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2020 DIGILAW 1865 (KAR)

P. Narasimhaiah v. G. D. Mutturaju

2020-09-28

H.B.PRABHAKARA SASTRY

body2020
JUDGMENT H.B.Prabhakara Sastry, J. - In the complaint filed by the present appellant under Section 200 of Code of Criminal Procedure, 1973, against the present respondent, for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as 'N.I.Act'), the learned XVIII Addl.Chief Metropolitan Magistrate & XX Addl.Small Causes Judge, Bengaluru City, (hereinafter for brevity referred to as 'trial Court'), by the judgment dated 08.11.2010, passed in C.C.No.13898/2006, acquitted the respondent/accused of the said offence. Aggrieved by the same, the complainant/appellant has preferred the present appeal. 2. The summary of the case of the complainant in the trial Court is that the respondent/accused in order to discharge his legal liability towards the complainant, had issued two cheques bearing No.941701 and No.941702, dated 5.12.2005 and 20.12.2005 respectively, each for a sum of Rs. 1 lakh and drawn on State Bank of India, West of Chord Road Branch, Bengaluru, in favour of the complainant. When the cheques were presented for its realisation by the complainant, both the cheques were dishonoured with the Banker's endorsement "funds insufficient" on 24.1.2006. Thereafter, complainant got issued a legal notice to the accused through Registered Post Acknowledgement Due, as well under Certificate of Posting on 1.2.2006, demanding the payment of the cheque amount. The accused/respondent sent an untenable reply, but, did not pay the cheque amount, which made the complainant to institute a criminal case against him for the offence punishable under Section 138 of N.I.Act. 3. The respondent who was the accused in the trial Court appeared and contested the matter. In order to prove the guilt of the accused, the complainant got himself examined as PW-1 and got marked documents from Exs.P-1 to P-11. On behalf of the accused, accused was examined as DW-1 and other two witnesses as DW-2 and DW-3 and got marked documents at Ex.D-1 and D-1(a). 4. After hearing both side, the trial Court by its impugned judgment dated 08.11.2010, acquitted the accused of the offence punishable under Section 138 of N.I.Act. 5. The trial Court records were called for and the same are placed before this Court. 6. Heard the arguments of learned counsel from both side and perused the materials placed before this Court. 7. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court. 8. 5. The trial Court records were called for and the same are placed before this Court. 6. Heard the arguments of learned counsel from both side and perused the materials placed before this Court. 7. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court. 8. Learned counsel for the appellant in his argument submitted that wives of the complainant and the accused are sisters, as such, believing his co-brother, the complainant had advanced him the loan amount. However, the trial Court without appreciating the materials placed before it in its proper perspective, has erroneously acquitted the accused with an observation that the details of the loan were not given by the complainant, as such, the presumption was stood rebutted. Learned counsel further submitted that when the issuance of the cheques is admitted, so also, its dishonour and service of legal notice upon the accused, the trial Court was required to convict the accused. 9. Per contra, learned counsel for the respondent in his argument submitted that the alleged loan is a bogus one, as such, at the earliest point of time in his reply to the notice sent by the complainant, the accused has made it clear about the non-existence of any loan. He also submitted that Ex.D-1 shows that the loan was between the wives of the parties herein and the same had stood cleared. He further stated that the evidence of DW-2 makes it very clear that no loan transaction was there between the complainant and the accused as alleged. Further, there was no contractual relationship between the complainant and the accused. No details are forthcoming as to when, where and how the loan was given to the accused. Considering these aspects, the trial Court has rightly acquitted the accused of the alleged offence. 10. After hearing both side, the points that arise for my consideration are : 1) Whether the complainant has proved beyond reasonable doubt that the accused has committed an offence punishable under Section 138 of N.I.Act as alleged in the complaint? 2) Whether the judgment under appeal deserves an interference at the hands of this Court? 11. The complainant got himself examined as PW-1, wherein he had reiterated the contentions taken up by him in his complaint. 2) Whether the judgment under appeal deserves an interference at the hands of this Court? 