Research › Search › Judgment

Karnataka High Court · body

2020 DIGILAW 2188 (KAR)

B. M. Rakesh Son Of B M Mohan v. A. m. Thimmaiah

2020-11-04

K.S.MUDAGAL

body2020
JUDGMENT K.S.Mudagal, J. - Whether the impugned order of conviction and sentence passed by the Trial Court against the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act and confirmed by the First Appellate Court suffer any illegality, impropriety or incorrectness? is the question involved in this case. 2. The petitioner was the accused and respondent was the complainant in C.C.No.1393/2012. For the purpose of convenience, the parties will be referred to henceforth with their ranks before the Trial Court. 3. The complainant presented the cheque Ex.P1 dated 31.12.2009 for a sum of Rs.2,50,000/- drawn on Canara Bank, Main Branch, Madikeri for realization. The Bank returned the cheque as per the memo Ex.P2 dated 02.06.2010 with an endorsement funds insufficient , payment stopped by drawer . 4. The complainant issued notice as per Ex.P3 dated 15.06.2010 to the accused claiming that the accused in all borrowed loan of Rs.4,40,000/- from him on 04.05.2009 and out of that he repaid only Rs.1,90,000/- on 25.10.2009. He further claimed in Ex.P3 that towards discharge of remaining liability of Rs.2,50,000/- the accused issued the cheque - Ex.P1 without arranging the funds and stopped the payment, thereby, he cheated the complainant. Under the notice, he called upon the accused to pay Rs.2,50,000/- with interest at the rate of 21% per annum within fifteen days. 5. The said notice was served on the wife of the accused which is evident from the postal acknowledgment - Ex.P4. To clarify some typographical error crept in mentioning the sum in figures, the complainant issued Ex.P5 - the corrigendum to the notice on 21.06.2010. 6. The accused admittedly issued reply Ex.D1 dated 12.07.2010 to the notice Ex.P3 denying the liability. In Ex.D1, the accused claimed that he had borrowed only Rs.2,00,000/- in April 2008 and as security for repayment of the said loan, he pledged his Maruti 800 car No.KA12N981 and issued a blank cheque. He further claimed that out of Rs.2,00,000/- he repaid only Rs.1,90,000/- on 25.10.2009 and though he was ready to pay balance of Rs.10,000/- the complainant was harassing him retaining the blank cheque and the car. He claimed that when he insisted for return of cheque and the car, the complainant intimidated him and misusing the cheque, he has issued the notice. He called upon the complainant to receive Rs.10,000/- and return the cheque and the car. 7. He claimed that when he insisted for return of cheque and the car, the complainant intimidated him and misusing the cheque, he has issued the notice. He called upon the complainant to receive Rs.10,000/- and return the cheque and the car. 7. Since the amount as claimed in notice - Ex.P3 was not paid, complainant filed complaint before Judicial Magistrate, First Class, Madikeri in P.C.No.151/2010 to prosecute the accused for the offence punishable under Section 138 of the Negotiable Instruments Act. The learned Magistrate took cognizance of the offence and registered the case in C.C.No.1393/2012 and summoned the accused. On appearance, the accused denied the substance of accusation and claimed trial. Therefore, trial was conducted. 8. In support of his case, the complainant got himself examined as PW.1 and two witnesses as PWs.2 and 3 and got marked Exs.P1 to P6. The accused after his examination under Section 313 of Cr.P.C., got himself examined as DW.1 and two witnesses as DWs.2 and 3. He got marked Exs.D1 to 25. 9. The Trial Court on hearing the parties, by the impugned judgment and order dated 20.06.2015 in C.C.No.1393/2012 convicted the accused for the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced him to simple imprisonment of six months and fine of Rs.5,000/- and in default to pay fine to undergo simple imprisonment for two months. Further, the Trial Court awarded compensation of Rs.2,50,000/- to the complainant. 10. The Trial Court recorded the order of conviction and sentence on the following grounds: i) The accused admits that the cheque belongs to his account and his signature on the cheque. According to the accused, the sum borrowed was only Rs.2,00,000/- and out of that he had already paid Rs.1,90,000/- and the complainant obtained the cheque - Ex.P1 and his car No.KA12N981 Maruti 800 as security for repayment of loan and though he was ready to pay the balance amount of Rs.10,000/- the complainant was trying wrongful gain retaining the Cheque and the car. ii) According to the complainant, the accused purchased the car borrowing loan of Rs.2,20,000/- from the Bank on the surety of the relative of the complainant and failed to repay the loan amount. Therefore, to relieve the burden of his relative, the complainant repaid the loan amount. Therefore, he has retained the car. ii) According to the complainant, the accused purchased the car borrowing loan of Rs.2,20,000/- from the Bank on the surety of the relative of the complainant and failed to repay the loan amount. Therefore, to relieve