Allowed

M D Ramaiah v. G Rajanna

Karnataka HC4 Nov 2020CRL.A/879/2011

Case brief

AI extract

What is this about?

In a cheque dishonour case, the High Court allowed the appellant's appeal and remanded the matter to the trial court. The Court set aside the acquittal, holding that the trial court had superficially assigned reasons regarding the recovery of debt and failed to appreciate the evidence. The matter was remanded for adjudication on the point of the legally recoverable debt after providing an opportun

What did the court decide?

The acquittal judgment was set aside and the matter was remanded to the trial court for fresh adjudication on the legally recoverable debt.

M D Ramaiah Vs G Rajanna — Cheque Dishonour | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^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.879 OF 2011

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BETWEEN:

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M.D.Ramaiah Son of late Dasappa Aged about 59 years No.69/14, 2^nd cross 12^th Main, Mathikere Colony Road, M.S.R. College Bangalore – 560 054

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...Appellant

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(By Sri.K.Abhinav Anand, Advocate Appeared through video conferencing)

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AND:

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G.Rajanna Son of Gangaiah Aged about 39 years No.2227, Maruthi Nagar Makali, Makalai Post Harakyathanahalli Road Bangalore North Taluk Bangalore – 562 123 …Respondent

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(By Sri. Sridhar N.Hegde, 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.6.7.11 passed by the

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XIII ACMM, Bangalore in C.C.NO.13463/08 – 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 passed by the learned XIII Additional Chief Metropolitan Magistrate, Bangalore, in C.C.No.13463/2008, wherein, the accused came to be acquitted in the criminal case filed by the complainant under Section 200 of Cr.P.C., for the offence punishable under Section 138 of Negotiable Instruments Act. This appeal is preferred by the complainant.

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Learned counsel for the respondent is absent.

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In order to avoid confusion and over lapping the parties are addressed in accordance with their rankings as held by them before the trial Court.

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The substance of the case of the complainant is that, the accused is acquainted with the complainant and he had approached the complainant for financial assistance of

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Rs.5,00,000/- on 10.05.2007 for the purpose of purchasing the site and assured the complainant that he would repay the amount on 10.07.2007 and towards the repayment of the said amount, he issued a cheque bearing No.470096 dated 10.07.2007 for Rs.5,00,000/- drawn on Punjab National Bank, Peenya Industrial Branch, Bengaluru and requested the complainant to present the cheque on the said date. Relying on the assurance given by the accused, the complainant presented the cheque on 06.08.2007, but it came to be dishonored with a bank endorsement ‘insufficient funds’ on 08.08.2007. Again on the request of the accused, the complainant presented the cheque for the second time on 05.10.2007. Even on the second presentation, the cheque came to be dishonored with an endorsement ‘insufficient funds’ as per the bank memo dated 06.10.2007. A legal notice was got issued to the accused on 03.11.2007 through RPAD and also UCP, but the accused did not comply with the notice. Therefore, the complainant filed the complaint on 13.12.2007. Accordingly, the court took the cognizance of the offence.

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The contention of the accused is that he had not

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received any amount from the complainant and even he has not issued the cheque in question in favour of the complainant. His further contention is that one Mr.Yellappa was in good relationship with the accused and the former approached the accused by way of false representation by saying that he is the power of attorney holder of the land of the complainant and he would convince the complainant – Ramaiah to sell the land to the accused for a valuable consideration. So on the basis of this contract between Yellappa and the accused, the accused was asked to give a cheque as guarantee towards the Contract. So believing the words of Yellappa, the accused had issued cheque – Ex.P1 in a blank nature. Thereafter, Yellappa was not able to fulfill the contract as agreed, so he asked Yellappa to give back the cheque. But the said Yellappa went on postponing to return back the cheque to the accused on one or the other pretext. The accused further contends that the complainant has not lent any amount to the accused and there is no liability on him. Ex.P1 is the document filed by the accused.

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Sri.K.Abhinav Anand, learned counsel for

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appellant/complainant would submit that all the features of payment, existence of debt and issuance of cheque are established, but the learned trial judge had miscalculated the evidence available on record and dismissed the complaint. The consideration and presumption in favour of Negotiable Instrument, quantum of evidence and its quality are not appraised.

