Allowed

Sri. J. Suresh v. Sri. D.S. Kanthraj

Karnataka HC18 Dec 2020CRL.A/1470/2016

Case brief

AI extract

What is this about?

In this criminal appeal against an acquittal for cheque dishonour, the High Court of Karnataka held that the trial court erred in not applying the presumption under Section 139. The High Court allowed the appeal, set aside the acquittal, and convicted the accused, imposing a fine and awarding compensation to the complainant.

What did the court decide?

Judgment of acquittal set aside; accused convicted under Section 138; fine of Rs. 6,20,000/- imposed; compensation of Rs. 6,00,000/- awarded to complainant.

Sri. J. Suresh Vs Sri. D.S. Kanthraj — Money Laundering | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^TH DAY OF DECEMBER, 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.1470/2016

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BETWEEN:

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SRI J SURESH SON OF LATE J VENUGOPAL AGED ABOUT 36 YEARS No.148, 5^TH CROSS 28^TH MAIN, H.S.R LAYOUT 1^ST SECTOR BANGALORE – 560 034. ..APPELLANT

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(BY SRI H MUJTABA, ADVOCATE)

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AND:

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SRI D S KANTHRAJ SON OF SIDDE GOWDA AGED ABOUT 40 YEARS R/AT C/O CAUVERY TOURS AND TRAVELS No.301, 11^TH CROSS WILSON GARDEN BANGALORE – 560 027.

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..RESPONDENT

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(BY SRI VENKATRAM, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 10.06.2016 PASSED BY THE XX A.C.M.M., BANGALORE IN C.C.No.49785/2010-

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ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT.

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

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JUDGMENT

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Appeal is directed against the Judgment dated

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10.06.2016 passed in C.C.No.49785/2010 by the XX Addl. C.M.M., Bengaluru, wherein accused came to be acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act. Being aggrieved by the said Judgment complainant has come in appeal.

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In order to avoid confusion and overlapping parties are referred in accordance with the ranks held by them before the trial court.

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The substance of the complaint as could be seen

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from the Judgment and order dated 10.06.2016 is

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accused and complainant are friends for the past six

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years. Accused approached the complainant in the first week of October, 2009 for a hand loan of Rs.6,00,000/- to clear his personal and family problems and promised to repay the amount within seven months as he is getting money by selling his ancestral property in his village at Kanakapura Taluk. In order to help the accused, complainant arranged a sum of Rs.3,00,000/- by himself from his savings and remaining Rs.3,00,000/- arranged by him through his friends and relatives.

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The complainant paid Rs.6,00,000/- to the accused by way of cash on 15.10.2009 at his residence and accused executed on demand promissory note in the presence of witnesses. On 02.05.2010 when the complainant approached the accused and demanded to repay the loan amount, accused issued cheque bearing No.409979 for a sum of Rs.6,00,000/dated 05.05.2010 drawn on

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Karnataka Bank Ltd., Wilson Garden Branch,

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Bengaluru. However on presentation it came to be dishonoured and returned with endorsement “Funds Insufficient” and legal notice was issued on 28.05.2010. Notice was served on the accused. Accused neither replied nor paid the amount.

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Complaint was filed and case was registered.

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Learned trial Judge was accommodated with the oral evidence of PW-1-J.Suresh, PW-2-M.Srinivas Murthy –witness to the promissory note and Exhibits P-1 to 7 on behalf of the complainant. Oral evidence of DW-1-D.S.Kantharaj -accused. No documents were produced on behalf of the accused.

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Learned counsel for respondent is absent.

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Learned counsel for complainant Sri.Mujtaba

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would submit that the amount was paid as a mark of

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friendship and complainant never expected accused

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would take u turn and deceit him.

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Learned trial Judge in the course of judgment observed a stray discrepancy that when the amount was lent at home nobody was present. Now the question is, on the date of issue of promissory note according to him no one was present. But it is signed by two witnesses as attestors.

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Negotiable Instrument more particularly

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promissory note need not be attested if once attestors have signed it, the requirement would be to examine one of the attestors to ensure that the execution of the document is proved. Basically this is not a case on pronote and this court cannot apply the same yardstick to the instant case. However learned counsel for appellant would submit that PW-2 was examined in order to establish the execution and he is

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an attesting witness. When the transaction takes place as a friendly transaction it is normally not treated as a business. Now the question would be whether it is wrong to take promissory note or wrong to file a case on cheque that was issued earlier.

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Promissory note, bill of exchange and cheque are negotiable instruments. On the other hand cheque is also a bill of exchange only difference is it is drawn on a banker in favour of payee or person named therein and signed by drawer. In this case promissory note was executed and when demanded cheque was issued. We have to see going by direct rules of application. There is lot of difference between the result of a case registered for the offence punishable under Section 138 and regular suit on promissory note the former one is substantially criminal in nature and later one is civil in nature.

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When a decree is passed in a civil suit the decree holder go out and out in all segments for recovery of money including attachments, sale notice or other financial resources. But the result in case of a negotiable instrument is that accused has to pay penalty or fine amount ordered if not he would be sent to jail and no question of proceeding against assets which belonged to him. It is not a decree in case of a negotiable instrument.

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The other aspect in the case is it is a case of denial in tandum by the accused and accused also takes up a plea that in the year 2006 his close friend Raghu was in dire need of money of Rs.45,000/-. Complainant was requested to lend money and he used to charge exorbitant interest of 5% per month. Later Raghu abruptly disappeared and his whereabouts are not known. Accused was pressurized

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by the complainant to pay the money. Accused paid Rs.10,000/- for a period of 10 months and also cheque was pressurized to be issued as a security. Plain denial or with a stand cum denial are different. Here accused takes up a specific plea he could have examined any concerned person whether related to Raghu or complainant that effort is not made. In the context and circumstances learned trial Judge has not applied the principles of presumption contemplated under Section 139 of the Negotiable Instruments Act and has given a go by to the wider meaning of holder and holder in due course as defined under Section 118 of the Negotiable Instruments Act.

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In the over all circumstances of the case, the execution of promissory note does not come in the way, further the discrepancies are minor. Learned trial Judge utterly failed to adjudicate the matter in

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accordance with the legal principles and Judgment

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dated 10.06.2016 is liable to be set aside.

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Hence, I proceed to pass the following:

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ORDER

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Appeal is allowed. Judgment dated 10.06.2016

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passed in C.C.No.49785/2010 is set aside. Accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to pay a fine of Rs.6,20,000/-. Out of which complainant be given compensation of Rs.6,00,000/payable by the accused and Rs.20,000/- is ordered to be adjusted to the State Exchequer. In default of payment of fine, accused shall undergo simple imprisonment for a period of one year.

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Sd/JUDGE

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SBN

Sri. J. Suresh v. Sri. D.S. Kanthraj

Case brief

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Sri. J. Suresh v. Sri. D.S. Kanthraj

Case brief

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