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Karnataka High Court · body

2020 DIGILAW 2031 (KAR)

Syed Shantaj v. Syed Rizwan Ahmed

2020-10-12

K.S.MUDAGAL

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JUDGMENT K.S.Mudagal, J. - This revision petition is filed by the accused challenging the judgment and order of conviction and sentence for the offence punishable under Section 138 of Negotiable Instruments Act, 1988 ('the NI Act' for short) passed by the trial Court and confirmed by the First Appellate Court. 2. Respondent was the complainant and the petitioner was the accused before the trial Court. For the purpose of convenience, the parties will be referred to henceforth with their ranks before the trial Court. 3. The complainant presented Cheque Ex.P.2 for Rs.34,00,000/- drawn on Canara Bank said to be issued by the accused in his favour for encashment. That was dishonoured as per memo Ex.P4 with the endorsement "payment stopped by the drawer". The complainant issued notice Ex.P5 calling upon the accused to pay the Cheque amount. 4. Acknowledgment regarding delivery of notice was not received. Therefore, the complainant's counsel corresponded under Ex.P7 to the Post Master to clarify about the status of the delivery of the notice. Under reply Ex.P8 dated 22.09.2008 the Senior Superintendent of Post Office, Bengaluru East informed that the article/notice was delivered on the addressee on 07.08.2008. 5. Thereafter the complainant filed the complaint in PCR No.11476/2008 before the XIV Additional Chief Metropolitan Magistrate, Bengaluru against the accused to prosecute him for the offence punishable under Section 138 of the NI Act. 6. The complainant alleged that under the memorandum of sale agreement dated 09.02.2007, the accused agreed to sell his lands bearing Sy.Nos.27/1 measuring 1 acre 51/2 guntas, 27/2 measuring 371/2 guntas and 28/2 measuring 1 acre 71/2 guntas of Doddappanahalli village, Kasaba Hobli, Devanahalli Taluk, Bengaluru Rural District. He further alleged that the accused received advance consideration of Rs.24,00,000/- on different dates by cash and cheques, but to cheat the complainant, the accused sold the properties to third parties. He further alleged that when complainant questioned, the accused agreed to pay a sum of Rs.34,00,000/- and towards that liability and issued the Cheque in question which was dishonoured as aforesaid. Thus he sought to prosecute the accused for the offence under Section 138 of the NI Act. 7. The trial Court after taking cognizance summoned the accused. He did not plead guilty. Therefore, trial was conducted. The complainant got himself examined as PW.1 and got marked Exhs.P1 to P8. Thus he sought to prosecute the accused for the offence under Section 138 of the NI Act. 7. The trial Court after taking cognizance summoned the accused. He did not plead guilty. Therefore, trial was conducted. The complainant got himself examined as PW.1 and got marked Exhs.P1 to P8. The accused after his examination under Section 313 of Cr.P.C. got himself examined as DW.1 and got marked documents at Exs.D1 to D5. 8. In the cross examination of PW.1 the accused disputed the sale agreement - Ex.P1, issuance of Cheque Ex.P2, service of notice Ex.P5 and claimed that the owner of the land is the mother of Haseena Bi and the land was granted to him under the Karnataka Land Reforms Act. He contended that Haseena Bi challenged the grant order before the Karnataka Administrative Tribunal ('the KAT' for short) and when the litigation was pending before the KAT, the complainant entered the scene as GPA holder of Haseena Bi and pressurized him to part with the lands. He further contended that when he did not yield, the complainant with the aid of some rowdy elements under coercion obtained the Cheque in question. Thus he claimed that there was no debt due to the complainant. 9. The trial Court on hearing the parties convicted the petitioner for the offence punishable under Section 138 of NI Act and sentenced him to pay fine of Rs.34,50,000/- in default to undergo simple imprisonment for one year. Out of the total fine amount, a sum of Rs.34,40,000/- was ordered to be paid as compensation to the complainant and Rs.10,000/- was ordered to be remitted to the State. 