Allowed

Narayan S/O Badiya Naik v. Venkatraman S/O Krishna Achari

Karnataka HC2 Dec 2020CRL.A/100037/2014

Case brief

AI extract

What is this about?

High Court of Karnataka allowed an appeal filed by the issuer of a dishonoured cheque, setting aside the trial court's acquittal. The Court held the accused failed to prove the debt was discharged or the cheque was issued as security, leading to conviction and sentencing under Section 138 NI Act.

What did the court decide?

Acquittal set aside; accused convicted; sentenced to fine of ₹86,000 (double cheque amount) and three months simple imprisonment if unpaid.

Narayan S/O Badiya Naik Vs Venkatraman S/O Krishna Achari — 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 2^{N D} 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.100037 OF 2014

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BETWEEN

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NARAYAN S/O BADIYA NAIK AGE: 46 YEARS, R/O: NIRGADDE, MUNDALLI, BHATKAL.

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...APPELLANT

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(BY SRI.VAGEESH R.HEGDE, ADV. FOR SRI. VENKATESH M KHARVI, ADVOCATE)

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AND

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VENKATRAMAN S/O KRISHNA ACHARI AGE: MAJOR, R/O: NEAR CANARA LAVANCH PRODUCTS, BENGRE, BHATKAL.

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…RESPONDENT

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(BY SRI.SURESH S BHAT, ADV.)

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THIS CRIMINAL APPEAL IS FILED U/S 378(4) OF CR.P.C. SEEKING TO ALLOW THIS APPEAL AND SET ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL PASSED BY THE ADDL. CIVIL JUDGE & JMFC COURT, BHATKAL IN C.C.NO.90/2012 DATED 30.11.2013.

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THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, THE COURT, DELIVERED THE FOLLOWING:

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JUDGMENT

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Challenging the judgment dated

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30.11.2013 passed by Addl. Civil Judge and JMFC., Bhatkal in CC No.90/2012, this appeal is filed by the complainant challenging the acquittal of the accused for the offence under Section 138 of Negotiable Instrument Act (for short ”NI Act”).

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Brief facts giving rise to this appeal are as under:

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A complaint under Section 200 of Code of Criminal Procedure (for short ”Cr.P.C.”) filed by the complainant-appellant stating that the complainant and the accused are contractors and that the accused has borrowed a sum of Rs.43,000/- from the

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complainant on 15.07.2011 with a promise of repayment within four months. On demand by the complainant, the accused had issued a cheque for Rs.43,000/- drawn on Bhatkal Agricultural and Rural Development Co-operative Bank Ltd. for Rs.43,000/-. When the same was presented for collection on 09.11.2011, it was returned with an endorsement “Funds insufficient” on 09.11.2011. Thereafter, a statutory notice was issued by RPAD to the respondent-accused on 12.11.2011. It was served on 15.11.2011. The accused issued a reply on 01.12.2011. In the reply, the accused as mentioned that he has repaid the entire hand loan transaction as claimed by the complainant and had stated that the accused was required to undergo heart treatment during the year 2008 and was in

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need of money for the same. When he had approached, one Sri. Suresh Venkatarama Achari for lending him Rs.10,000/-, the said Suresh Venkatarama Achari had told him that he did not have the money but the accused can borrow it from the complainant. At that time, the accused had given a signed cheque to Suresh Venkatarama Achari and had asked him to borrow Rs.10,000/-. After undergoing heart treatment the amount of Rs.10,000/was paid back through Suresh Venkatarama Achari and the accused had requested for returning of the cheque. However, the same had not been returned and now the said cheque appears to have been used by the complainant to extract money from the accused.

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After recording sworn statement

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of complainant and issuance of summons, after taking cognizance, accused appeared; denied the charges and sought for trial.

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examined himself as PW-1 and got marked cheque as Ex.P1, endorsement by Bank as Ex.P.2, Statutory notice as Ex.P.3, the postal slip as Ex.P.4, the RPAD acknowledgment as Ex.P.5 and the reply to statutory notice issued by accused as Ex.P.6.

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Thereafter, incriminating material was explained to the accused who denied the same. The statement under Section 313 of Code of Criminal Procedure.

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Thereafter, trial Court framed following points for it’s consideration.

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1. Whether the complainant proves the existence of legally recoverable debt?

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1. Whether the complainant has complied with all the mandatory requirements as contemplated under Section 138 of the Negotiable Instruments Act?

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After answering point Nos.1 and 3

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in the negative and holding that point No.2 did not survive for consideration proceeded to pass an order of acquittal. Challenging the acquittal, the complainant is in appeal before this Court.

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Learned counsel Sri.Vageesh R.Hegde, appearing for Venkatesh M.Karve submitted that the accused in his reply to statutory notice admitted his signature on the cheque and it’s issuance to complainant. Hence, presumption under

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Section 118 and 139 of NI Act is available to complainant and trial Court should not have placed the burden of proving the transaction in detail upon complainant.