11. The complainant got himself examined as PW-1, wherein he had reiterated the contentions taken up by him in his complaint. In support of his contention, he got produced two dishonoured cheques and got them marked at Exs.P-1 and P-2 and the signature of the accused therein at Ex.P-1(a) and P-2(a) respectively. He also produced and marked two Bank endorsements about dishonour of the cheques at Exs.P-3 and P-4, a copy of the legal notice sent on his behalf to the accused at Ex.P-5, reply to the said notice sent by the accused at Ex.P-6, Certificate of Posting at Ex.P-7, the postal receipt at Ex.P-8 and the postal acknowledgement card at Ex.P-9. Even in his cross-examination also, he adhered to his original version. 12. The respondent/accused got himself examined as DW-1 and in his examination-in-chief filed in the form of affidavit evidence, apart from denying the alleged loan transaction between the complainant and himself, has stated that he had taken a hand loan through his wife from the wife of the complainant Smt.Vanitha, for a sum of Rs. 3 lakhs. It was at that point of time, he had given four blank cheques as security to the complainant's wife in the year 2002. He had also given on demand Promissory Note with respect to the said transaction. Though he has repaid the entire loan amount in two installments, but, the wife of the complainant did not return the four cheques given by him and on demand Promissory Note alleging that they were misplaced at her end. However, the complainant has misused those four cheques by falsely presenting them in the Bank. In his support, he got marked a letter said to have been issued by the wife of the complainant acknowledging the clearance of the loan given by her to the wife of the accused. This witness was also subjected to a detailed cross-examination, wherein he admitted the cheques at Exs.P-1 and P-2 as belonging to him and they bear his signatures. However, he adhered to his original stand that those cheques were given only as a security to the wife of the complainant. 13. The accused also got examined his wife Smt.Gangamma as DW-2, who also has given her evidence on line with DW-1. However, he adhered to his original stand that those cheques were given only as a security to the wife of the complainant. 13. The accused also got examined his wife Smt.Gangamma as DW-2, who also has given her evidence on line with DW-1. She too has stated that the alleged loan transaction was between her and her sister, who incidentally was the wife of the complainant, for a sum of Rs. 3 lakhs and the said loan had already been cleared. It was at that time, four cheques of the accused were given to the wife of the complainant as a security, which was misused by the complainant in the present form. The denial suggestions made to her were not admitted as true by the witness. 14. The accused also got examined one Smt.Vanitha, who is said to be the wife of the complainant. However, in her two line examination-inchief, she has only stated that the accused is her brother-in-law and she does not know why she was summoned to the Court. Thus, the evidence of DW-3 would not in any manner favour the accused. 15. From the evidence placed before the Court, the admitted fact remains that the wives of the complainant and the accused are own sisters, as such, the complainant and the accused are co-brothers. It is also not in dispute that wives of the complainant and the accused had a loan transaction inter se for a sum of Rs. 3 lakhs and the said loan liability has been cleared by the wife of the accused who was the borrower as evidenced in Ex.D-1. However, the fact in dispute remains to be the alleged loan transaction between the complainant and the accused and the alleged issuance of cheques by the accused to the complainant towards the alleged repayment of loan amount by the accused. According to the complainant, the accused had issued the cheques in question in order to discharge his legal liability of a hand loan alleged to have been borrowed from him by the accused. However, no where in his evidence the complainant has stated as to when, where and how the alleged loan was given. According to the complainant, the accused had issued the cheques in question in order to discharge his legal liability of a hand loan alleged to have been borrowed from him by the accused. However, no where in his evidence the complainant has stated as to when, where and how the alleged loan was given. Learned counsel for the respondent forwarding the said point as his main point of argument, submitted that in the absence of any details of the alleged loan transaction, it cannot be believed that there existed a loan transaction between the complainant and the accused. 