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2020 DIGILAW 1846 (KAR)

H. P. Shivananda v. Dinesh D Udyavar

2020-09-24

H.B.PRABHAKARA SASTRY

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JUDGMENT H.B.Prabhakara Sastry, J. - The present appellant was the complainant in the Court of the First Class Judicial Magistrate (V Court), Mangalore, Dakshina Kannada (hereinafter for brevity referred to as "Trial Court"), in C.C.No.219/2008, which case was filed against the present respondent arraigning him as accused, under Section 200 of Code of Criminal Procedure, 1973 (hereinafter for brevity referred to as "Cr.P.C."), for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as "N.I.Act"). 2. The summary of the case of the complainant in the Trial Court is that, the respondent/accused had taken a hand loan of a sum of Rs. 11,00,000/- from the complainant. Towards its repayment, the accused had issued a cheque dated 15-10-2007 for a sum of Rs. 10,00,000/- bearing No.131570 drawn on Vijaya Bank, Talapady Branch, Mangalore, favouring the complainant. The said cheque, when presented for realisation, was returned with an endorsement of insufficiency of funds. Thereafter, the complainant got issued a legal notice on 17-10-2007 to the accused through Registered Post Acknowledgement Due (RPAD). The accused did not meet the demand made in the notice. This constrained the complainant to institute a criminal case against the accused for the offence punishable under Section 138 of the N.I. Act. 3. The respondent who was accused in the Trial Court appeared and contested the matter. In order to prove his case, the complainant got himself examined as PW-1 and got marked documents from Exs.P-1 to P-5. The accused, on his behalf, examined one Sri.Praveen Uchil as DW-1 and got himself examined as DW-2 and got marked documents from Exhibits D-1 to D-3. 4. After hearing both side, the Trial Court by its impugned judgment dated 04-12-2010, acquitted the accused for the alleged offence punishable under Section 138 of N.I.Act. Being aggrieved by the said judgment of acquittal, the complainant has preferred this appeal. 5. The respondent/accused is being represented by his learned counsel. 6. The Trial Court records were called for and the same are placed before this Court. 7. Heard the arguments of learned counsel from both side. Perused the materials placed before this Court including the Trial Court records. 8. 5. The respondent/accused is being represented by his learned counsel. 6. The Trial Court records were called for and the same are placed before this Court. 7. Heard the arguments of learned counsel from both side. Perused the materials placed before this Court including the Trial Court records. 8. Learned counsel for the appellant in his argument submitted that the Trial Court committed an error in believing the defence of the accused that, a blank cheque was given to the complainant by the accused, while it ignored that, in practice, no seller of a property would give such kind of a blank cheque to a purchaser, much less as a security. He also submitted that even though the accused has admitted the receipt of a sum of Rs. 11,00,000/- by the complainant, still, the Trial Court erred in observing that the complainant could not establish the existence of a legally enforceable debt. Stating that the conduct of the accused in not filing any criminal case, seeking return of the alleged blank cheque said to have been given to the complainant, would also go to show that the defence of the accused was not tenable, the learned counsel prayed for allowing the appeal. 9. Learned counsel for the respondent/accused in his argument submitted that the accused though has admitted the signature in Ex.D-3, but by itself it cannot be concluded that he has admitted the execution of the said document. He also submitted that the accused has established that, he has returned the entire loan of a sum of Rs. 10,00,000/- in cash. Apart from the same, the accused has also proved the preponderance of probability in his favour. Thus, the judgment of the Trial Court does not warrant any interference at the hands of this Court. 10. After hearing both side, the points that arise for my consideration in this appeal are : (i) Whether the complainant has proved beyond reasonable doubt that the accused has committed an offence punishable under Section 138 of the Negotiable Instrument Act, 1881, as alleged in the complaint? (ii) Whether the judgment under appeal deserves an interference at the hands of this Court? 11. The complainant got himself examined as PW-1, who in his examination-in-chief, in the form of affidavit evidence, has reiterated the contentions taken up by him in his complaint. (ii) Whether the judgment under appeal deserves an interference at the hands of this Court? 