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Telangana High Court · body

2022 DIGILAW 44 (TS)

B. Sunder v. State of AP Rep By Its PP Hyd.

2022-01-28

G.SRIDEVI

body2022
JUDGMENT : 1. The present Criminal Revision Case is filed under Sections 397 and 401 of the Code of Criminal Procedure, 1973 against the judgment, dated 13.09.2007, passed in Crl.A.No.25 of 2006, wherein the learned Additional Metropolitan Sessions Judge, Cyberabad, N.T.R. Nagar, Hyderabad, confirmed the judgment, dated 27.02.2006, passed in C.C.No.1886 of 2005 on the file of the IX Metropolitan Magistrate, Cyberabad, Kukatpally at Miyapur. 2. The facts of the case are as under: 3. The 2nd respondent/complainant filed a private complaint under Section 200 Cr.P.C. against the revision petitioner/accused for the offence punishable under Section 138 of the Negotiable Instruments Act, stating that the revision petitioner/accused borrowed an amount of Rs.1,10,000/- from him on 26.08.1999 and executed a promissory note agreeing to repay the same within one week from the date of demand made by the 2nd respondent/complainant. On repeated demands made by the 2nd respondent/complainant, the revision petitioner/accused issued a cheque bearing No.164596, dated 05.07.2002 for Rs.1,81,400/.- drawn on State Bank of Hyderabad, Ramachandrapuram towards repayment of the said debt and when the same was presented by the 2nd respondent/complainant in his bank i.e. Global Trust Bank, Chandanagar Branch, for realization, the same was returned with an endorsement ‘Account Closed’. Therefore, the 2nd respondent/complainant got issued a notice, which was not honoured by the revision petitioner/accused. As such, the 2nd respondent/complainant filed a complaint against the revision petitioner/accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 4. In support of his case, the 2nd respondent/complainant examined himself as PW.1 and got marked Exs.P.1 to P.6, whereas the revision petitioner/accused was examined himself as D.W.1 and got marked Ex.D1 on his behalf. 5. The trial Court, after considering both oral and documentary evidence available on record, found guilt of the revision petitioner/accused for the offence punishable under Section 138 of the Negotiable Instruments Act and accordingly convicted and sentenced him to undergo simple imprisonment for a period of one year and to pay compensation of Rs.2,00,000/- to the 2nd respondent/complainant, within a period of one month from the date of judgment. Aggrieved by the same, the revision petitioner/accused preferred Crl.A.No.25 of 2006 before the Additional Metropolitan Sessions Judge, Cyberabad, Hyderabad. Vide judgment, dated 13.09.2007, the learned Sessions Judge dismissed the appeal confirming the conviction and sentence imposed by the trial Court against the revision petitioner/accused. 6. Aggrieved by the same, the revision petitioner/accused preferred Crl.A.No.25 of 2006 before the Additional Metropolitan Sessions Judge, Cyberabad, Hyderabad. Vide judgment, dated 13.09.2007, the learned Sessions Judge dismissed the appeal confirming the conviction and sentence imposed by the trial Court against the revision petitioner/accused. 6. Heard the learned Counsel appearing on either side and perused the record. 7. Learned Counsel for the revision petitioner/accused would submit that though the 2nd respondent/complainant (P.W.1) admitted in his cross-examination that he was an income tax assessee, he has not shown the alleged transaction amount in his Income Tax Returns during that period and the said aspect has not been considered by both the Courts below; that P.W.1 further admitted in his cross-examination that he has not issued any notice to the revision petitioner/accused demanding repayment of loan; that P.W.1 also admitted that he has withdrawn Rs.30,000/- by depositing the cheque of the revision petitioner/accused on 01.12.2000, which establishes that the 2nd respondent/complainant had misused the cheques for wrongful gain. It is further submitted that the revision petitioner/D.W.1 has admitted in his cross-examination that he had handed over one signed blank cheque and two unsigned blank cheques to the 2nd respondent/complainant as he promised to arrange a loan for him, which clearly proves the contention of the revision petitioner/accused that the 2nd respondent/complainant had misused the cheques by manipulating and fabricating the cheques. In support of his contentions, he relied upon the following judgments:- 1. R.Narender v. Yakamma Keloth or Kalyan, 2021 Law Suit (TS) 818 2. Sanjay Mishra v. Kanishka Kapoor @ Nikki, 2009 Law Suit (Bom.) 603 3. Lyca Finance Ltd. V. State and another,, 2016 Law Suit (Del) 4361 8. Learned Counsel for the 2nd respondent/complainant would submit that as per the evidence of P.W.1 coupled