Allowed

Smt. Leelavathi v. Smt. Adilakshmi

Karnataka HC16 Nov 2018CRL.A/1243/2015

Case brief

AI extract

What is this about?

This criminal appeal challenges the acquittal of an employee working at Karnataka State Financial Corporation for cheating. The High Court held that the accused issued four cheques to repay a loan. The Court found the lower court erred in acquitting the accused despite the statutory presumption under Section 139 of the Negotiable Instruments Act and the improbability of the accused's explanation r

What did the court decide?

The appellant was held guilty of the offence under Section 138 of the Negotiable Instruments Act. A fine of Rs.14,00,000/- was imposed.

Smt. Leelavathi Vs Smt. Adilakshmi — Cheque Dishonour | Karnataka HC (2018)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^TH DAY OF NOVEMBER, 2020

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BEFORE

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THE HON’BLE MR. JUSTICE N.K.SUDHINDRARAO

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CRIMINAL APPEAL No.1243/2015

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BETWEEN:

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SMT.LEELAVATHI, W/O.GOPALA, AGED ABOUT 53 YEARS, R/AT NO.47, 1^ST FLOOR, 3^RD CROSS, BRINDAVAN NAGAR, SBM COLONY, MATHIKERE, BANGALORE-560 054. OCCUPATION: SARI BUSINESS.

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..APPELLANT

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(BY SRI.DINESH KUMAR K. RAO, ADVOCATE)

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AND :

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SMT.ADILAKSHMI, W/O.SUBBARAYUDU, AGED ABOUT 49 YEARS, R/AT NO.29, 8^TH MAIN, 10^TH CROSS, SBM COLONY, BRINDAVAN NAGAR, MATHIKERE, BANGALORE-560 054.

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WORKING AT:

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KARNATAKA STATE FINANCIAL CORPORATION, KSFC BHAVANA,

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NO.1/1, THIMMAIAH ROAD, NEAR CANTONMENT RAILWAY STATION, BANGALORE-560 052.

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..RESPONDENT

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(BY SRI.SURESH.D.DESHPANDE, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C. BY THE ADVOCATE FOR THE APPELLANT PRAYING TO SET ASIDE THE JUDGMENT DATED 12.11.2014 PASSED BY THE XVIII ADDL. C.M.M., BENGALURU IN C.C.NO.6925/2013-ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT.

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THIS CRIMINAL APPEAL COMING ON FOR ADMISSION, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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With the consent of the learned counsel

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appearing for the parties, appeal is taken up for final disposal.

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Appeal is directed against the Judgment dated 12.11.2014 passed in C.C.No.6925/2013 by the XVIII Additional CMM, Bengaluru, wherein accused came to be acquitted for the offence punishable under Section 138 of Negotiable Instruments Act. Being aggrieved

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by the said Judgment complainant has come in appeal questioning the Judgment of acquittal.

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In order to avoid confusion and overlapping

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parties are referred in accordance with their ranks as

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held by them before the trial court.

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Complaint was filed on 21.01.2013 against the accused for the offence punishable under Section 138 of the Negotiable Instruments Act. Complainant claims that she is a resident of Bengaluru doing saree business selling them on installment basis by going door to door for the past more than 25 years as on the date of complaint. The accused is working at KSFC and known to the complainant for the past several years as on the date of complaint. The accused approached the complainant and sought for financial accommodation by way of hand loan of

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Rs.10,50,000/-. Complainant lent the amount on

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various dates as under:

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04.01.2011 – Rs.50,000/- Cheque bearing No.697333 dated:30.11.2012

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07.02.2011 – Rs.1,00,000/- Cheque bearing No.540364 dated:03.12.2012

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25.02.2011 – Rs.4,50,000/- Cheque bearing No.592999 dated:05.11.2012

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06.03.2011 – Rs.4,50,000/- Cheque bearing No.697322 dated:20.11.2012

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It is also stated that the accused had assured to

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get a site and promised that she would get a site within stipulated period.

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Inspite of continuous demand by the

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complainant for repayment of the amount the accused did not respond in either way. Meanwhile the accused got allotted a site and the registered sale deed was executed in her favour from KSFC Employees Building Co-operative Society, Mysuru.