11. The complainant got himself examined as PW-1, who in his examination-in-chief, in the form of affidavit evidence, has reiterated the contentions taken up by him in his complaint. In support of his contention, he got produced the dishonoured cheque for a sum of Rs. 10,00,000/- said to have been issued by the accused in his favour at Ex.P-1 and the signature of the accused therein at Ex.P-1(a); the banker's endorsement regarding the return of the cheque at Ex.P-2; copy of the legal notice said to have been issued to the accused on behalf of the complainant at Ex.P-3; postal receipt showing the sending of the said registered notice and the postal acknowledgement to show the service of the said notice upon the accused at Exs.P-4 and P-5 respectively. The accused got examined one Sri.Praveen Uchil as DW-1 and got himself examined as DW-2 and a copy of the reply notice, the complainant's vakalath in the case, the signature of the complainant and the copy of the alleged agreement for sale dated 21-02-2007 were marked at Exs.D-1, D-2, D-2(a) and D-3 respectively. 12. From the evidence of the parties, the undisputed facts remain that, the accused and the complainant were known to each other since prior to the alleged loan transaction. However, the very alleged loan transaction itself is in question. PW-1 who was subjected to a detailed cross-examination from the accused' side, has stood by his statement made in his examination-in-chief. He reiterated that in total, a sum of Rs. 11,00,000/- was lent to the accused as a loan wherein Rs. 10,00,000/- was given to him through cheque and remaining sum of Rs. 1,00,000/- was given in cash. However, he stated that, he does not know for what purpose the accused had borrowed the loan from him. He also admitted that, the accused has sent his reply to the legal notice as per Ex.D-1. However, he specifically denied the issuance of cheque for a sum of Rs. 10,00,000/- from the complainant to the accused as a part of advance for a sale agreement with respect to an immovable property. He also admitted that, the accused has sent his reply to the legal notice as per Ex.D-1. However, he specifically denied the issuance of cheque for a sum of Rs. 10,00,000/- from the complainant to the accused as a part of advance for a sale agreement with respect to an immovable property. He also denied a suggestion that after the termination of the said agreement for sale which is at Ex.D-3, the accused who was the vendor under the said agreement has returned the entire amount of Rs. 11,00,000/- given to him by the complainant. He also denied a suggestion that at the time of entering into an agreement at Ex.D-3, the complainant had collected the cheque in question as a security in the presence of DW-1 Sri. Praveen Uchil. Thus, in the cross-examination of PW-1 himself, the accused has admitted that he was given a sum of Rs. 11,00,000/- from the complainant, in which, Rs. 10,00,000/- was in the form of a cheque. It is for the said reason, the accused has suggested to PW-1 in his crossexamination that, after the termination of the agreement, the entire sum of Rs. 11,00,000/- given to him by the complainant was refunded to him. Otherwise, such a suggestion would not have been made by the accused to the complainant in his crossexamination. The complainant has denied the agreement at Ex.D-3 and also the refund of a sum of Rs. 11,00,000/- to him by the accused and also the presence of DW-1 Sri. Praveen Uchil at the time of the alleged agreement and refund of the money. 13. On the other hand, the accused, as DW-2 in his examination-in-chief, has stated that an agreement was entered into between himself and his wife as the 'first party' and the complainant as the 'second party' for the sale of an immovable property in favour of the complainant on 21-02-2007. DW-1 was present at the time of the agreement. It was at the time of agreement, the complainant had given him a cheque for a sum of Rs. 10,00,000/- and as a security, he had collected a signed cheque from the accused which is at Ex.P-1. However, due to termination of the agreement, the entire amount received by him was repaid to the complainant, once again, in the presence of DW-1 - Sri. Praveen Uchil. 10,00,000/- and as a security, he had collected a signed cheque from the accused which is at Ex.P-1. However, due to termination of the agreement, the entire amount received by him was repaid to the complainant, once again, in the presence of DW-1 - Sri. Praveen Uchil. Though he asked the complainant to return the cheque given as a security, but the complainant postponed returning of the cheque. All these contents are brought to the notice of the complainant at the earliest in the reply notice at Ex.D-1. 14. Dw-1 Sri. Praveen Uchil also has given his evidence which supports the contention taken up by the accused/DW-2. The witness has stated that he was present at the time of agreement for sale as well refund of the advance amount by the accused to the complainant. Thus, he too has stated that there was no loan transaction between the complainant and the accused as alleged in the complaint. 