Dismissed

Dr. Anandbabu S/O G. Narayanaswami, v. M/S S.C. Naregal

Karnataka HC12 Jun 2019CRL.RP/100017/2017

Case brief

AI extract

What is this about?

A criminal revision petitioner challenging a conviction under Section 138 of the Negotiable Instruments Act. The High Court upheld the lower courts' findings, holding that admitted signature and business context created a valid presumption of debt discharge, and dismissal of the case against a proprietor was unjustified.

What did the court decide?

The Criminal Revision Petition is dismissed and the original conviction and sentence are confirmed.

Dr. Anandbabu S/O G. Narayanaswami, Vs M/S S.C. Naregal — Cheque Dishonour | Karnataka HC (2019)

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IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH

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DATED THIS THE 12^TH DAY OF JUNE 2019

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BEFORE

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THE HON’BLE MR.JUSTICE B.A.PATIL

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CRIMINAL REVISION PETITION NO.100017 OF 2017

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BETWEEN

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DR. ANANDBABU S/O G. NARAYANASWAMI, AGE 55 YEARS, OCC: BUSINESS/PROPRIETOR, M/S.RAMANANDA GAS AGENCY AND RAMANAND ROAD LINES, R/O: PLOT NO.168, HPC GAS PLANT ROAD, BELUR INDUSTRIAL AREA, DHARWAD. ...PETITIONER

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(BY SMT. SUMANGALA A. CHAKALABBI, ADVOCATE)

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AND M/S S.C. NAREGAL, R/BY ITS PARTNER, NEELAKANT S/O SHIVALINGAPA NAREGAL, AGE: 72 YEARS, OCC: BPC DEALER, S.S. BASAVANAL ROAD, FORT AREA, DHARWAD. ...RESPONDENT

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(BY SRI. M.B. GUNDAWADE, ADVOCATE)

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THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 READ WITH 401 OF CR.P.C., SEEKING TO SET ASIDE THE JUDGMENT AND ORDER

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DATED 25.10.2016 PASSED BY THE HON'BLE IV ADDL. DISTRICT AND SESSIONS DHARWAD, IN CRIMINAL APPEAL NO. 50 OF 2016 CONFIRMING JUDGMENT OF CONVICTION AND ORDER OF SENTENCE DATED 2.3.2016 PASSED BY THE HON'BLE PRINCIPAL CIVIL JUDGE AND PRINCIPAL JMFC, DHARWAD IN CRIMINAL CASE NO. 189 OF 2010 AND ALLOW THE PRESENT REVISION PETITION AND ACQUIT THE PETITIONER/ACCUSED.

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THIS CRIMINAL REVISION PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The present revision petition has been field by the petitioner/accused challenging the judgment passed by the IV Additional District and Sessions Judge at Dharwad in Crl.A. No.50/2016 dated 25.10.2016 whereby the judgment of conviction and order of sentence passed by the Principal Civil Judge and Principal Judicial Magistrate First Class, Dharwad, in C.C. No.189/2010 dated 02.03.2016 was confirmed by dismissing the appeal.

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I have heard learned counsel for the

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petitioner/accused and the learned counsel for the respondent-complainant.

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It is the case of the complainant that the complainant-firm is a partnership firm and it is represented by N.S.Naregal and the accused is the proprietor of Ramanand Gas Agency and Ramananda Road Lines. Accused is a regular customer of the complainant firm and he used to purchase HSD Oil since 2002-03 on credit basis. Accounts were maintained in the name of M/s. NWKRTC bus business since 2004-05 and as such he opened another account in the name of M/s. Ramanand Road lines. By making use of credit facility, the accused-company used to make payment. As on 15.10.2007, the balance was to the tune of Rs.30,70,441/-. In spite of requests made by the complainant, the accused postponed the same and did not pay the said arrears. It is further urged that the

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accused issued a cheque, dated 07.08.2009, for a sum of Rs.4,70,000/- towards part payment of the said dues and he also issued another cheque, dated 22.08.2009, for a sum of Rs.3,69,036/-. When the complainant presented both the cheques, they were returned with an endorsement “Exceeds Arrangement”. The same was informed to the accused. A notice was also issued in this behalf. The accused again requested to present the cheque for Rs.3,69,036/-. It also returned with the same endorsement. Therefore, a complaint was registered for the offence punishable under Section 138 of the Negotiable Instrument Act.

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Thereafter the Court below took the

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cognizance and accused appeared before the Court. The parties led their evidence. After hearing both the parties, the Court below came to the conclusion that the complainant proved his case and the accused committed the offence punishable under Section 138 of

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the Negotiable Instruments Act and convicted and sentenced him to undergo simple imprisonment for a period of one year and to pay fine of Rs.8,50,000/-, out of which a sum of Rs.8,39,036/- should go to the complainant. Challenging the same, an appeal was filed and the said appeal was also dismissed.