10. The trial Court passed the judgment of conviction and sentence on the following grounds: i) The accused admits that the Cheque belonged to his account and his signature on the same. But, his defence was that complainant obtained the Cheque under duress. ii) Once the accused admits that the Cheque belongs to his account and his signature on the same, the presumption under Section 139 of NI Act to effect that the Cheque was issued towards the discharge of liability arises. iii) Then the burden lies upon the accused to rebut the presumption. The accused failed to rebut the presumption by adducing acceptable evidence. iii) Then the burden lies upon the accused to rebut the presumption. The accused failed to rebut the presumption by adducing acceptable evidence. iv) Though the accused filed complaint as per Ex.D1 in PCR No.41/2008 against the complainant herein, in the said case, the Police filed B report. Therefore, the contention that the Cheque was obtained under duress cannot be accepted. 11. The accused challenged the said judgment and order in Crl.A.No.25043/2012 before the 57th Additional City Civil and Sessions Judge, Mayohall Unit, Bengaluru (CCH-58). Before the first Appellate Court both the complainant and accused filed applications under Section 391 Cr.P.C. seeking leave to adduce further evidence. The First Appellate Court by order dated 03.08.2015 allowed the applications and permitted both the parties to lead further evidence. Thereafter before the Appellate Court the complainant was examined as RW.1 and got marked Ex.R.1. In the cross-examination of RW.1 Ex.P.1 to P5 were marked on behalf of the accused by way of confrontation. 12. The First appellate Court on hearing the parties by the impugned judgment dismissed the appeal and confirmed the order of conviction and sentence passed by the trial Court agreeing with the reasonings and findings of the trial Court. 13. Sri Shaikh Saoud, learned counsel for the petitioner seeks to assail the impugned orders of conviction and sentence on the following grounds: i) The alleged agreement of sale under Ex.P1 was violative of the provisions of the Karnataka Land Reforms Act and there was a bar to alienate the property for 15 years. Therefore, the memorandum of sale agreement Ex.P1 and the supplemental sale agreement Ex.R.1 are void. Therefore the alleged debt cannot be said to be legally recoverable debt. ii) Ex.P1 and R.1 were apparently concocted and the Courts below failed to appreciate the same. iii) Though the complainant claimed that after entering into the agreements, the accused has sold the property to third parties. The same was not proved. Even as per Ex.P1 the amount received was Rs.24,00,000/-. But, it does not match with the claim of 34 lakhs or 24 lakhs. iv) The notice Ex.P5 was not served on the accused. v) The Courts below failed to appreciate that complaint filed by the accused against the complainant alleging extortion and forgery was pending before the Magistrate and application of the accused thereon for discharge was rejected. 14. But, it does not match with the claim of 34 lakhs or 24 lakhs. iv) The notice Ex.P5 was not served on the accused. v) The Courts below failed to appreciate that complaint filed by the accused against the complainant alleging extortion and forgery was pending before the Magistrate and application of the accused thereon for discharge was rejected. 14. In support of his arguments, he relies upon the following judgments: i) Q Soft System and Solutions (P) Vs. Sri H.N.Giridhar, (2008) ILR(Kar) 643 ii) R. Parimala Bai vs. Bhaskar Narasimhaiah (Crl.P.No.1387/2011- D.D.6.07.2018) iii) Virendar Singh vs. Laxmi Narain and another, (2007) CriLJ 2262 15. Per contra, Shri Razvi, learned counsel for the respondent seeks to justify the impugned judgments and orders on the following grounds: i) The accused admitted that Cheque belongs to his account and his signature on the same. By virtue of Section 139 of NI Act, the Cheque is presumed to be issued towards the discharge of legally recoverable debt. ii) Though the accused claimed that he had initiated proceedings against the complainant for forgery and extortion in securing Ex.P2, his complaint was dismissed for non prosecution as long back as on 16.07.2016. Therefore, the findings of the Courts below that the accused has failed to rebut the presumption under Section 139 of NI Act do not call for interference. iii) There is no dispute that the accused was the owner of the lands in question. The accused at the earliest point of time did not reply the notice Ex.P5 alleging any extortion or forgery. Therefore, such defence in the later part