Allowed

Smt Shanthamma v. Smt Sunanda Reddy

Karnataka HC5 Nov 2020CRL.A/1160/2011

Case brief

AI extract

What is this about?

In this criminal appeal against acquittal under Section 138 of the N.I. Act, the High Court set aside the trial court's order holding discrepancies between the original cheque and supporting documents as negligeable oversight, finding the accused guilty and sentencing her to a fine.

What did the court decide?

Appeal allowed; acquittal set aside; appellant found guilty under Section 138 N.I. Act and sentenced to pay a fine of Rs. 2,15,000.

Smt Shanthamma Vs Smt Sunanda Reddy — Cheque Dishonour | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 05^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.1160 OF 2011

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BETWEEN:

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Smt. Shanthamma W/o. R.Srinivasan Major Residing at M.Medihalli Village Attibele Hobli Mayasandra Post Anekal Taluk Bangalore Rural District

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...Appellant

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(By Sri.Yashodhar Hegde for Sri. Ajay J.Nandalike, Advocates Appeared through video conferencing)

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AND:

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Smt. Sunanda Reddy Principal / Head Mistress Major Maruthi Vidya Mandir Bharathi Dasan Nagar Railway Station Road Hosur – 635 109

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…Respondent

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(By Sri.A.Shivaramu, Advocate (Absent))

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This criminal appeal is filed under Section 378(4) of Cr.P.C., praying to set aside the order dt:18.10.11 passed by the Prl.Civil Judge and JMFC, Anekal in C.C.No.25/05 – acquitting the respondent/accused for the offence p/u/s 138 of N.I.Act.,

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This appeal Coming on for hearing this day, the Court delivered the following:

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JUDGMENT

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Appeal is directed against the judgment dated 18.10.2011 passed by learned Principal Civil Judge & JMFC, Anekal in C.C.No.25/2005, wherein accused came to be acquitted for the offence punishable under Section 138 of Negotiable Instruments Act, 1881. Being aggrieved by the said judgment, the complainant has come in this appeal.

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In order to avoid confusion and overlapping, the parties are addressed in accordance with the rankings held by them before the trial Court.

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The substance of the complaint is that

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complainant and the accused are known to each other for the past 10 years as on the date of filing the complaint.

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The accused requested for financial assistance of Rs.2,10,000/- from the complainant (it is submitted that at that time, the accused was a tenant in the house of the complainant). The amount so sought by way of loan by the accused was stated to be received to counter the family difficulties and the complainant responded favourably and paid Rs.2,10,000/- as sought by the accused and towards the repayment of the same, the accused issued a blank cheque bearing No.530882 dated 30.09.2004 drawn on ICICI bank, Hosur Branch. When the complainant presented the cheque for payment, it was dishonored for want of sufficient funds on 06.10.2004 and the intimation was given to the complainant on 07.10.2004 and was received by the complainant on 11.10.2004 as per Ex.C4. Therefore, the complainant got issued a legal notice to the accused on 09.11.2004. Though, the notice was served on her, there was neither reply nor compliance on the part of the accused. The return acknowledgment indicates that notice was served on the accused on 10.11.2004 itself. The complainant after waiting for the statutory period, filed

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the complaint under Section 200 of Cr.P.C., before the trial Court for the offence punishable under Section 138 of Negotiable Instruments Act, against the accused.

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During the trial of the case, the complainant/Smt.Shanthamma adduced the oral evidence by examining herself as PW.1, Sri. C.Bharamappa – as PW.2 and Ponnamarthand as PW.3. PW.2 is stated to be the manager of ICICI Bank and PW.3 is the manager of Syndicate bank where the complainant maintains her account. Exhibits – C1 to C8 are the documentary evidence presented by the complainant, which are as under:

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Ex.C1 - Original Cheque dated 30.9.2004 Ex.C2 - Receipt dated 7.10.2004 Ex.C3 - Memo dated 6.10.2004 Ex.C4 - The counter foil Ex.C5 - Copy of legal notice dated 9.11.2004 Ex.C6 - Postal Acknowledgment Ex.C7 - UCP dated 9.11.2004 Ex.C8 - Returned RPAD cover

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The accused never chose to either adduce oral evidence or furnish the documents. The learned trial judge

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in his wisdom has appreciated the evidence available before him and acquitted the accused under Section 255(1) of Cr.P.C.,

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The acquittal of the accused by the trial Court is based on its finding that there is discrepancies regarding the cheque number and date as mentioned in the sworn statement of PW.1/complainant and in the legal notice - as per Ex.C5 versus the original number and the date as mentioned on the cheque – Ex.C1. To simplify the same, it is necessary to mention the cheque numbers. The cheque bearing No.530882 mentioned at Ex.C1 is drawn on ICICI Bank, Hosur branch in favour of Shantamma – the complainant for a sum of Rs.2,10,000/- dated 30.09.2004. The other one which is stated by complainant in her Sworn statement is Cheque bearing No.530892 dated 06.10.2004.

