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2022 DIGILAW 595 (KAR)

K. P. Prakash v. K. Prasanna Kumar

2022-05-05

S.RACHAIAH

body2022
JUDGMENT : S. Rachaiah, J. 1. This appeal is filed by the complainant/appellant against the impugned judgment and order of acquittal passed in C.C.No.27327/2007 dtd. 27/8/2011 passed by the learned XXII ACMM and XXIV ASCJ, Bangalore, wherein the trial Court acquitted the accused/respondent for the offence under sec. 138 of N.I. Act. 2. Brief facts of the case are as under:- It is the case of the appellant/complainant that the respondent/accused had borrowed a sum of Rs.4.00 lakhs in the first week of December 2006, promising to repay the same within six months. The Respondent borrowed the loan from the Appellant to extend the class building of the school and to purchase furniture. In lieu of having received the amount from the Appellant, the Respondent has issued a cheque bearing No.232856 dtd. 25/6/2007 for a sum of Rs.4.00 lakhs drawn on Central Bank of India, Kathriguppe, Bengaluru. 3. When the Appellant presented the said cheque through his banker on 5/7/2007, he received a message from the Bank that the cheque had been dishonored, with a shara as "funds insufficient ". The Appellant had issued a legal notice on 3/8/2007 both by RPAD and UCOP. Despite the service of notice, the respondent neither replied nor paid the cheque amount. Hence, the appellant/complainant has lodged the complaint before the trial Court. 4. The trial Court recorded the sworn statement of the Appellant and registered the case as Criminal Case No.27327/2007. After that, the Respondent appeared before the Court on 29/5/2010 and executed the bail bond. The trial Court recorded the Respondent's plea in the open Court and explained to him in the language known to him. The Respondent denied the plea and claimed to be tried. 5. To prove the case, the appellant/complainant had examined himself as PW.1 and also got examined one more witness as PW.2. He got marked Ex.P1 to Ex.P11. On the other hand, the respondent / accused has examined himself as DW.1, but no documents were marked through him. 6. Heard the learned counsel for the parties. 7. Smt.P.V.Kalpana, learned Amicus Curiae appearing for the Appellant, has vehemently contended that the Respondent has issued a cheque in lieu of the amount borrowed from the complainant/Appellant. The cheque, the signature, and the correction made have been admitted by him during the cross-examination. The trial Court committed an error in not raising the presumption as envisaged under sec. 7. Smt.P.V.Kalpana, learned Amicus Curiae appearing for the Appellant, has vehemently contended that the Respondent has issued a cheque in lieu of the amount borrowed from the complainant/Appellant. The cheque, the signature, and the correction made have been admitted by him during the cross-examination. The trial Court committed an error in not raising the presumption as envisaged under sec. 139 of Negotiable Instruments Act (hereinafter referred to as "N.I. Act "). 8. Learned Amicus Curiae further contended that even though the Respondent denied the transaction with the Appellant, that itself would not be sufficient to rebut the presumption as to how the signed cheque had reached the Appellant. The Respondent contended that he had borrowed a sum of Rs.50,000.00 from the mother-in-law of the Appellant, and he has cleared the amount. In spite of having cleared the amount which he has borrowed from the mother-in-law of the Appellant, it has been misused by the complainant. The cheque in question had been issued for security. The mere allegation about the transaction would not be sufficient to rebut the presumption. Hence, the Respondent is entitled to repay the amount mentioned in Ex.P1 -cheque. As such, learned Amicus Curiae sought to allow the appeal. Learned Amicus Curiae relied on the judgment of the Hon 'ble Supreme Court in the case of ROHIT BHAI JIVANLAL PATEL VS. STATE OF GUJARAT and ANOTHER, reported in AIR 2019 SC 1876 . 9. Per contra, Sri.Leeladhar H.P., learned counsel for the Respondent, submits that the cheque in question had been issued as collateral security to the mother-in-law of the Appellant. The mother-in-law of the Appellant died after the Respondent cleared the loan amount which he had borrowed from her. The cheque had not been returned to the Respondent since she died. Taking advantage of the death of the mother-in-law, the Appellant has filled the cheque for Rs.4.00 lakhs and filed a complaint which the Respondent does not admit. The Respondent has not made any transaction with the Appellant herein and the question of liability to repay the cheque amount would not arise at all at any point of time. Hence, learned counsel for the Respondent sought to dismiss the appeal filed by the Appellant. 10. The Respondent has not made any transaction with the Appellant herein and the question of liability to repay the cheque amount would not arise at all at any point of time. Hence, learned counsel for the Respondent sought to dismiss the appeal filed by the Appellant. 10. After having considered the rival contention of the learned counsel for respective parties and after having perused the oral and documentary evidence on record, the questions which would arise for my consideration are:- (i) Whether the trial Court is justified in acquitting the respondent / accused for the offence punishable under sec. 138 of N.I. Act? (ii) Whether the appellant/complainant has made out the ground to interfere with the impugned judgment of acquittal? 11. The Appellant's case is that, he knows the Respondent as he used to come to the house of his mother-in-law - Gowramma. With the said acquaintance, the Respondent requested the Appellant to lend him a sum of Rs.4.00 lakhs for the development of the school building and also for purchase of furniture. The Appellant, though he had no sufficient money as on that day, borrowed from his co-brother - PW.2 and handed over the amount to the Respondent. The Respondent in lieu of the said financial transaction, as a token of security, issued a cheque for a sum of Rs.4.00 lakhs to the Appellant. 