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2020 DIGILAW 415 (KAR)

Vishal v. Prakash Kadappa Hegannawar

2020-02-13

PRADEEP SINGH YERUR

body2020
JUDGMENT 1. This appeal is filed by the complainant being aggrieved by the order of acquittal passed by the Principal Civil Judge and JMFC, Gokak vide its order dated 02.05.2016, acquitting the accused for the of fence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as N.I. Act for short). 2. The respondent herein is the accused. The parties herein shall be referred to as per their status in the Trial Court. 3. The complaint came to be filed by the complainant against the accused for recovery of a sum of Rs.14,00,000/-. It is the case of the complainant that his father and the accused were known to each other for the last 15 years and the accused was in need of money and requested for loan from the complainant for his business. Accordingly, the complainant has advanced a sum of Rs.14,00,000/- as loan in the month of December 2006 for his hotel business and that the accused had agreed to repay the said amount within two months. It is the case of the complainant that during first week of March, he requested the accused to repay the loan amount and accordingly on 03.04.2007 the accused issued a cheque for Rs.14,00,000/- in favour of the complainant which is produced and marked as Ex.P-1. When the accused presented the cheque for encashment, the same came to be dishonoured on 04.04.2007 for the reasons of account closure, pursuant to which the complainant got issued a legal notice on 21.04.2007 which was duly served to the accused on 23.04.2007 and that the accused has not repaid the amount and neither he has replied to the legal notice. Hence, the complainant filed the present complaint against the accused. 4. After service of summons from the Trial Court, the accused appeared before the learned Magistrate and pleaded not guilty for the accusations made against him and claimed to be tried. Thereafter, the parties went into trial before the learned Magistrate and the complainant got examined P.Ws.1 to 4 and got marked Exs.P-1 to P-9. The accused got examined himself as sole witness and got marked Exs.D-1 and D-2. The complainant examined himself as P.W.1 and he was subjected to cross-examination. 5. It is the defence taken by the accused that he does not know the complainant. The accused got examined himself as sole witness and got marked Exs.D-1 and D-2. The complainant examined himself as P.W.1 and he was subjected to cross-examination. 5. It is the defence taken by the accused that he does not know the complainant. He has no business transactions with the complainant and that the alleged cotton business which is alleged by the complainant was closed down and so also the hotel business for which the complainant alleges that he has given the loan, was also closed in the year 2007. The accused has also taken his defence that he has closed this particular account through which Ex.P1 cheque is issued in the year 2005. Further the accused has taken the defence that there is no written document or agreement between the complainant and the accused for having lent huge amount of Rs.14,00,000/-. Further it is the case of the accused that the father of the complainant has taken away the cheque from the office of the accused which he came to know only after he was served with the summons from the Trial Court. 6. It is the specific case of the accused that he has never given cheque to the complainant or his father. After giving instructions to the Bank to close the account, he has returned the remaining cheque leaves to the Bank. The accused has also taken a plea that he has not received the legal notice and accordingly, the service of notice is not proper and therefore, the complaint is liable for dismissal and the accused is to be acquitted on that ground. After recording of the statement under Section 313 of Cr.P.C., the accused also stepped into the witness box and led in his evidence contending the same as stated supra. The accused also stated that the complainant does not have the capacity to pay the amount as alleged in the complaint and that there is no legal debt or liability as against the complainant. After going through the material evidence and the documents, the learned Magistrate acquitted the accused for the alleged offence. 7. Being aggrieved by the said judgment of acquittal, the appellant has filed the present appeal challenging the acquittal order of the learned Magistrate. 8. I have heard the learned counsel for the appellant and the respondent. 9. After going through the material evidence and the documents, the learned Magistrate acquitted the accused for the alleged offence. 7. Being aggrieved by the said judgment of acquittal, the appellant has filed the present appeal challenging the acquittal order of the learned Magistrate. 8. I have heard the learned counsel for the appellant and the respondent. 9. The main contention of the learned counsel for the appellant is that the Trial Court has utterly failed to see and appreciate the fact that the accused has admitted the signature on the cheque Ex.P1 and that the Trial Court has not considered the legal presumption of Section 139 of the N.I. Act and accordingly, the learned counsel for the appellant contends that once the cheque has been admitted by the accused, it shall be presumed that the cheque is issued for discharge in whole or in part of any debt or other liability and he further contends that even as per Section 118 of the N.I. Act, there is a presumption that every instrument was made for consideration, once it has been accepted and endorsed, until the contrary is proved. So therefore, the learned counsel contends that the Trial Court has failed to appreciate the legal presumption in favour of the complainant and has erroneously held that the complainant is unable to prove the issue of legally recoverable debt beyond reasonable doubt. 