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Thereafter complainant claims to have

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demanded with the accused to register the sale deed of the said site which is situated at Hanchaya Village, Mysuru. The accused failed to agree with the promise and after prolonged demand issued four cheques drawn on Canara Bank, KSFC Bank, Bengaluru.

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When the cheques were presented by complainant they were returned unpaid on 07.12.2012 with endorsement “Funds Insufficient”. A legal notice was issued on 24.12.2012 from the side of the complainant demanding payment of the said amount. She took up a plea that one Govindamma intended to borrow loan and start a home industry. For borrowing the said loan accused contended to have deposited eight blank signed cheques as security since she is a Government Servant. The complainant and the aforesaid Govindamma came to the house of accused

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and obtained cheques. Accused claimed to have given those cheques in favour of Govindamma to borrow loan from the Society. It is further alleged the complainant had failed to arrange loan in favour of Govindamma from the Society but she failed to return the cheques obtained from the accused and has misused the same by handing over them to complainant.

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The learned trial Judge was accommodated with the oral evidence of complainant-Leelavati as PW-1 and documentary evidence as under:

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Ex.P-1 to P-4 –Four cheques Ex.P-1(a) to 4(a) – Signatures of the accused Ex.P-5 to P-12 – 8 Bank endorsements Ex.P-13 – Office copy of demand notice Ex.P-14 & P-15 – 2 postal receipts Ex.P-16 & P-17 – 2 courier receipts Ex.P-18 – Postal Acknowledgement Ex.P-19 & P-20 – 2 Postal covers

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Accused examined herself as DW-1 and got marked Ex.D-1- Reply notice Ex.D-2-Postal acknowledgement

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Learned counsel for appellant-complainant Sri.Dinesh Kumar K.Rao, submits that the ingredients of offence punishable under Section 138 of the Negotiable Instruments Act are fully existing in the case and submits that the accused has committed offence under Section 138 of Negotiable Instruments Act.

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Signature is not an issue, the defence is not revival. Further having concluded regarding the issuance of cheques and there is no reliability regarding the cheques what was arranged was to enable one Govindamma to borrow loan. It is further submitted that complainant is doing saree business selling them door to door and same is by way of installment. It is in that fashion complainant earned money and arranged the same. It is also stated that accused had promised 2% interest.

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Learned counsel for respondent-accused

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Sri.Suresh D. Deshpande would submit that reading of the complaint itself shows that the accused has been victimized by the complainant through misuse and abuse of cheques that were never intended to have been issued by the accused to the complainant towards repayment of amount of Rs.10,50,000/-. He would further submit that complainant had no source. On the other hand the accused had no deficiency for financial infrastructure. She works in Government Department getting salary of Rs.50,000/- per month.

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The complainant submitted that she had not taken separate document regarding liability nor she has any document regarding the source.

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Learned counsel for accused would also submit that the complainant is not an income tax assessee nor has maintained the account for lending a huge

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amount of Rs.10,50,000/-. Section 138 of Negotiable Instruments Act provides that whenever a cheque is issued in discharge of obligation capable of ascertaining in cash and such cheque when it is dishonoured becomes offence provided the payment is not made despite legal formalities by the complainant. The gravity of offence under Negotiable Instruments Act cannot be equated with the offence under provisions of IPC. The provisions is attracted whether a cheque is dishonoured on different count including insufficiency of funds, stopped payment and related. The criminal liability is on the borrower and it’s a pure personal liability that does not devolve on the legal representative. A post dated cheque also deemed to be a valid one. Holder of a negotiable instrument has a presumption and he becomes a holder in due course. Holder in due course is a person who comes into possession of negotiable instrument for

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consideration. In this connection Section 139 of

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Negotiable Instruments Act is as under:

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“139 – Presumption in favour of holder- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.”

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Presumption under Section 139 is different from presumption of facts. Presumption are rules of evidence and do not conflict with presumption of innocence. No doubt initial presumption is there for a negotiable instrument it is not rebuttable.