15. From the above evidence of DW-1 and DW-2, it is further clear that, the complainant had issued a cheque for a sum of Rs. 10,00,000/- in favour of the accused which the accused has encashed. Further, the accused has also stated that the cheque which is now dishonoured and marked at Ex.P-1 was issued by him to the complainant as a security at the time of the alleged agreement under Ex.D-3. By stating so, the accused has admitted that the cheque at Ex.P-1 was issued by him. 16. Since the accused has admitted the issuance of the cheque at Ex-P-1 by him in favour of the complainant, the presumption of existence of a legally enforceable debt arises in favour of the complainant under Section 139 of the N.I. Act which presumption is rebuttable. In order to rebut the said presumption, the accused not only got himself examined as DW-2, but also examined DW-1- Sri. Praveen Uchil. However, except the oral evidence of DW-1 and DW-2, there is nothing placed on record to show that, the cheque at Ex.P-1 was issued as a security by the accused to the complainant. Had really the accused returned the amount of Rs. 10,00,000/- to the complainant and that the said amount was towards the refund of the alleged advance amount received under Ex.D-3, then, nothing had prevented the accused from getting an endorsement to that effect in the very agreement at Ex.D-3. Had really the accused returned the amount of Rs. 10,00,000/- to the complainant and that the said amount was towards the refund of the alleged advance amount received under Ex.D-3, then, nothing had prevented the accused from getting an endorsement to that effect in the very agreement at Ex.D-3. A perusal of the said agreement, a copy of which is marked at Ex.D-3, nowhere mentions anything about the alleged return of the sum of Rs. 10,00,000/- to the complainant. When even according to the accused, the receipt of Rs. 10,00,000/- by him was through the cheque, then nothing had prevented the accused to have refunded the said amount through cheque or demand draft only, but no reasons are forthcoming as to why he should return it in the form of cash. The accused has not shown any reasons as to what compelled him to give such a huge amount in cash. That apart, the accused has not obtained any discharge receipt from the complainant about the refund of the alleged amount and dischargal of the accused from his alleged liability towards the complainant. Had really the complainant refused to return the cheque at Ex.P-1, which according to the accused, was issued to him as a security at the time of entering into an agreement as per Ex.D-3, then, nothing had prevented DW-1 and DW-2 from getting an endorsement made to that effect in Ex.D-3 itself or obtaining an undertaking letter from the complainant that he would return the cheque at Ex.P-1 without presenting the same to the Bank. Nothing of any such precaution which an ordinary prudent person is expected to take in the circumstance of the case, was taken by the accused. Apart from all these, admittedly, even after the alleged repayment of a sum of Rs. 10,00,000/- and alleged failure on the part of the complainant to return the cheque at Ex.P-1 to the accused, the accused did not give any instruction to his banker to stop the payment of the cheque, if presented for realisation. He did not even take any other appropriate action in recovering the said cheque including lodging a complaint before the Police in that regard. He did not even take any other appropriate action in recovering the said cheque including lodging a complaint before the Police in that regard. Therefore, when the circumstances warrant certain necessary action to be taken by a prudent and reasonable person in the circumstance of the case, the accused has failed to take any of them, except for the first time, coming up with his alleged defence in his reply notice as per Ex.D-1. Therefore, the mere contention of the accused though supported by the evidence of DW-2 that, there was no loan transaction as alleged by the complainant and that the alleged advance amount said to have been received by him has been returned in cash, have all proved to be not creating any preponderance of probabilities in favour of the accused, creating a suspicion in the case of the complainant. No doubt the complainant has not obtained any document to show that he had lent a hand loan much less a sum of Rs. 11,00,000/- to the accused, further, he is also not aware about the purpose for which the accused had availed the loan. But, as already observed above, when the accused in his evidence through DW-1 and as DW-2 through his reply notice at Ex.D-1 has specifically stated that, he has returned a sum of Rs. 10,00,000/- in cash, though he claim the same to be a refund of the advance amount, it was expected of the accused to show the preponderance of probabilities in his favour, to prove the refund of such an amount or return of the loan amount to the accused, since the circumstance was warranting him to do it to rebut the presumption that has accrued in favour of the complainant. The accused could not able to do that successfully. However, the Trial Court, on its own, assumed certain facts that the complainant had not sent his rejoinder to the reply sent to him by the accused as per Ex.D-1, which creates a doubt in the case of the complainant. It also observed that since the alleged loan amount was a huge sum of money, the complainant was expected to furnish the income tax details disclosing the loan transaction, which he failed to do. This created a doubt in the case of the complainant. It also observed that since the alleged loan amount was a huge sum of money, the complainant was expected to furnish the income tax details disclosing the loan transaction, which he failed to do. This created a doubt in the case of the complainant. It also assumed that since the complainant did not demand the alleged cash part which is a sum of Rs. 1,00,000/- in the alleged loan amount from the accused, the loan transaction is skeptical. Further, the Trial Court also assumed itself that the complainant has not proved his financial capacity to lend money, as such, the alleged transaction was not believable. 