10. The learned counsel for the appellant has taken me through the Exs.P-1 to P-8 and contended that Exs.P-6, 7, 8 and 9 are the documents to show that he has obtained loan from his father, friend, brother and from Co-operative Society and from that source along with the other sum of Rs.6,00,000/- which he had kept at his home, he has paid a sum of Rs.14,00,000/- at one stretch to the accused. 11. The learned counsel further contends that once there is a presumption under Section 139 of the N.I. Act and on admission and acceptance of the cheque by the accused, the burden shifts to the accused to disprove the case of the complainant that the said cheque was not issued for a legally recoverable debt or that there was no transaction between the accused and the complainant. Further the learned counsel for the complainant contends that he has got examined P.W.4, who has given a loan of Rs.3,00,000/- to him vide Ex.P-9 and he has also examined the said witness who has deposed in favour of the complainant to establish the fact that Rs.3,00,000/- loan was taken by the complainant from P.W.4 in order to pay to the accused. On these grounds and submissions, the learned counsel for the complainant sought for setting aside the order of acquittal of the accused. 12. Per contra, learned counsel for the respondent accused contends that even according to the complainant, he has stated in his complaint that he came to know of the accused through his father and the accused has no business relationship or transaction with the complainant though he admits that he has some transaction with the father of the complainant earlier. 13. The learned counsel further contends that the complaint filed by the complainant is vague, as he has not specifically mentioned as to when he has handed over the loan amount to the accused. The learned counsel further contends that the alleged loan given by the complainant is in December 2006 and the date of cheque is on 03.04.2007 Ex.P1. Whereas, the accused had closed the account in the year 2005 for which the accused has produced Ex.D-1 which shows that the account of the accused has been closed on 05.12.2005. 14. Learned counsel for the accused further contends that he had closed his cotton business in the year 2005 and also his hotel 'Samadhan' in the year 2007. Therefore, the question of obtaining any loan from the complainant for business is a figment of imagination and is not correct set of facts. 15. Learned counsel for the accused also contends that the theory of the complainant of having lent loan to the accused of Rs.14,00,000/- is far from imagination and cannot be believed for the reason that the complainant has not got executed any written document or agreement for having lent such a huge amount and therefore, the theory putforth by the complainant with regard to loan is not believable. The learned counsel for the accused further contends that in the absence of there being any proper genuine admitted transaction and there not being any legally recoverable debt, the Trial Court is right in coming to a conclusion that the complainant has not established the factum of legally recoverable debt and hence, the order of acquittal is justified. 16. On perusal of the judgment of the learned Magistrate, it is noticed that the oral evidence of P.Ws.1 to 4 and on appreciating the evidence of D.W.1 and on perusal of Exs.P-1 to P- 8 has come to the conclusion that the complainant has not produced any loan related documents to substantiate the contention of having taken loan from Urban Cooperative Bank and has neither examined any officials from the Society or Cooperative Bank to prove that he has borrowed the loan of Rs.4,00,000/- and Rs.1,65,000/-. Further the learned Trial Judge has come to a conclusion that the amount of loan that has been received by the complainant from his brothers in order to give the loan to the accused, no material has been produced to substantiate the same and that it is hard for an ordinary prudent man to believe that a huge sum of Rs.14,00,000/- alleged to have been paid to the accused without obtaining any document and without charging any interest. 17. It is to be noted that there is a clear presumption under Section 139 of the N.I. Act that the cheque was drawn for discharge in full or in part of any debt or liability as the said presumption does not relate to the existence of legally enforceable debt or liability. Therefore, before drawing the presumption under Section 139 of the N.I. Act, it is the duty of the Court to see whether or not the complainant has discharged his initial burden as to existence of legally enforceable debt. 18. No doubt as per Section 118 of the N.I. Act, there is a rebuttable presumption that every negotiable instruments made or drawn is for a consideration and such instrument when accepted, it shall presumed that it is accepted for consideration. Accordingly, as per clause (b) of Section 118 there is a presumption that every