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In the context and circumstances following points are clear:

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Complainant claims that the accused borrowed an amount of Rs.10,50,000/- and four cheques were

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issued by accused on various dates as stated above to the tune of Rs.10,50,000/-. She did not pay the amount in time or returned it and complainant was demanding and one occasion is pleaded in the complaint that accused got executed a registered sale deed from KSFC Employees House Building Cooperative Society Limited, Mysuru on 25.06.2011. The complainant as she could not get the amount from the accused, insisted the accused to get the registered sale deed of the site in her favour. Admittedly accused is stated to be an employee of KSFC, a Government of Karnataka Undertaking and said site allotted in the capacity of Member of Housing Society. The ingredients established to complete an offence under Section 138 of Negotiable Instruments Act are to be complied in tandum in order to impose criminal liability on the accused.

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The following points are amply clear:

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There are four cheques issued on various dates. Different numbered cheques or filing criminal

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complaint in respect of all the cheques issued from the same person is not a bar. Initial presumption is available to the complainant.

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Presumption is not in respect of existence of legally recoverable debt. The cheques issued belonged to the bank account maintained by the accused in Canara Bank. Signature on the cheques is not disputed. Admission of the signatures does not amount to issuance of cheques for consideration in discharge of obligation unless there are circumstances to show or to indicate the payment of money and the liability of the accused. There is no yardstick to measure the evidence required or minimum number of documents in the case. On the other hand existence

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of circumstances narrated by the complainant

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pleading of nullifying circumstances and instances stated by the accused would determine the case to a considerable extent. It is also to be remembered under any circumstances when a person defends innocence or no liability circumstances narrated by them pave way for claiming that has to be analysed meticulously so also complainant. In the present case the complainant is elicited not to be an income tax assessee. This court is not a forum to punish or to apply the provisions of Income Tax Act to the facts of the case. Another attack by the accused is she had no source. It is not disputed that the complainant sells saree on installment and said business is being carried on for the past 25 years as on the date of filing of the complaint. A prescribed standard of intelligence to a person whether educated or otherwise a Government employee or other employee who gets a monthly

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salary of Rs.50,000/- may be leading his or her life in average considering the present cost of living. At the same time it cannot be concluded that she will not require fund. The contention of no acquaintance cannot be accepted. There is one aspect of criminal jurisprudence that has to be looked into. To a given situation where an occasion arises the person on whom charge or liability is imposed when he is to give

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an explanation or when he volunteers to give explanation the matter assumes significance. Either no explanation is given or when a false explanation is given lands in the area of guilt. In this connection considering a lady working in Government establishment or Government undertaking getting salary of Rs.50,000/- and she claims that she handed over four cheques duly filled in favour of Govindamma for raising loan. Incidentally as could be seen from

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the copy of a cheque it is drawn in favour of Leelavati and not Govindamma.

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It is necessary to mention if the accused in reality wanted to enable cheques drawn to the extent of Rs.10,50,000/- from the account of the accused in what way does it corroborate to borrow.

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On the other hand to what extent the loan was intended to be borrowed from whom whether blank cheques or otherwise are required by the bank and what are the ingredients that constitute Rs.10,50,000/- are the aspects which on the face are not relevant. What is required is explanation offered and volunteered by the accused which is totally improbable.

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Learned trial Judge seriously erred in going through the provisions and in applying legal principles answering no liability on the cheques. The Judgment goes with the presumption that accused is innocent and complainant has played fraud. The discussion on fraud is totally not acceptable. I find the oral evidence and documents including the cheques establish the guilt of the accused beyond reasonable doubt. Learned trial Judge erred in acquitting the accused. Judgment is liable to be set aside. Complaint deserves to be allowed.

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In the result, following:

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ORDER

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Appeal is allowed. Judgment is set aside. Consequently accused –respondent in this case is held guilty for the offence punishable under Section 138 of Negotiable Instruments Act. Accused is directed to pay a fine of Rs.14,00,000/- out of which complainant

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to be given the amount of Rs.13,50,000/- within three months and Rs.50,000/- to be remitted to the State Exchequer. In default of payment of fine accused shall undergo simple imprisonment for one year.

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Send back the copy of the Judgment to the trial court for further formalities in accordance with law.

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Sd/JUDGE

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SBN

Smt. Leelavathi v. Smt. Adilakshmi

Case brief

What is this about?

What did the court decide?

Smt. Leelavathi v. Smt. Adilakshmi

Case brief

What is this about?

What did the court decide?

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