16. No doubt, in the case where a person alleges of a loan transaction and alleges the repayment of the alleged loan amount from the alleged borrower, he is required to prove the alleged loan transaction to the satisfaction of the Court. However, in the instant case, though no such details regarding the alleged loan has been given by the complainant, but, it cannot be forgotten that accused has clearly admitted that the dishonoured cheques marked as Exs.P-1 and P-2 were issued by him and they bear his signature. Admittedly, those two cheques shows the name of the complainant as the 'payee'. When the accused has taken a specific contention that he had never issued those two cheques to the complainant towards the alleged repayment of the loan, but, were issued to the wife of the complainant with whom his wife (accused's wife) had availed a loan of a sum of 3 lakhs, then, it was for him to prove the same. No doubt, the accused has made an attempt in that regard by sending a reply dated 10.2.2006 to the notice of the complainant at the first point of time as per Ex.P-6 and thereafter, by leading his evidence as DW-1 and also examining his wife as DW-2. No doubt, both DW-1 and DW-2 have stated about the alleged loan transaction between the wife of the complainant and DW-2 for a sum of Rs. 3 lakhs and produced a chit at Ex.D-1, which shows the acknowledgement of receipt of a sum of Rs. 3 lakhs said to have been made by the wife of the complainant. No doubt, both DW-1 and DW-2 have stated about the alleged loan transaction between the wife of the complainant and DW-2 for a sum of Rs. 3 lakhs and produced a chit at Ex.D-1, which shows the acknowledgement of receipt of a sum of Rs. 3 lakhs said to have been made by the wife of the complainant. However, it is noteworthy that, no where the said document mentions about the holding of the four blank cheques said to have been issued by the wife of the accused at the time of availing loan by the wife of the complainant. 17. Incidentally, the wife of the complainant was also summoned from the accused side and she was examined as DW-3. However, as observed above, the two sentence evidence of the said witness was of no use to the accused at all. It is not understood as to how come the accused did not examine the witness in detail about the loan transaction but concluded his examination of the witness merely at her opening statement that she does not know why she was summoned to the Court. In that manner, even though the accused had a very important witness before him who could have thrown light regarding the alleged issuance of four blank cheques by the wife of the accused to her, was not properly made use of by the accused. This not only strengthens the case of the complainant that it was the accused and accused alone who had given the two cheques at Exs.P-1 and P-2 to him, but, also shows that the same was towards discharge of a legally enforceable debt. It cannot be forgotten that once the issuance of cheque by the accused is established, then under Section 139 of N.I.Act, a presumption forms in favour of the complainant about the existence of legally enforceable debt. 18. Our Hon'ble Apex Court in Uttam Ram vs- Devinder Singh Hudan and another, (2019) 10 SCC 287 , with respect to Sections 118, 138 and 139 of N.I.Act, was pleased to observe that, presumption mandated by Section 139 of N.I.Act, does indeed include the existence of a legally enforceable debt or liability. It further observed that a bare denial of the passing of the consideration and existence of debt is not enough to rebut the presumption. It further observed that a bare denial of the passing of the consideration and existence of debt is not enough to rebut the presumption. Thus, in the instant case, the presumption has formed in favour of the complainant and a mere denial about the passing of the consideration and the existence of the debt by the accused is not enough to rebut the said presumption. 19. The accused in the instant case when had taken a specific contention that four cheques were issued to the wife of the complainant as a security when his (accused's) wife availed a loan of a sum of 3 lakhs from the wife of the complainant, has not shown diligence to demand the return of those four cheques from the wife of the complainant at the time of alleged repayment of the loan to her. No doubt, accused has stated that such a demand was made by him and his wife, but the wife of the complainant stated that those cheques were misplaced. If that were to be the case, nothing had prevented the accused and his wife either withholding the alleged repayment of their loan towards the wife of the complainant pending return of the four blank cheques said to have been given by him, or at least, they could have obtained an endorsement to that effect at Ex.D-1 