Allowed

Nagappa S/O Basappa Karavinakoppa, v. Tukaram Narayan Gouda

Karnataka HC7 Dec 2020CRL.A/100025/2015

Case brief

AI extract

What is this about?

High Court allowed the criminal appeal against acquittal in a cheque bounce case. The court held that successive presentation of a cheque is maintainable and the prosecution need not prove financial capacity if the accused fails to rebut the presumption of lawful consideration under Sections 139 and 118 of the Negotiable Instruments Act.

What did the court decide?

Impugned judgment acquitted accouter revoked; accused convicted under Section 138 N.I. Act; fine of Rs. 4,00,000 imposed with possible six months simple imprisonment for default.

Nagappa S/O Basappa Karavinakoppa, Vs Tukaram Narayan Gouda — Cheque Dishonour | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA

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DHARWAD BENCH

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DATED THIS THE 7^TH DAY OF DECEMBER, 2020

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BEFORE

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THE HON’BLE MR.JUSTICE RAVI. V.HOSMANI

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CRIMINAL APPEAL NO.100025/2015

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BETWEEN

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Shri. Nagappa, S/o. Basappa Karavinakoppa, Age. 38 years, Occ: Business and Agriculture, R/o. Mardinaglapur, Tq: Bailhongal, Dt: Belgaum.

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...Appellant

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(By Sri. Santosh B. Rawoot, Advocate)

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AND

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Shri. Tukaram Narayan Gouda, Age: 40 years, Occ: Business, T/o. Neelavani Post : Sambrani, Tq: Haliyal Dist: Uttara Kannada.

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……Respondent (By Sri. M.N. Bikkannanavar, Advocate for Sri. Anand R. Kolli, Advocate)

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This criminal appeal is filed u/s 378 (4) of Cr.P.C. praying to allow the appeal by setting aside the order dated 14.01..2015 passed by the Addl. Judicial Magistrate First Class, Bailhongal, in Crl.Case No.101/2009 for the offence punishable under Sections 138 & 142 of Negotiable Instruments Act.

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This appeal coming on for dictating judgment, this day, the court, delivered the following:

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JUDGMENT

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Challenging the judgment dated 14.01.2015 passed by the Judicial Magistrate First Class, Bailhongal in C.C.No.101/2009 thereby acquitting the accused for the offences punishable under Section 138 Negotiable Instruments Act, 1881 (hereinafter referred to as N.I.Act for short) this appeal is filed.

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Brief facts of the case leading to filing of this appeal are that a complaint came to be filed on 10.11.2008 stating that complainant and accused are businessmen, known to each other and as such the accused borrowed a sum of Rs.2,00,000/- during first week of October, 2007 at Maradi Nagalapura Village, in the presence of Eerappa Lakshmana Godachi and Basavaraja Uddappa Vibhuti. At that time, accused had promised to return the loan amount within a period of six months. But after lapse of the said duration, when complainant demanded return, accused sought some more time. Ultimately he issued cheque dated 12.05.2008 bearing No.476286 drawn on Karnataka Bank Ltd., Koppadakere Branch, Dharwad for a sum of Rs.2,00,000/-. When the cheque was

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presented, it was returned unpaid with an endorsement ‘Account closed’, on 21.06.2008.

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Thereafter, notice was issued to accused on 08.07.2008. But, it was not served on accused. Thereafter, cheque was represented on 28.08.2008. It was returned on same day, once again with endorsement ‘account closed’. Therefore, complainant got issued statutory notice on 24.09.2008 through Registered Post Acknowledgment Due which was served on accused on 27.09.2008. Despite receipt, accused did not reply or make payment, thereby constraining complainant to file complaint.

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After recording sworn statement of complainant, trial Court issued summons to accused. On appearance accused denied the charges and sought for trial. During trial, complaint got himself as PW-1 and got marked Exhibits.P.1 to P.7. Thereafter, incriminating material was explained to accused, which he denied. His statement under Section 313 was recorded. Accused did not choose to lead any evidence on his behalf. Thereafter, based on material available, trial Court framed following points for its consideration:

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“CA±À 1: DgÉÆÃ¦AiÀÄÄ ¢£ÁAPÀ 12.05.2008 gÀAzÀÄ vÀ£Àß ªÁå¥ÁgÀzÀ GzÉÝÃ±ÀPÁÌV ¦AiÀiÁð¢zÁgÀ¤AzÀ 2,00,000 gÀÆ. ºÀt ¥ÀqÉzÀÄPÉÆAqÀÄ CzÀgÀ ªÀÄgÀÄ¥ÁªÀwUÁV vÀ£Àß SÁvÉ ªÀÄÄaÑgÀÄªÀ «µÀAiÀÄ UÉÆwÛzÀÝgÀÆ ¸ÀºÀ vÀ£Àß SÁvÉAiÀÄ PÀ£ÁðlPÀ ¨ÁåAPï °. PÉÆ¥ÀàzÀ PÉgÉ zsÁgÀªÁqÀ EzÀgÀ ZÉPï £ÀA.476286 EzÀ£ÀÄß 2,00,000 gÀÆ.UÀ½UÉ ¦AiÀiÁð¢zÁgÀ¤UÉ PÉÆnÖgÀÄvÁÛ£É JA§ÄzÀ£ÀÄß ¦AiÀiÁð¢zÁgÀ gÀÄdÄªÁvÀÄ¥Àr¹gÀÄvÁÛ£ÉAiÉÄÃ?

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CA±À 2: ¦AiÀiÁð¢zÁgÀ£ÀÄ DgÉÆÃ¦ PÉÆlÖ ¸ÀzÀj ZÉPï£ÀÄß vÀ£Àß SÁvÉ EgÀÄªÀ ¹ArPÉÃmï ¨ÁåAPï ªÀÄÄaÑgÀÄvÀÛzÉ JAzÀÄ UÉÆvÁÛ¬ÄvÀÄ JA§ÄzÀ£ÀÄß, £ÀAvÀgÀ vÁ£ÀÄ DgÉÆÃ¦UÉ PÁ£ÀÆ£ÀÄ ¥ÀæPÁgÀ £ÉÆÃnÃ¸ÀÄ PÉÆlÄÖ, ¸ÀzÀj £ÉÆÃnÃ¸ÀÄ DgÉÆÃ¦UÉ eÁjAiÀiÁVzÀÄÝ, DzÀgÀÆ ¸ÀºÀ DgÉÆÃ¦ £ÉÆÃnÃ¹UÉ GvÀÛgÀ PÉÆnÖgÀÄªÀÅ¢®è ªÀÄvÀÄÛ ¸Á®ªÀ£ÀÄß ªÀÄgÀÄ¥ÁªÀw ªÀiÁrgÀÄªÀÅ¢®è JA§ÄzÀ£ÀÄß, £ÀAvÀgÀ ¦AiÀiÁð¢zÁgÀ F zÀÆgÀ£ÀÄß ¸À°è¹gÀÄvÁÛgÉ JA§ÄzÀ£ÀÄß gÀÄdÄªÁvÀÄ¥Àr¹gÀÄvÁÛgÉAiÉÄÃ?”

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After answering point No. 1 in the negative and point

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No.2 in the affirmative, trial Court proceeded to pass impugned judgment of acquittal. Challenging acquittal, complainant is in appeal.

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Learned counsel for appellant submitted that though complainant had substantiated all necessary ingredients for constituting offence under Section 138 by examining complainant and marking documents, i.e., cheque as Ex.P1, Bank endorsement

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as Ex.P2 and P3, statutory notice as Ex.P.6 and postal acknowledgment as Ex.P.7. The trial Court on erroneous and perverse reasons acquitted the accused and same has led to miscarriage of justice, calling for interference of this Court.

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Assailing reasons assigned by trial Court learned counsel submitted that the first reason that successive presentation of cheque, when account was closed would be barred by limitation was unsustainable. Relying upon decision of this Court in case of SHIVANAND GURUPADAYYA HIREMATH VS. ANIL reported in 2019 (5) KLJ 679, learned counsel submitted that successive presentation of cheque even in case of ‘account closed’ would be maintainable as second presentation is within validity period of cheque. Learned counsel further submitted that there was no occasion for trial Court to doubt financial capacity of complainant, as accused did not dispute his signature on the cheque and its issuance to complainant, therefore presumption in law under Section 118 and Section 139 of N.I.Act was available to complainant. He was not required to prove all details of transaction as if in a civil suit.

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As accused failed to rebut this presumption and as complainant established all ingredients of offence was, appellant entitled for an order of conviction of accused.