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In the legal notice Ex.C5, the amount, the

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name of the party and cheque number – 530882 are properly mentioned and the date of the cheque is

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mentioned as 06.10.2004. Thus, it is apparent on the face of the record that there is difference with regard to mentioning the cheque number in the sworn statement of PW.1 and date of cheque in the legal notice, which are seen on the original cheque.

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Learned counsel submits that the learned trial judge has dismissed the complaint without appreciating the crucial evidence in the case and has treated the same as typographical error and oversight as a substantial discrepancy. On the contextual reading of the case, the assessment of the details of the cheque, ought to have been made to assess the entire case.

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The negotiable instrument as recognized by the Negotiable Instruments act of 1881 are three in number: i) a bill of exchange, ii) cheque and iii) a promissory note. The cheque is a bill of exchange plus something more. The definition of the cheque under the Negotiable Instruments Act reads as under:

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“6. “Cheque”.—A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form.

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As per Negotiable Instruments Act, holder of the cheque is presumed to have come into the possession of the instrument for consideration. In other words, a holder is supposed to be a holder in due course. The definition of the term ‘holder’ and ‘holder in due course’ as per Section 8 and 9 of the Negotiable Instruments Act, read as under:

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8. “Holder”. —The “holder” of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto.

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Where the note, bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction.

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9. “Holder in due course” .—“Holder in due course” means any person who for consideration

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became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if [payable to order], before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.

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The main features of cheque are, it is drawn on

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banker payable to bearer, to self or to a particular person and cheque is crossed by writing two parallel lines at the left hand top corner of the cheque which restricts further negotiability. The alteration of what is wrongly mentioned in the cheque certain times invalidate the cheque and thus, the alternation that materially affects the legal efficacy of negotiable instrument are recorded as material alteration which may be in connection with date, in order to validate an invalid cheque; in altering the name of the drawee or the payee, amount and other aspects regarding signature, period of validity and related. Thus, when a correction or alteration in the form done erroneously, the modification would mitigate the legal effect of the cheque and such

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modification or alteration are material alteration which invalidate the cheque.

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Above all, basic point is, there must be sufficient amount in the bank balance, in other words, when the account number, account relating to the cheque issued does not have sufficient balance to honor the cheque, the discussion of other aspects, have a little significance.

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In this connection what is happened is the date of the cheque is wrongly mentioned in the legal notice. Therefore, now the question is whether does it vitiate the validity of the cheque and liability of the account holder. Insofar, as evidence is concerned, it is unchallenged testimony and the accused has not chosen to contest the matter, regard being had to the fact that complaint ended in acquittal of accused.

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For a moment, mentioning of the cheque

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number and date though are wrong, they are not altered

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and the cheque is presented in its original position. It is not the case of the accused that it has been materially altered. The very date of the cheque though wrongly mentioned in the legal notice, it does not adulterate the rights of the complainant under the said cheque, neither does it fall in the grew of material alteration or other aspects of validity.

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Any document in the form of deposition or statements, numerical digits are to be read with reference to entire context, isolating and reading or concentrating on the particular stray aspect cannot be equated with a complete reading. Any document even the legislation for that matter has to be read with the object of such document.

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The question is, one more resort to the rules of interpretation such as literal, golden and mischief. But art of reading the document must be keeping in mind the object and act of the attainable circumstances. The learned trial judge has failed to comply the basic principle

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regarding the reading of the material document and has gone to the extent of dismissing the complaint only by virtue of finding that cheque number and date are wrongly mentioned. At the end people come to the Court with a hope that honest oversight, error or hyper technicalities are likely to be considered in the contextual meaning, unless the right of other people is altered or taken away. The judgment passed by the learned trial judge is far from probability, realities and appreciation, the same cannot be sustained and it is liable to be set aside.

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17. Accordingly, I proceed to pass the following:

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ORDER

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Appeal is allowed and the order dated 18.10.2011 passed by Principal Civil Judge & JMFC, Anekal in C.C.No.25/2005 is set aside.

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Consequently, complaint lodged by the complainant is allowed. The accused is found guilty of the offence punishable under Section 138 of N.I.Act., and he is sentenced to pay a fine of Rs.2,15,000/-. Out of which,

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Rs.2,10,000/- shall be paid to the complainant as compensation and remaining Rs.5,000/- shall be adjusted to the State account. In default of payment of fine, accused shall undergo S.I. for a period of six months.

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Office to send back the file to the trial Court.

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Sd/JUDGE

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Smt Shanthamma v. Smt Sunanda Reddy

Case brief

What is this about?

What did the court decide?

Smt Shanthamma v. Smt Sunanda Reddy

Case brief

What is this about?

What did the court decide?

What the court decided

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