of the proceedings is only an afterthought. iv) The complaint in PCR NO.41/2008 was only an after thought which was filed to evade the liability under Ex.P2. v) Before the trail Court and the first Appellate Court, the accused has not taken the defence of agreement being void. Such defence is not open for the first time in this petition. vi) Even assuming that there was a bar for alienation for 15 years that was only for transfer and not to enter into an agreement of sale/transfer Therefore, the said defence deserves no merit. vii) Even assuming that the agreement was void, since the receipt of 24 lakhs was proved, Section 65 of the Indian Contract Act bars the accused to make unjust enrichment. 16. vii) Even assuming that the agreement was void, since the receipt of 24 lakhs was proved, Section 65 of the Indian Contract Act bars the accused to make unjust enrichment. 16. In support of his arguments, he relies upon the following judgments: i) APS Forex Services Pvt.Ltd vs. Shakti International Fashion Linkers and others, (2020) AIR SC 945 Regarding issuance of Cheque towards liability. 17. The complainant contended that the accused though agreed under Ex.P1 to sell his lands and received Rs.24,00,000/- as advance sale consideration, cheated him alienating the properties to others. He further alleged that towards discharge of the amount of Rs.24,00,000/- and damages, accused issued Cheque Ex.P2 for Rs.34,00,000/-. 18. The accused contended that there was no such agreement of sale. The complainant with the aid of rowdy elements under intimidation obtained the agreement Ex.P1 and Cheque Ex.P2. There was no specific denial of lending capacity of the complainant. The complainant was a retired Air Force Officer. The suggestion to PW1 in the cross examination that he was dismissed from service was denied. Accused did not say so at least in his evidence. Therefore, it can be said that the lending capacity of complainant was not seriously in issue and stood proved. 19. The accused in paras 4 and 10 of his affidavit filed by the way of chief examination admitted his signature on Ex.P1 & Ex.P2 and that the Cheque belonged to his account. Under such circumstances, the statutory presumption under Section 139 of the NI Act to the effect that the Cheque was issued towards discharge of debt or liability arises. 20. In APS Forex Services Pvt. Ltd' s case the Hon'ble Supreme Court held that once issuance of Cheque is admitted, there is always presumption that there exists enforceable debt or liability. Therefore, the burden was on the accused to rebut the said presumption. To prove the theory of obtaining Ex.P2 Cheque and Ex.P1 agreement under coercion, except his self serving testimony, the accused did not examine any other witness. 21. If at all the documents were obtained under coercion, the accused would have questioned at the earliest point in time. Ex.P5 statutory notice was sent to the accused on 01.08.2008. It is not the case of the accused that the said notice was sent to the wrong address and that the address shown therein was not his address. 21. If at all the documents were obtained under coercion, the accused would have questioned at the earliest point in time. Ex.P5 statutory notice was sent to the accused on 01.08.2008. It is not the case of the accused that the said notice was sent to the wrong address and that the address shown therein was not his address. On query regarding delivery of notice, the postal authority under Ex.P8 has reported that the notice was delivered on 22.09.2008. 22. In the notice the complainant had alleged about the execution of the sale deed dated 09.02.2007, receipt of Rs.24,00,000/- as part consideration and cheating the complainant by alienating the properties to others. Though the accused in the cross examination stated that notice was not served on him, under Section 114(f) of the Evidence Act, a presumption arises that the notice was served on him. The presumption is further substantiated by the letter of the postal authority. It was not the case of the accused that Ex.P8 was not issued by the postal authority. Even postal receipt was produced by the complainant. Therefore, the Courts below were justified in imputing the contents of notice to the accused. 23. When the notice containing such serious allegations and financial implications was issued, if the case of the complainant was false, no man of ordinary prudence sits back without contraverting those allegations by issuing a reply. 