the burden of his relative, the complainant repaid the loan amount. Therefore, he has retained the car. According to him, the car loan and the loan relating to Cheque are two distinct transactions. iii) Admittedly the amount paid under Exs.D2 to 24 was only Rs.13,000/-. Further, the accused himself in his cross-examination has admitted that there were two different loans. iv) The accused has failed to rebut the presumption available to the complainant under Sections 118 and 139 of the Negotiable Instruments Act. 11. The accused challenged the said order of conviction and sentence before the I Additional District and Sessions Judge, Kodagu, Madikeri in Crl.A.No.52/2015. The First Appellate Court by the impugned judgment and order concurred with the trial Court and dismissed the appeal. The accused has challenged the said order before this Court in the above revision petition. 12. Sri.Madhvachar M., learned counsel for the petitioner submits that the cheque was issued regarding a loan borrowed for a purpose of buying a car which is a contractual liability relating to such transaction the accused cannot be prosecuted under Section 138 of the Negotiable Instruments Act. He further submits that despite discharging loan of Rs.1,90,000/- since complainant unjustly retained the vehicle of the accused and the Cheque, the accused was forced to issue stop payment instructions. He further submits that for the said sum of Rs.10,000/- the Trial Court and the First Appellate Court were not justified in convicting and sentencing the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act. In support of his contention he relies upon the judgment of the Hon ble Supreme Court in Basalingappa vs. Mudibasappa, (2019) 5 SCC 418 . 13. Per contra, Sri.D.P.Mahesh, learned counsel for the respondent seeks to justify the impugned orders of the Courts below on the ground that the accused himself has admitted in his cross-examination that the loan relating to the car and the loan under the cheque - Ex.P1 were two distinct transactions. 13. Per contra, Sri.D.P.Mahesh, learned counsel for the respondent seeks to justify the impugned orders of the Courts below on the ground that the accused himself has admitted in his cross-examination that the loan relating to the car and the loan under the cheque - Ex.P1 were two distinct transactions. He further submits that when the accused admitted his signature on the cheque and that the cheque belongs to his account, the complainant had the benefit of the presumption under Section 139 of the Negotiable Instruments Act. He further submits that the accused has failed to rebut the said presumption, therefore, both the Courts rightly convicted and sentenced him. 14. This being the revision petition under Section 397 of Cr.P.C., against the concurrent findings of the trial Court and the First Appellate Court, the scope of interference in the matter is very limited. Unless it is shown that the impugned orders suffer perversity, glaring illegality, impropriety or incorrectness, this Court in the revisional jurisdiction cannot interfere with the matter. 15. Firstly it was contended that the cheque was dishonoured as the accused had issued the stop payment instructions and not for want of sufficient funds, but Ex.P2 - the cheque return memo states that the cheque was returned for the reasons funds insufficient and payment stopped by drawer . PW.2 - the Manager of the Canara Bank spoke to that effect. Though in his cross-examination it was suggested that he has no personal knowledge of Ex.P2, he denies the said suggestion. Further, he stated that the Cheque was returned after verifying the account of the accused. 16. An attempt was made to suggest that the complainant himself ticked Sl.No.1 which is meant for funds insufficient . But contrary to such attempt, in the cross-examination of PW.1 the counsel for the accused himself suggested that PW1 got issued the notice for the reason that there was no sufficient fund in the account of the accused. If at all the Cheque was returned only on the stop payment instructions, there was no impediment for the accused to produce his account extract to show that as on the date of issuance of Cheque Ex.P1 there was sufficient funds in his account. Therefore, the said contention carries no merit. 17. Admittedly, the accused and the complainant both were jewellery merchants. The accused himself suggested to PW.1 that they knew each other since 20 years. Therefore, the said contention carries no merit. 17. Admittedly, the accused and the complainant both were jewellery merchants. The accused himself suggested to PW.1 that they knew each other since 20 years. The accused also admitted that Ex.P1 - Cheque belongs to his account and that bears his signature. 18. When the complainant claimed that accused had borrowed in all Rs.4,40,000/- repaid only Rs.1,90,000/- and issued Cheque towards the remaining liability of Rs.2,50,000/-, the accused claimed that he had borrowed only Rs.2,00,000/- out of that paid only Rs.1,90,000/- and the balance was only Rs.10,000/-. According to him, for that the complainant obtained the Cheque and the car as security and did not return the car and misusing the Cheque filed a false complaint. 