused and instead of the Court below carried away with the defence of the accused without any probable defence and taking into note of certain slight discrepancy in the complainant's version accepted the defence of the accused. In order to accept the defence of the accused there must be a cogent evidence before the Court and mere taking of the defence is not enough unless the probable evidence is placed before the Court, the very coming to the conclusion that the accused has proved his defence cannot be accepted. 18. The counsel appearing for the complainant in his arguments he vehemently contends that the judgment in the case of Rangappa Vs Mohan, 2010 5 LAWS(SC) 19, is aptly applicable to the case on hand on the ground that the signature available in the cheque is not disputed and Section 118 and 139 of the N.I.Act, is clear that the Court has to presume that the cheque was received by the holder for the discharge in whole or in part, of any debt or liability. It is important to note that one cheque which was given is honored and other cheque which is the subject matter has not been honored and the same was dishonored with an endorsement not arranged for. No doubt, the presumption is rebuttable presumption and in the case on hand in order to rebut the presumption the accused did not enter into the witness box and he stated in the defence that cheque was stolen and regarding the part payment is concerned, he contends that he paid that amount as loan for him since he was under financial constraints and in order to substantiate the said contention he has not placed any material before the Court. No doubt, in order to rebut the presumption it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability is not there and in order to rebut that presumption he has to place the cogent evidence under Section 139 of the Act, no doubt, initial presumption which favours the complainant and in the case on hand the signature available on the cheque is not in dispute and there is a reverse onus on the accused also to rebut the same by leading cogent evidence and the same has not been done by the accused. It is settled law also that the accused has to rebut the presumption under Section 139, standard of proof for doing so is that of preponderance of probabilities. Therefore, it is the duty cast upon the accused to raise the probable defence. In order to accept his probable defence, there must be some material before Court and in the case on hand, except taking the different defences he has not placed any material before the Court and the Court below failed to take note of the material on record. On perusal of the record, taking note of some discrepancy in the complaint versions with regard to the service as well as lending of money as investment has been elicited in the cross-examination of PW.1, the Court below carried away with the said admissions. 19. I have already pointed out that in paragraph Nos.3 and 4 the complainant has specifically pleaded both in respect of his service rendered which is not in dispute and also in paragraph No.4, he categorically pleaded that he arranged the amount in favour of the accused as investment for the contract work which had been undertaken by the accused and the accused also not disputed in his defence that he had undertaken the contract work and when such being the circumstances, the accused ought to have rebutted the evidence of the complainant and the same has not been done. The Court below failed to appreciate both oral and documentary evidence and proceeded in one side not considering the case of the complainant and the very appreciation of the evidence is not in perspective manner and failed to invoke Section 138 and 139 of the Act, with regard to the presumption has not been rebutted. The Court below failed to appreciate both oral and documentary evidence and proceeded in one side not considering the case of the complainant and the very appreciation of the evidence is not in perspective manner and failed to invoke Section 138 and 139 of the Act, with regard to the presumption has not been rebutted. Hence, the judgment quoted by the complainant in the case of Rangappa Vs Mohan,2010 5 LAWS(SC) 19, is aptly applicable to the case on hand. Having taken note of the principles laid down by the Apex Court, I am of the opinion that the judgment of the lower Court requires to be interfered and it requires the setting aside the order of the lower Court. 20. In view of the discussions made above, I pass the following; ORDER The appeal is allowed. The impugned judgment and order of the acquittal dated 03.07.2010 passed in C.C.No.635/2008 on the file of the Prl. Civil Judge & Prl. JMFC, Dharwad, is set aside. The accused is directed to pay the cheque amount of Rs.3,50,000/- within six weeks from today, if he fails to pay the amount, the accused shall undergo simple imprisonment for a period of one year.