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It is the submission of the learned counsel

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for the petitioner/accused that said two cheques were given as security for the diesel purchased by him to his vehicles, but the same has been misused by the Complainant, and that the Court below without considering the facts and circumstances has erroneously passed the said order. It is his further contention that the complainant, who came to be examined, was not having any knowledge about the transactions and the said fact has been admitted during the course of cross-examination of P.W.1 under such circumstances, the complaint for the offence under

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Section 138 of the N.I. Act did not survive for consideration and it ought to have been dismissed. It is his further contention that the said business is done under the proprietary concern of Ramanand Road Lines and Ramanand Gas Agency and the said proprietary concerns have not been made as a party to the proceedings and as such the complaint ought to have been dismissed by the Trial Court. It is his further contention that the petitioner/accused has not committed any offence; only on surmises and presumption, the Courts below have committed an error in convicting the petitioner. On these grounds, he prayed to allow the petition and to set aside the impugned orders of the Courts below.

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Per contra, learned counsel appearing for the respondent-complainant vehemently argued and submitted that the petitioner/accused was having a business dealing and the amount was due and the

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accused issued a cheque; when the cheque was presented for encashment the same was dishonoured with an endorsement “Exceeds Arrangement”; in spite of issuance of legal notice, the accused did not reply to the same and, as such, the complaint was filed. It is his further submission that during the course of evidence, D.W.1 has admitted the transaction and the amount due; D.W.1 has admitted the issuance of the cheque and the signature thereon in Exs.P.2 and P.5. It is his further submission that when once the accused admits his signature on the cheque, a presumption has to be drawn and the burden shifts on the petitioner/accused to rebut the said presumption, and if the presumption raised is not rebutted, the case of the complainant stands proved and the petitioner/accused will be liable to be convicted. It is his further submission that both the Courts below have considered the said facts and circumstances and have come to a right conclusion; there is no illegality or irregularity committed by the

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Courts below so as to interfere with the impugned orders. On these ground, he prayed to dismiss the petition.

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I have carefully and cautiously considered

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the submissions made by the learned counsel appearing for the parties and perused the records.

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It is the specific case of the complainant that the petitioner/accused has availed credit facility and an amount of Rs.8,39,036/- was due to the complainant; as a part payment, the accused issued two cheques viz., Exs.P.2 and P.5. As could be seen from the evidence of D.W.1, he has taken up the defence that the said cheques have been given as a security and not for discharge of the debts or dues to the complainantcompany, but as could be seen from the records, he admits the signature on Exs.P.2 and P.5. It is well settled proposition of law that if the accused admits the signature on the cheque, the Court has to draw a

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presumption under Sections 139 and 118 of the Negotiable Instruments Act, the said cheque has been issued for discharging the debt. It is well settled proposition of law laid down by the Hon’ble Apex Court that when once a presumption is drawn, the burden shifts upon the accused to rebut the said presumption by preponderance of probabilities. Though it is the contention of the petitioner/accused that the said cheques were issued in the year 2004 as a security. Even during the course of cross-examination, he admits that the said cheques have been issued for the business transaction. This itself clearly goes to show that the said cheques have been issued in discharge of the amount which was due. Now, under the said facts and circumstances, it does not lie in the mouth of the petitioner/accused that the said cheque has been issued as a security and not for discharge of a debt or liability.

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In the light of the discussion held by me, the

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contention taken up by the learned counsel for the petitioner in this behalf has no force, the same is liable to be rejected and accordingly it is rejected.

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The second contention is that the

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complainant was not having any knowledge about transaction and as such the complaint is liable to be dismissed. But, as could be seen from the evidence of P.W.1, it clearly goes to show that he was having knowledge about the said transaction and he has deposed in this behalf. Be that as it may. Even, the evidence of D.W.1 clearly goes to show that there existed business transaction of diesel oil which used to be purchased by the accused to his lorries and in that light, the accused cannot contend that there was no knowledge and he was not having any knowledge. In that regard also, the contention of the

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petitioner/accused does not survive for consideration.

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The last contention that has been taken up

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by the learned counsel for the petitioner/accused is that the proprietor of the concern has not been made a party to the proceedings. I am conscious of the said fact. As per sub-section (1) of Section 141 of the Negotiable Instruments Act, when an offence has been committed by a company the company has to be made as a party and the legal entity is liable for prosecution. As per Section 141 sub-section (2) of the Act, which is a nonobstante clause, it says where any offence under this Act, has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished in accordance with law. That is the wider scope given to a company. But, admittedly , the

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contention of the petitioner/accused is it is a

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proprietary concerned that under such circumstances, the legal effect will be not so strong as that of the company. Under the facts and circumstances, that contention taken up by the petitioner/accused in this behalf also does not survive for consideration.

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Even though several other contentions have been raised by the learned counsel for the petitioner/accused, the petitioner has failed to

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substantiate the said fact without any cogent material. Under the said facts and circumstances, I feel that the petitioner has not made out any good grounds to entertain the petition and the same is liable to be dismissed.

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I have carefully and cautiously gone through the judgment of the first Appellate Court as well as the Trial Court. After considering the facts and

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circumstances of the case and the submission made by

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the petitioner/accused and by drawing presumption, both the Courts have come to a right conclusion. There is no perversity or illegality in passing such orders. The same are liable to be confirmed. In that light, the petition is devoid of merits and it is dismissed accordingly.

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Sd/JUDGE

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Kms

Dr. Anandbabu S/O G. Narayanaswami, v. M/S S.C. Naregal

Case brief

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Dr. Anandbabu S/O G. Narayanaswami, v. M/S S.C. Naregal

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