19. According to the complainant, the loan transaction of Rs.4,40,000/- and the vehicle loan transaction were totally distinct from each other. He claimed that his relative was surety to the vehicle loan and since accused failed to discharge the said loan, to relieve his relative, the complainant himself cleared the out standing vehicle loan and therefore, he retained the vehicle. 20. Accused/Dw.1 himself in his cross-examination admits that there was financial transaction between him and the complainant and he has not cleared the loan lent by the complainant. He further admitted that he purchased the car availing the loan from the Bank and the Bank has filed the suit against him for recovery of the said loan amount. Though he claims that he cleared the Bank loan under Exs.D2 to 24 receipts, he admits that the total sum covered in Exs.D2 to 24 only Rs.13,000/-, whereas the loan amount was Rs.2,20,000/-. 21. Accused/Dw.1 admitted that he has no document to show that he has paid the loan of Rs.2,00,000/- to the Bank. When it was suggested to him that the remaining loan amount except the said sum of Rs.13,000/- paid by the complainant, he state that the complainant paid part of the loan amount. 22. In his cross examination, DW.1 tried to introduce a story that complainant was due to pay him Rs.1,80,000/- towards chit transaction and out of that only Rs.40,000/- he paid to the Bank. He admits that complainant was not running any chit transaction, but states that his younger brother Poovaiah was running a chit transaction. 23. 22. In his cross examination, DW.1 tried to introduce a story that complainant was due to pay him Rs.1,80,000/- towards chit transaction and out of that only Rs.40,000/- he paid to the Bank. He admits that complainant was not running any chit transaction, but states that his younger brother Poovaiah was running a chit transaction. 23. Dw.1 admits that he has not initiated any legal action against Poovaiah for recovery of Rs.1,40,000/- allegedly payable by Poovaiah. Though he claimed that Poovaiah later paid Rs.1,40,000/-, he did not examine the said Poovaiah nor proved such repayment. To crown all this, DW.1 himself in his cross-examination admitted that the loan transaction between him and the complainant and the loan borrowed by him from the Bank for purchasing the car were distinct. 24. He himself admits that Ex.D2 to 24the receipts for the alleged payments made towards the car loan pertain to the year 2006. According to the complainant, the loan relating to the cheque in question was borrowed in 2009. Though DW.2 states that the loan borrowed was only Rs.2,00,000/-, but he states that the said loan was borrowed approximately in April 2008 i.e., proximate to the date of lending alleged by the complainant. 25. Admittedly, the accused neither issued any notice to the complainant for returning the cheque and the car nor initiated any legal proceedings prior to the complainant issuing notice Ex.P3. He admits that he had no impediment to do so. 26. Dw.1 in his cross-examination admitted that the complainant s relative was the surety to the car loan borrowed by him, but he does not know his name and his residential address. That supports the contention of the complainant that to relieve his relative from the car loan liability and he intervened and paid the car loan and that they were two distinct transactions. 27. Considering all such aspects, the trial Court held that car loan transaction and the loan transaction under Ex.P1 were two distinct transactions and the accused failed to rebut the presumption available to the complainant under Sections 118 and 139 of the Negotiable Instruments Act. 28. In Basalingappa s case relied upon by the learned counsel for the petitioner, the lending capacity of the complainant was disputed and the evidence of the complainant itself created a doubt about the lending capacity of the complainant. 28. In Basalingappa s case relied upon by the learned counsel for the petitioner, the lending capacity of the complainant was disputed and the evidence of the complainant itself created a doubt about the lending capacity of the complainant. Therefore the Hon ble Supreme Court held that under such circumstances, the accused could rely on the evidence of the complainant himself to rebut the presumption. It was further held that in such event the accused not leading defence evidence is inconsequential. The said judgment is not applicable to the facts of the case. 29. Above discussions clearly show that the trial Court on the sound appreciation of the evidence and the law rightly rejected the defence of the accused, convicted and sentenced him and that was upheld by the First Appellate Court. This Court does not find any illegality, impropriety or incorrectness in the impugned orders of the Courts below. Therefore, the revision petition is dismissed. Compensation amount deposited if any with accrued interest shall be disbursed to the complainant. Pending IAs stood disposed of.