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Now, it is necessary to look into the defence and the contentions of the accused:

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According to him, there is no transaction took place with the complainant. The accused never borrowed amount of Rs.5,00,000/- from the complainant. He has not signed on the cheque. On the other hand, the complainant has misused the cheque which is containing the signature of the accused. In this connection the accused contends that one Yellappa approached him and offered that the land of the complainant in Sy.No.94/4 measuring 24 guntas, situated at Harokyathanahalli Village, was for sale and it belonged to the complainant and in turn

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Yellappa offered the same to the accused claiming that the said Yellappa is the power of attorney holder of the said land. In continuation of the transaction, accused was asked to give a cheque as a guarantee towards the Contract. So believing the words of Yellapa, the accused had issued a cheque which is marked as Ex.P1 and that was a blank cheque at that time. Thereafter, the said Yellappa was not able to fulfill the Contract as agreed and when accused asked him to return the cheque, the same was not done and he went on postponing to return the cheque to the accused. Finally, due to tacit and collusive understanding between the said Yellappa with the complainant, a false complaint came to be filed against the accused. But, it is for the accused to explain how the cheque came into possession of the complainant.

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The complainant claims that it is an out and out money lending transaction and accused had issued the cheque towards the repayment of loan of Rs.5,00,000/- borrowed from the complainant.

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The accused contends that he issued a blank

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cheque and nothing else was written on the same, except putting his signature on the said cheque and later, it was filled through illegal means by the complainant. The name of complainant in this case is M.D.Ramaiah and the accused is G.Rajanna. It is necessary to make a mention of Ex.D1 which is the copy of the sale agreement, dated 26.10.2006, which is written on a stamp paper of Rs.200/- and it is executed in favour of G.Rajanna, H.B.Puttaraju and Paramesh by Yellappa, wherein it is stated that the land in Sy.No.94/4 measuring 20 guntas situated at Harokyathanahalli, Dasanapura Hobli, Bengaluru North Taluk and certain items of the land in Sy.No.94/2 measuring 03 guntas, Sy.No.94/2 measuring 2 guntas were inherited by the Complainant. An agreement was entered into between Yellappa with accused and two others for purchase of land in Sy.No.94/4 and it was agreed for a sum of Rs.53,50,000/- and an advance amount of Rs.16,50,000/- was

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paid and further it is stated in the agreement that the registered sale deed to be executed within three months from

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the date of agreement. The said document has no relevance to the context in the present form.

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The aforesaid document was produced as per Ex.D1. It is the claim of the accused that Yellappa was agreed to sell the above properties and no doubt, it is the sale agreement which is stated to have been executed by Yellappa, however, it was not acted upon.

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In the context and circumstances of the case, it requires detailed clarification to understand what exactly the accused meant by his contention.

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In this regard, the following points are amply clear

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that:

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i) The accused states that he had a transaction/

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negotiation with one Yellappa who claims to be the power of attorney holder of the complainant and offered him to sell the landed property. Conceptually, Ex.D1 is the sale agreement and incidentally, it does not spell sale agreement executed by Yellappa in favour of Rajanna and two others. But the sale

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agreement does not disclose payment of sale consideration to the power of attorney holder of the complainant and there is not even any mention regarding the cheque.

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ii. The circumstances which warranted the accused for issuing the cheque as stated by him is that it was given as the security for the agreement or the contract which was entered into between Yellappa as the power of attorney holder and the accused and there is no power of attorney filed in the case.

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iii. The property agreed to be sold by Yellappa is to three persons and sale consideration as stated in Ex.D1 is Rs.53,50,000/- and advance amount of Rs.16,50,000/-.

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iv. The defence raised by the accused is that he issued a blank cheque and in the circumstances, while issuing a cheque as a security for the Contract, a presupposed amount to be mentioned as a average business amount and it is difficult to believe that the blank cheque is issued for the purchase of property. Moreover, no documents pertaining to the aforesaid property or copy of the same are produced by the accused. Insofar as legally recoverably debt is concerned, learned trial

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judge has found that complainant-PW.1 is working as an employee in Karnataka Soaps and Detergent company and drawing salary of Rs.27,700/- per month.