from the wife of the complainant. Had really the accused had given four cheques to the wife of the complainant as a security and she had failed to return those cheques on the pretext of their alleged misplacement, then, she would have necessarily mentioned about the same in Ex.D-1. It is because, if she has given a written acknowledgement of the alleged repayment of the loan amount with her alleged signature to the said acknowledgement, she would have definitely mentioned the retention of those four alleged blank cheques with her. The accused has not obtained any such endorsement nor even shown any reason for not obtaining any such endorsement at Ex.D-1. Added to this and to the surprise, even though the said wife of the complainant was put in the witness box as DW-3 by the accused himself, he did not even shown her the alleged acknowledgement at Ex.D-1 and got it confirmed that it was issued by her. Added to this and to the surprise, even though the said wife of the complainant was put in the witness box as DW-3 by the accused himself, he did not even shown her the alleged acknowledgement at Ex.D-1 and got it confirmed that it was issued by her. Thus, on this aspect also, what evidence the accused was expected to place before the Court in the circumstances of the case and though he was in a better position to place them, he failed to place the same. Therefore, it cannot be said that the cheques at Exs.P-1 and P-2 were issued by the accused only as a security towards the loan availed by his wife from the wife of the complainant. On the other hand, the issuance of the cheques by the accused showing the name of the complainant as 'payee' therein presumes that under Section 118 of N.I.Act, those two cheques were drawn for consideration. 20. In the said circumstances, the argument of learned counsel for the respondent that there was no contractual relationship between the complainant and the accused and the absence of mentioning of the date, time and place of the alleged loan by the complainant would create a suspicion in the case of the complainant, is not acceptable. Further, merely because the evidence of DW-2 that four cheques of the accused were given to her sister as a security has not been specifically denied in her cross examination, that itself would not dilute the case of the complainant since the complainant is the payee under Exs.P-1 and P-2 and the accused though had a better and most important witness before him as DW-3, has failed to make use of the said witness appropriately in her evidence in the matter. However, the trial Court did not appreciate the evidence led by the parties on this point. On the other hand, it proceeded in its reasoning as though it is a civil suit for recovery of money and expected the complainant to discharge his burden of proving the debt like in a money recovery suit. It did not notice the fact that the complainant had the benefit of presumption under Section 139 of N.I.Act in his favour and of the fact that the accused has failed to rebut the said presumption to the satisfaction of the Court. It did not notice the fact that the complainant had the benefit of presumption under Section 139 of N.I.Act in his favour and of the fact that the accused has failed to rebut the said presumption to the satisfaction of the Court. This has led the trial Court to pronounce the judgment of acquittal of the accused from the alleged offence. Since the said judgment is now proved to be erroneous and since it is now proved that the complainant has proved the alleged guilt of the accused which is punishable under Section 138 of N.I.Act, the impugned judgment of the trial Court deserves to be set aside, for which, the interference of this Court is warranted. 21. Accordingly, I proceed to pass the following order: ORDER The Criminal Appeal is allowed . The Judgment dated 08.11.2010, passed by the learned XVIII Addl. Chief Metropolitan Magistrate & XX Addl.Small Causes Judge, Bengaluru City, in C.C.No.13898/2006, acquitting the respondent/accused for the offence punishable under Section 138 of N.I.Act is set aside. The respondent/accused Sri G.D.Mutturaju, residing at No.497/A, 11th A Cross, 4th Main Road, West of Chord Road II Stage, Mahalakshmipuram, Bengaluru 560 086, is convicted for the offence punishable under Section 138 of the N.I. Act and accordingly sentenced to pay a fine of Rs. 2,20,000/- in the trial Court within two months from today. In case of default in payment of fine, the accused shall undergo simple imprisonment for a period of three months. In case the accused pays the entire fine amount, a sum of Rs. 2,10,000/- be paid to the complainant as compensation and remaining sum of Rs. 10,000/- shall go to the State. Registry to transmit 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.