negotiable instrument bearing a date was made or drawn on such a date. 19. Accordingly, as per clause (b) of Section 118 there is a presumption that every negotiable instrument bearing a date was made or drawn on such a date. 19. In the present case on hand, though the accused has admitted the signature of cheque and that it belongs to him, but has denied the transaction of there being any legally recoverable debt and any consideration was paid by virtue of the said cheque Ex.P1. On going through the oral evidence and documents produced by the complainant, it is the case of the complainant that he has borrowed loan from his friend, father, brother and Bank/Society to pay to the accused of a sum of Rs.14,00,000/- which he has paid at one stretch. Though the complainant has produced Exs.P-1 to P-8 and got marked Ex.P-9 through P.W.4, there is no document produced by the complainant to show that he has parted with the amount to the accused. It is also trite law that when a person is paying huge amount of Rs.14,00,000/- to a person whom he is not very well acquainted with, he would pay the said amount without there being any corroborative or supportive document or agreement. Therefore, it is hard to believe that the complainant has parted with the huge amount of Rs.14,00,000/- without there being any supportive document or witness to the said parting of the amount. It is also relevant to note here that when the accused raises the plea that there is no transaction and he does not know the accused and places material for closure of the account, the onus shifts on the complainant to prove that he had parted with the amount as loan to the accused and that he had the financial capacity and a legally recoverable debt. 20. It is also to be noted that the complainant has not clearly and specifically stated with regard to the date of payment of the alleged loan to the accused either in his complaint or in his evidence, it is also hard to believe that after giving such a huge amount to a person, who is not so very close and the complainant being a businessman that he would part with such a huge amount without charging any interest. All these facts raise a doubt in the mind of this Court as to whether such a transaction has existed or happened. 21. All these facts raise a doubt in the mind of this Court as to whether such a transaction has existed or happened. 21. The learned counsel for the appellant has relied on the following judgments: i) K.N.Beena v. Muniyappan and another reported in 2001 (7) Supreme 810 . ii) Krishna Janardhan Bhat v. Dattatraya G. Hegde reported in 2008 (1) Supreme 306 . iii) Rangappa v. Sri Mohan reported in (2010) 11 SCC 441 . 22. The learned counsel for the accused has also relied the following judgments: i) K.Subramani v. K.Damodara Naidu reported in (2015) 1 SCC 99 . ii) Basalingappa v. Mudibasappa reported in 2019 (3) KCCR 2473 . iii) Shiva Murthy v. Amruthraj reported in ILR 2008 Kar 4629. 23. The sum and substance of these judgments of the Honble Apex Court is that there is a presumption under Section 139 of the N.I. Act which includes a presumption of existing legally enforceable debt or liability. However, such a presumption is rebuttable in nature and once the presumption is rebutted by the accused, the onus shifts on the complainant to prove his case. In the case of Basalingappa v. Mudibasappa , it is held that though the signature has been admitted, a presumption shall be raised under Section 139 of the N.I. Act that the cheque was issued in discharge of a legal debt or liability. What has to be seen is if the said presumption is rebutted by way of a probable defence raised by the accused. In my opinion on perusal of the entire evidence and the material documents, it is seen that the accused has raised a probable defence and the burden has shifted to the complainant to prove his financial capacity and the issue of there being any legally recoverable debt. 24. Further the Trial Court has rightly come to a conclusion that the complainant version of parting huge amount of Rs.14,00,000/- without there being any other materials to support and having not proved in the evidence that he had the source of income to pay to the accused, is fatal and also failed to prove that there is any legally recoverable debt to the accused. 25. Therefore, another aspect which canvassed by the learned counsel for the accused is that the complainant after having lent an amount of Rs.14,00,000/- has not charged any interest. 25. Therefore, another aspect which canvassed by the learned counsel for the accused is that the complainant after having lent an amount of Rs.14,00,000/- has not charged any interest. No prudent man in my considered view can believe that a person who is doing business would part with such huge amount without charging any interest. 26. Having regard to the evidence on record and having gone through the documents, I am of the considered view the complainant has not established nor proved legally enforceable debt and the statutory presumption which was in favour of the complainant has been duly rebutted by probable defence by the accused. 27. Therefore, in the light of the discussions made above, I hold the complainant has utterly failed to prove the existence of legally enforceable debt against the accused and the order of acquittal passed by the learned Magistrate does not call for any interference and the same is affirmed. Accordingly, this appeal is dismissed.