24. Regarding Ex.D1 to D5, there is no dispute that on the accused filing the complaint as per Ex.D1 before the Magistrate against the present complainant and others alleging that Ex.P2 and other documents were obtained under coercion, the matter was referred to jurisdictional police for investigation. It is also not disputed that the police filed 'B' summary report. 25. Though on contest, 'B' summary report was rejected and cognizance was taken in Ex. D1 against the complainant herein, admittedly the said proceedings were dismissed by the Magistrate in 2016. That order was not challenged all these years. Therefore, Courts below rightly concluded that the defence set up by the accused was not probabilized and the presumption under Section 139 of NI Act was not rebutted. 26. D1 against the complainant herein, admittedly the said proceedings were dismissed by the Magistrate in 2016. That order was not challenged all these years. Therefore, Courts below rightly concluded that the defence set up by the accused was not probabilized and the presumption under Section 139 of NI Act was not rebutted. 26. On this Court reserving the above matter for judgment, Counsel for the accused submitted in the Registry, copy of the petition purportedly filed by the accused under Section 482 of Cr.P.C. for quashing of the order of dismissal of his complaint in C.C.No.3339/2013 for non-prosecution. Those records do not even show that the said petition is registered in this office. Therefore that document in no way advances the defence of the accused that the Cheque was obtained under coercion etc. 27. It was contended that the amount mentioned in Ex.P1 is Rs.23,00,000/-. Therefore, the Courts below were wrong in accepting that the accused has received Rs.24,00,000/-. The primary document to be proved was Ex.P2 the Cheque. Ex.P1 was produced to substantiate that the Cheque was issued towards the discharge of liability under a land deal. According to the complainant in all, Rs.24,00,000/- was received and Cheque was issued towards liability of Rs.24,00,000/- plus Rs.10,00,000/- as damages for breach of agreement. 28. As already pointed out, the accused in his affidavit admits that Ex.P1 was issued by him but under coercion. The theory of coercion is also rejected. Further, before the First Appellate Court another agreement as per Ex.R1 was produced where the receipt of Rs.24,00,000/- was admitted. Therefore, the fact that amount mentioned in Ex.P1 was Rs.23,00,000/- does advance the case of the accused. Reg. allegation of void Agreement : 29. Learned Counsel for the accused contends that in the grant order there was bar for transfer of lands for 15 years from the date of the grant, therefore, the agreement under Ex.P1 and Ex.R1 were void. No such defence was taken before the trial Court and the Appellate Court. The said contention is being raised for the first time before this Court. On that count only the said contention is liable to the rejected. 30. Even otherwise the accused did not produce the grant order or the copy of the grant order to show that there was a bar for alienation. The said contention is being raised for the first time before this Court. On that count only the said contention is liable to the rejected. 30. Even otherwise the accused did not produce the grant order or the copy of the grant order to show that there was a bar for alienation. It is a settled position of law that mere agreement to sell does not amount to transfer of property. What would be barred is the transfer of property and not agreement to transfer the property. Therefore, there is no merit in the contention that the agreement was void. Reg. consideration being illegal 31. Learned Counsel for the accused contended that the agreements Ex.P1 and Ex.R1 were void, therefore, as per Section 23 of the Indian Contract Act, 1972 the consideration becomes illegal and the recovery of the same cannot be enforced. The contention that agreements was void is already rejected. Apart from that, Section 65 of the Indian Contract Act binds him to refund the money received. The said section bars the accused from making unjust enrichment. 32. The judgments relied upon by petitioner's counsel are not applicable to the facts of the case. Looked from any angle, there is no error, illegality, incorrectness in the judgments of conviction and sentence passed by the Courts below. Therefore, the revision petition is dismissed.