with Exs.P1 to P4, it is evident that the cheque has been issued by the revision petitioner/accused for an amount of Rs.1,81,400/- towards discharge of legally enforceable debt and the said cheque was dishonoured on the ground that the account was closed and thereafter the revision petitioner/accused failed to repay the cheque amount though a notice was issued by the 2nd respondent. He also submits that since it is proved that Ex.P1/cheque has been signed and issued by the revision petitioner/accused to the 2nd respondent/complainant towards discharge of legally enforceable debt, the trial Court has rightly found guilt of the revision petitioner/accused for the offence punishable under Section 138 of the N.I. Act, which was confirmed by the appellate Court. 9. Considering rival contentions and perusing the material available on record, the point that arises for determination is “Whether the cheque under Ex.P1 was issued towards discharge of legally enforceable debt or not”? 10. The case of the 2nd respondent/complainant is that the revision petitioner/accused had borrowed a sum of Rs.1,10,000/- by executing a promissory note, dated 26.08.1999 and in order to discharge the said debt, the revision petitioner/accused had issued the impugned cheque for an amount of Rs.1,81,400/-, which was returned un-paid with an endorsement “account closed” and as such the revision petitioner/ accused has committed an offence punishable under Section 138 of the Negotiable Instruments Act. 11. The case of the revision petitioner/accused is that the 2nd respondent/complainant had taken one signed blank cheque, two unsigned blank cheques and promissory note from him with a promise to arrange a loan for him and thereafter, the 2nd respondent/complainant had misused the cheques. 12. In Dalmia Cement (Bharat) Ltd Vs. Galaxy Traders & Agencies Ltd & Ors., (2001) 6 SCC 463 the Apex court has referred to the object of Section 138 of the N.I. Act. Paragraph 3 of the said decision reads thus: "3. The Act was enacted and Section 138 thereof incorporated with a specified object of making a special provision by incorporating a strict liability so far as the cheque, a negotiable instrument, is concerned. The law relating to negotiable instruments is the law of commercial world legislated to facilitate the activities in trade and commerce making provision of giving sanctity to the instruments of credit which could be deemed to be convertible one into money and easily passable from person to another. In the absence of such instruments, including a cheque, the trade and commerce activities, in the present day world, are likely to be adversely affected as it is impracticable for the trading community to carry on with it the bulk of the currency in force. In the absence of such instruments, including a cheque, the trade and commerce activities, in the present day world, are likely to be adversely affected as it is impracticable for the trading community to carry on with it the bulk of the currency in force. The negotiable instruments are in fact the instruments of credit being convertible on account of legality of being negotiated and are easily passable from one hand to another. To achieve the objectives of the Act, the legislature has, in its wisdom, thought it proper to make such provisions in the Act for conferring such privileges to the mercantile instruments contemplated under it and provide special penalties and procedure in case the obligations under the instruments are not discharged. The laws relating to the Act are, therefore, required to be interpreted in the light of the objects intended to be achieved by it despite there being deviations from the general law and the procedure provided for the redressal of the grievances to the litigants-Efforts to defeat the objectives of law by resorting to innovative measures and methods are to be discouraged, lest it may affect the commercial and mercantile activities in a smooth and healthy manner, ultimately affecting the economy of the Country”. (Emphasis added) 13. In the instant case, a perusal of the material available on record would show that the 2nd respondent/P.W.1 admitted in his cross-examination that he was an Income Tax Assessee, but he did not mention the loan transaction in his income tax returns. In the absence of any corroborative evidence and in view of the admission made by the 2nd respondent/PW1 that he is an Income Tax assessee, the question would be whether non-showing of the amount in his income tax return is sufficient to rebut a presumption that the cheque was not issued in discharge of a debt or liability. 