17. The said doubts raised by the Trial Court in its judgment were self-created as there was no basis either in the cross-examination of PW-1 or in the evidence of DW-1 and DW-2 to create those doubts. Since sending a rejoinder to a reply sent by the accused is not mandatory, the Trial Court was not justified in holding that the issuance of a rejoinder by the complainant was very much required in the case. Similarly, mere non-production of the income tax details since had not weakened the case of the complainant, it should not have come in the way of the Trial Court leading to disbelieve the case of the complainant. Further, the Trial Court failed to note that the complaint before it was the one for the alleged offence punishable under Section 138 of the N.I. Act, as such, the scope was confined to the alleged dishonour of the cheque in question, but not the recovery of the entire alleged loan amount. Therefore, the complainant could not have claimed the remaining alleged loan amount of a sum of Rs. 1,00,000/- in the Trial Court in the said criminal case. 18. Lastly, the Trial Court has also failed to notice that, no where the accused has questioned the capacity of the complainant to lend the loan of a sum of Rs. 10,00,000/- or Rs. 11,00,000/- as contended by the complainant. 1,00,000/- in the Trial Court in the said criminal case. 18. Lastly, the Trial Court has also failed to notice that, no where the accused has questioned the capacity of the complainant to lend the loan of a sum of Rs. 10,00,000/- or Rs. 11,00,000/- as contended by the complainant. In the absence of the accused questioning the financial capacity of the complainant to lend the loan and also in the absence of any circumstance of the case warranting the Trial Court to consider about the financial capacity of the complainant in lending the loan amount, the Trial Court was not correct in inviting on its own, such a task on its shoulder in a proceeding for the alleged offence under Section 138 of the N.I. Act and to suspect the case of the complainant. Since those reasons given by the Trial Court have led it to pass a judgment of acquittal, which is now proved to be an erroneous one, the said judgment deserves to be set aside. 19. On the other hand, the evidence as analysed above would clearly go to prove beyond reasonable doubt that, the cheque at Ex.P-1 issued by the accused to the complainant was towards discharge of a legally enforceable debt. Since the said cheque came to be dishonoured for the reason of insufficiency of funds, the guilt against the accused for the offence punishable under Section 138 of the N.I. Act, has stood proved. Therefore, I proceed to pass the following:- O R D E R [i] The appeal is allowed; [ii] The impugned judgment of acquittal dated 04-12-2010 passed by the Court of the First Class Judicial Magistrate (V Court), Mangalore, Dakshina Kannada, in C.C.No.219/2008, acquitting the accused Sri. Dinesh D. Udyavar, S/o. Doomappa, Age: 62 years, R/at Bengre House, Kunjithoor Village, Taluk and District Kasargod, Kerala State, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, is set aside; [iii] The said accused Sri. Dinesh D. Udyavar, S/o. Doomappa, Age: 62 years, R/at Bengre House, Kunjithoor Village, Taluk and District Kasargod, Kerala State, is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. ORDER ON SENTENCE Heard both side regarding sentence. The accused - Sri. Dinesh D. Udyavar, S/o. Doomappa, Age: 62 years, R/at Bengre House, Kunjithoor Village, Taluk and District Kasargod, Kerala State, is sentenced to pay a fine of Rs. ORDER ON SENTENCE Heard both side regarding sentence. The accused - Sri. Dinesh D. Udyavar, S/o. Doomappa, Age: 62 years, R/at Bengre House, Kunjithoor Village, Taluk and District Kasargod, Kerala State, is sentenced to pay a fine of Rs. 10,10,000/- (Rupees Ten Lakhs Ten Thousand Only) within a period of sixty days from today, in the Court of the First Class Judicial Magistrate (V Court), Mangalore, Dakshina Kannada, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. In case of default of payment of fine, the accused shall undergo Simple Imprisonment for a period of six months. In case the accused deposits the fine amount, a sum of Rs. 10,05,000/- (Rupees Ten Lakhs Five Thousand Only) be paid to the complainant as compensation and the remaining sum of Rs. 5,000/- be forfeited to the State. Registry to transmit a copy of this judgment along with Trial Court records to the Trial Court without delay. The accused is entitled for a free copy of this judgment immediately.