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On the other hand, learned counsel for accused submitted that accused had denied entire case of complainant. Such being the case, it was required by complainant to prove foundational facts beyond reasonable doubt. Relying upon decision of Hon’ble Supreme Court in case of BASALINGAPPA VS. MUDIBASAPPA reported in AIR 2019 SC 1983 , learned counsel submitted that failure to prove financial capacity to lend the loan amount by complainant would be fatal and hence the impugned order of acquittal passed by trial Court did not call for any interference.

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I have heard learned counsel, perused impugned judgment and material on record.

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In support of his case, complainant has examined himself as PW-1. He has reiterated the entire contents of complaint. In his cross examination, accused has merely made suggestions

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denying the entire case of complainant. There is no elicitation of any admission which would cast any doubt about the case of complainant. The only elicitation is with regard to the presentation of cheque twice. Therefore, accused confined his defence to the sole ground that complaint is filed after representation of cheque when endorsement issued on presentation of cheque for first time was ‘account closed’. Therefore, complaint would not be maintainable. But in view of decision of this Court in Shivanand Gurupadayya Hiremath case ( Supra ), the question whether complaint filed on second or successive presentation of cheque when endorsement was ‘account closed’ would not be barred. Hence the said reason of the trial Court would be contrary to law.

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The other reason assigned by trial Court that complainant had failed to prove his financial capacity by placing of burden to prove entire transaction beyond all reasonable doubt, upon the complainant, would be unsustainable in view of the authoritative pronouncement of this aspect by the Hon’ble Supreme Court in the case of RANGAPPA VS. SRI MOHAN reported in (2010) 11 SCC 41 and APS FOREX SERVICES PVT., LTD., Vs.

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SHAKTI INTERNATIONAL FASHION LINKERS AND OTHERS

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reported in AIR 2020 SC 945. When there is no dispute by accused about his signature on cheque and its issuance to complainant, presumption would be available to complainant in terms of Section 118 and Section 139 of N.I.Act that cheque was issued towards discharge of legally recoverable debt. The trial Court was in grave error to have placed the burden upon complainant, as if it were a civil suit. The said error has led to miscarriage of justice.

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It is seen that the Hon’ble Supreme Court in Basalingappa’s case in paragraph-24 has held that accused had elicited admissions which went to rebut the presumption available to complainant and thus burden shifted upon complainant to prove complaint averments and transactions including financial capacity of complainant, beyond reasonable doubt. However, as it is held in this case that accused failed to rebut the presumption, complainant would be entitled for presumption and acquittal of accused for failure to prove financial capacity would be unsustainable.

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Hence, the impugned judgment passed by the trial Court in C.C. No. 101/2009 is set aside and the accused is convicted of offences punishable under Section 138 of N.I.Act. Appeal is allowed.

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ORDER ON SENTENCE

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Heard on the sentence.

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Learned counsel for appellant submitted that though accused had borrowed a sum of Rs.2,00,000/- in the year 2007, he has failed to repay the same till date and constrained the appellant to run around the Courts. Accused had also contended that cheque in question was issued as a security for paying a loan of Rs.15,000/- during the year 2004-05, which accused had acquired and said cheques had not been returned back to him even on demand. However, he had closed the account in the year 2005 itself. However, accused has failed to substantiate the said contentions by examining his banker or by any other evidence. Knowing fully well that account was closed, accused had utilized the cheques to mislead the complainant and therefore accused should be imposed with severe sentence and maximum penalty.

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On the other hand, learned counsel for accused submitted that accused is suffering from financial hardship and he is an agriculturist and sought for imposition of minimum sentence of fine.

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Following the directions issued by Hon’ble Supreme Court in Damodar S.Prabhu vs. Sayed Babalal H., reported in (2010) 5 SCC 663 , I feel it just and proper to impose a sentence of fine instead of imprisonment as the offence is in the nature of a civil wrong and the purpose of Section 138 is compensatory and not punitive. Hence, accused is imposed a sentence of fine of Rs.4,00,000/- (Rupees Four Lakhs Only) which is twice the amount of cheque and in default of payment of the same, to undergo simple imprisonment for a period of six months.

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Acting under Section 357 of the Code of Criminal Procedure, it is ordered that a sum of Rs.3,90,000/- (Rupees Three Lakhs Ninety Thousands only) shall be paid to the complainant as compensation and the remaining amount is ordered to be defrayed to the State towards expenses incurred in prosecution.

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Sd/JUDGE

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BVK

Nagappa S/O Basappa Karavinakoppa, v. Tukaram Narayan Gouda

Case brief

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Nagappa S/O Basappa Karavinakoppa, v. Tukaram Narayan Gouda

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