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He further submitted that accused admitted borrowing loan through Suresh Venkatarama Achari and claims return of loan through Suresh Venkatarama Achari, but fails to examine Suresh Venkatarama Achari as a witness. It was further submitted that accused had in fact filed a complaint against complainant alleging misuse of cheque in consideration herein, on the ground that it was given as a security only. However, Police after investigation filed ‘B’ report. The facts were elicited from accused during his cross examination. Thus, the defence of accused

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that the cheque was given as a security is totally unbelievable. As accused has not challenged the ‘B’ report, it has to be held that accused failed to substantiate any of his contentions. Hence, the trial Court could not have acquitted the accused. It was lastly submitted that even when accused himself admitted to have borrowed the loan(though only a sum of Rs.10,000/-) from complainant through Suresh

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Venkatarama Achari, the trial Court has disbelieved the possibility of such loan transaction between complainant and

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accused, on the ground that they were strangers. The said reason is perverse and contrary to record and calls for interference. It was submitted that

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impugned judgment is riddled with perverse reasoning and same has lead to miscarriage

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of justice and sought for setting aside order of acquittal and for conviction of accused.

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On the other hand learned

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counsel Sri. Suresh S. Bhat, advocate for respondent submitted that accused had admitted borrowing a sum of Rs.10,000/only from complainant and that too more than three years prior to the date as claimed by complainant and contended that the said debt was not only repaid by him but had become time barred as on date of cheque as alleged by complainant. Therefore, judgment of acquittal was fully justified and sought for dismissal of appeal. 10. Learned counsel further pointed out that there is discrepancy with regard to the place where loan amount was paid to accused as complainant has stated in

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complaint that money of Rs.40,000/- was

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paid at his residence whereas in crossexamination, he admits that it was paid in front of Taluk Panchayath Office at Bhatkal.

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In reply, learned counsel for appellant submitted that when the transaction is admitted and cheque is admitted, minor discrepancies ought to be ignored and substantive evidence placed on record by complainant has to be considered.

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I have heard learned counsel,

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perused impugned judgment and record.

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From the above, it is not in

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dispute that cheque in question is signed by accused and given to complainant. It is also not in dispute that there was a loan

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transaction between complainant and

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accused. It is however disputed by accused that loan amount was only Rs.10,000/- and not Rs.43,000/- and that said loan had already been cleared and there was no subsisting legally recoverable debt.

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From the complaint and

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documents marked Exs.P1 to P6, it emerges that cheque was issued by accused to complainant and the same when presented for payment was returned with endorsement “funds insufficient.” Thereafter complainant has also issued statutory notice to accused for which accused replied. As the amount remains unpaid, the ingredients necessary for constituting offence under Section 138 of NI Act were established. Though accused has taken a contention that loan of

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Rs.10,000/- was borrowed through Suresh

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Achari, and that it was repaid, there is no evidence led by accused to prove the same. Aforementioned Suresh Achari is not examined on behalf of accused. Thus, it has to be held that accused failed to substantiate his defence and rebut the presumption available in favour of complainant under Section 118 and 139 of N.I. Act. The Hon’ble Supreme Court in Rohitbhai Jivanlal Patel V/s State of Gujarat and another reported in AIR 2019 SC 1876, Rangappa V/s Sri Mohan reported in (2010) 11 SCC 441 and Kishan Rao V/s Shankargouda, reported in (2018) 8 SCC 165, referring to the earlier decision in the case of Kumar Exports V/s Sharma Carpets, reported in (2009) 2 SCC 513 hold that the

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presumption available under Section 118 and 139 of NI Act though a rebuttable presumption, the same cannot be by a bare denial of transaction by accused. The accused is required to bring on record such facts and circumstances upon consideration of which the Court may either believe that consideration did not pass or the debt did not exit. Such an effort on the part of accused is lacking in this case.

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Though there is discrepancy with regard to place of handing over loan amount, it would not materially alter the case of complainant. The reason assigned by trial Court that it was unbelievable that loan of Rs.43,000/- would be paid by complainant to accused who was a stranger to him is perverse especially in the light of

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the fact that accused had admitted that the loan was obtained through Suresh Achari who knew the complainant. The reason assigned by trial Court for acquittal being perverse, requires to be set aside.

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Hence, the appeal is allowed. The impugned judgment acquitting accused is set aside. The accused is convicted for offence under Section 138 of the Negotiable Instruments Act.

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ORDER ON SENTENCE

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Insofar as the sentence, it was submitted by learned counsel for appellant that loan was of the year 2011 and more than nine years have lapsed and therefore sought for imposition of maximum sentence/penalty.

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On the other hand, learned counsel for respondent-accused submitted that accused is bedridden due to paralysis and is not having any source of income at present and the said circumstances may be taken into account.

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Taking note of the law laid down by Hon’ble Supreme Court in Damodar S.Prabhu V/s Sayed Babalal H., reported in 2010(5) SCC 663, that the consideration at the time of punishment should be compensatory and not punishment, I am of the view that instead of imposing a sentence of imprisonment, it would be just and proper to impose a sentence and fine only which shall be a sum of Rs.86,000/i.e. twice the cheque amount. It is also ordered that in default of payment of fine

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amount, the accused shall undergo simple

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imprisonment for a period of three months.

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Acting under Section 357 of Cr.P.C., it

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is ordered that a sum of Rs.80,000/- is to be paid to the complainant as compensation and the remaining sum of Rs.6,000/- shall be defrayed to the State.

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SD/-

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HMB/CLK

Narayan S/O Badiya Naik v. Venkatraman S/O Krishna Achari

Case brief

What is this about?

What did the court decide?

Narayan S/O Badiya Naik v. Venkatraman S/O Krishna Achari

Case brief

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What did the court decide?

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