12. The Respondent took a defence that he has not borrowed the amount from the Appellant at any point of time and he has received the amount from the mother-in-law of the Appellant namely Smt.Gowramma, in a sum of Rs.50,000.00 only, and he further admits that he had issued a signed blank cheque as collateral security. The said cheque, after the death of Smt.Gowramma, has been misused by the Appellant and he demanded the Respondent pay the amount, which the Respondent is not liable to repay. 13. The Appellant, during the cross-examination, has admitted that he had stopped financial transactions after the death of his mother-in-law. However, he has admitted that the Respondent was doing the financial transaction with his mother-in-law. The Respondent, when specifically has raised the question regarding the financial capacity of the Appellant to lend such a huge amount to him, the burden of proving the same would be shifted to the Appellant. However, he has admitted that the Respondent was doing the financial transaction with his mother-in-law. The Respondent, when specifically has raised the question regarding the financial capacity of the Appellant to lend such a huge amount to him, the burden of proving the same would be shifted to the Appellant. In this case, though the complainant/Appellant had stated before the Court that he had lent a sum of Rs.4.00 lakhs to the Respondent and got examined PW.2, who is none other than the co-brother of the Appellant, the financial capacity to lend such a huge amount creates doubt after having perused the oral and documentary evidence. P.W.2 had stated before the Court that he was working as a Welder in NGEF and got voluntary retirement on 18/6/2002. Towards the benefit of voluntary retirement from the employment, a sum of Rs.3,89,634.00 had been received by him from the Company. Admittedly, the loan transaction took place in the year 2006. However, he had received the voluntary retirement benefit in the year 2002. Ex.P10, which is the document that shows the financial transaction of PW.2, that on 26/6/2002, 27/6/2002, 28/6/2002, and 2/7/2002, the amount has been debited in three different transactions. Therefore, the contention of PW.1 regarding the source of income which he has borrowed from PW.2 to lend the amount to the Respondent in the year 2006 is doubtful and not tenable. 14. The offence punishable under sec. 138 of N.I. Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the offence. (1) drawing of the cheque, (2) presentation of cheque to the bank, (3) returning the cheque unpaid by the drawee Bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the dishonoured cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice. Sec. 139 of the N.I. Act says, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in sec. 138 for the discharge, in whole or in part, of any debt or other liability. 15. The Respondent, who deposed as DW.1, has stated that he had a money transaction with Smt.Gowramma for 12 years. In the year 2006, he received Rs.50,000.00 and has issued the cheque as security. 138 for the discharge, in whole or in part, of any debt or other liability. 15. The Respondent, who deposed as DW.1, has stated that he had a money transaction with Smt.Gowramma for 12 years. In the year 2006, he received Rs.50,000.00 and has issued the cheque as security. 16. On perusal of Ex.P1 - cheque, which indicates that there are two signatures found on it. The Respondent has denied the signature affixed in the amount corrected. No effort has been made to prove the signature of the Respondent. The Appellant admitted that the Respondent had a money transaction with his mother -in -law and his mother - in - law has died. A specific question was put to the Appellant during cross-examination that he had no financial capacity to lend such a huge amount; it was the Appellant who had to discharge the initial burden. In this case, PW.1 has examined his co -brother - PW.2 and tried to convince the Court about the financial capacity to give the loan to the Respondent, which created doubt. The Appellant has failed to establish the monetary transaction with the Respondent and was unable to discharge the initial burden to raise the presumption as envisaged under sec. 139 of N.I. Act. On the other hand, the Respondent has established the fact of money transaction with the mother -in -law of the Appellant through admissions in the cross -examination. Such being the fact, the contention of the Respondent about issuance of the cheque as collateral security to Smt.Gowramma, who is none other than the mother -in -law of the Appellant, cannot be denied. 17. In view of the observations made above, I answer the points which arose for consideration. Point No.1 is answered in 'Affirmative', by holding that the trial Court is justified in acquitting the accused for the offence punishable under sec. 138 of N.I. Act. Point No.2 is answered in the 'Negative,' by holding that the Appellant has not made out grounds to interfere in the order of acquittal passed by the trial Court. 18. With the above observations, I pass the following:- ORDER (i) The appeal filed by the appellant/complainant is dismissed. (ii) The impugned judgment and order of acquittal passed in C.C.No.27327/2007 dtd. 27/8/2011 passed by the learned XXII ACMM and XXIV ASCJ, Bengaluru is hereby confirmed. 18. With the above observations, I pass the following:- ORDER (i) The appeal filed by the appellant/complainant is dismissed. (ii) The impugned judgment and order of acquittal passed in C.C.No.27327/2007 dtd. 27/8/2011 passed by the learned XXII ACMM and XXIV ASCJ, Bengaluru is hereby confirmed. (iii) Registry is directed to transmit the records to the trial Court, if necessary. (iv) This Court placed appreciation on record for the service rendered by the learned Amicus Curiae Smt. P.V. Kalpana and direct the Legal Services Authority to pay a sum of Rs.5,000.00 (Rupees Five Thousand only) as honorarium.