14. An identical issue came up for consideration before the Bombay High Court in Sanjay Mishra v. Ms. Kanishka Kapoor @ Nikki and Anr (supra). Relying upon the decision of the Apex Court in Dalmia Cement (Bharat) Ltd Vs. Galaxy Traders & Agencies Ltd & Ors. (supra), the Bombay High Court held as under:- “That the laws relating to the said Act are required to be interpreted in the light of the object intended to be achieved by it despite there being deviation from general law. Galaxy Traders & Agencies Ltd & Ors. (supra), the Bombay High Court held as under:- “That the laws relating to the said Act are required to be interpreted in the light of the object intended to be achieved by it despite there being deviation from general law. The Apex Court expressed that the object of Section 138 of the said Act was to ensure that commercial and mercantile activities are conducted in smooth and healthy manner. The explanation to Section 138 of the said Act clearly provides that a debt or other liability referred to in section means a legally enforceable debt or other liability. The alleged liability to repay an unaccounted cash amount admittedly not disclosed in the Income Tax Return cannot be a legally recoverable liability. If such liability is held to be a legally recoverable debt, it will render the explanation to Section 138 of the said Act nugatory. It will defeat the very object of Section 138 of the Act of ensuring that the commercial and mercantile activities are conducted in a healthy manner. The provision of Section 138 cannot be resorted to for recovery of an unaccounted amount. A cheque issued in discharge of alleged liability of repaying "unaccounted" cash amount cannot be said to be a cheque issued in discharge of a legally enforceable debt or liability within the meaning of explanation of Section 138 of the said Act. Such an effort to misuse the provision of Section 138 of the said Act has to be discouraged" 15. It is true that merely because the amount advanced is not shown in Income Tax Return, in every case, one cannot jump to the conclusion that the presumption under Section 139 of the N.I. Act stands rebutted. There may be cases where a small amount less than a sum of Rs.20,000/- is advanced in cash by way of loan which may be repayable within few days or within few months and that the complainant may not show the said amount in the Income Tax Return as it is repayable within few days or few months in the same financial year. In such a case, the failure to show the amount in the Income Tax Return may not by itself amount to rebuttal of presumption under Section 139 of N.I. Act. In such a case, the failure to show the amount in the Income Tax Return may not by itself amount to rebuttal of presumption under Section 139 of N.I. Act. But, in the instant case, the amount advanced by the 2nd respondent/complainant to the revision petitioner/accused is a large amount and is not repayable within few months and hence the failure to disclose the said amount in Income Tax Returns or books of accounts of the 2nd respondent/complainant can be sufficient to rebut the presumption under Section 139 of the N.I. Act. In the instant case, as per the evidence of the 2nd respondent/complainant, Ex.P2-pronote was executed by the revision petitioner/accused, on 26.08.1999, for Rs.1,10,000/-, whereas the cheque under Ex.P1 was issued for Rs.1,81,400/-on 05.07.2002. However, the 2nd respondent/complainant has not properly explained under what circumstances, the cheque was issued for Rs.1,81,400/-. That apart, the 2nd respondent/complainant (P.W.1) has admitted in his cross-examination that he has withdrawn Rs.30,000/- by depositing the cheque of the revision petitioner/accused on 01.12.2000, which clearly proves the contention of the revision petitioner/accused that the 2nd respondent/complainant had misused the cheques issued by him for obtaining a bank loan. 16. In view of the judgments referred to above and for the aforesaid reasons, I am of the considered view that the finding recorded by the learned trial Judge that the 2nd respondent/complainant had established that the cheque was issued towards discharge of legally enforceable debt, which was confirmed by the appellate Court, is suffered from illegality and caused miscarriage of justice. Hence, the conviction and sentence imposed against the revision petitioner/ accused for the offence punishable under Section 138 of the N.I. Act is liable to be set aside. 17. Accordingly, the Criminal Revision Case is allowed. The conviction and sentence imposed by the trial Court as confirmed by the appellate Court for the offence punishable under Section 138 of the N.I. Act are hereby set aside and the revision petitioner/accused is acquitted of the said charge. Fine/compensation amount, if any, paid by the revision petitioner/accused shall be refunded to him. The bail bonds of the revision petitioner/accused shall stand cancelled. 18. Miscellaneous petitions, if any, pending shall stand closed.