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The learned trial judge further finds that the say of the complainant regarding lending of Rs.5,00,000/- and admission of sale of property in Sy.No.94/4 through Yellappa are not reliable, moreover, no such sale deed has been executed. The accused has studied up to PUC but it is elicited from his mouth that he is not taken steps to recover the cheque that was given to Yellappa. In the circumstances, the learned trial judge takes out the example that the complainant agreeing to sale the property is an impediment for believing that he has the capacity to lend the amount of Rs.5,00,000/-.

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No doubt, the presumption under Negotiable Instruments Act, is in respect of ‘instrument’ with regard to existence of legally recoverable debt. Regard being had to the fact that it is in a series of denials of the cheque or signature by the accused. The accused states about the particular

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circumstance, under which he issued the cheque, except stating that the negotiation took place between him and Yellappa and he ends up in stating that agreement did not proceed ahead and in the Ex.D1 it is stated that the property was agreed to be sold to three persons, accused has not chosen to examine the co-purchasers. It is in a forum, a finding was given regarding the execution of sale agreement, right of specific performance and the related. No doubt, initially, onus lies upon the accused.

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Here Section 139 of the Negotiable Instrument Act is necessary to be mentioned which reads as under:

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“139. Presumption in favour of holder .—It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability

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Further, learned counsel for accused referred the decision in the case of J.Ramraj Vs. Iliyaz Khan reported in ILR 2006 KAR 4672.”

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In this connection, I find it cannot be stated that the responsibility of the accused is nil, when once he denies the complaint averments. He is not an illiterate. Admittedly, he has issued the cheque to Yellappa in connection with sale of immovable property but leaves his contention half a way. Whenever, a defence against the claim is placed forward, it cannot be evasive. The defence or the contention of the accused should be manifold.

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No doubt, denials may be evasive, formal, vague ambiguous or substantial, but the denial which is stated to be substantial one, the same should be supported by strong corroborative circumstances in the form of oral evidence or documentary evidence.

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I can only say, the denials here are not specific and precise. The circumstances, advanced by the accused do not appear to be proper.

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Insofar as the capacity of the complainant is

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concerned, lending the amount is a question of fact. No doubt,

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Rs.5,00,000/- is not a small amount. The complainant has to explain that he had sufficient resources and in the oral evidence, the complainant states that he is doing real estate business. In the cross-examination, it is elicited from the complainant that he had sold the land in Sy.No.94/4 to the extent of 20 guntas of Harokyathanahalli, Dasanpura hobli and the amount of Rs.5,00,000/- paid from the said amount. Learned trial judge would have asked the complainant to explain the circumstances of sale consideration and the payment. No doubt, the evidence reiterated by the complainant ought to have been explained precisely. In this connection I find, an opportunity may be required to be given to the complainant to explain the transaction of sale as claimed by the complainant. No doubt, it is not stated in the complaint.

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Whenever the denial or explanation for a particular

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aspect in the form of special plea is taken, the same is to be explained in an acceptable and satisfactory manner and when no explanation is given or the one given does not appear to be

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a proper one, if the person, who offers such explanation stand

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in an escapable position of liability.

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Under the circumstances, the mere adjudication of the matter does not cover all the aspects and requires an explanation of the case under the complaint registered for the offence punishable under Section 138 of N.I.Act., the learned trial judge has superficially assigned the reasons regarding the recovery of debt by mentioning the salary of complainant and concluded that he had no means and has not noticed the discrepancy in the explanation offered by the accused.

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In the circumstances, judgment in process is liable to be set aside and the matter deserves to be remanded to the trial Court for adjudication on the point of resource with the complainant of existence of legally recoverably debt by giving an opportunity to the parties to file their statements, documents and examining witnesses.

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For the aforesaid reasons, I proceed to pass the following:

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ORDER

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The appeal is allowed.

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The judgment dated 06.7.2011 passed in C.C.No.13463/2008 by XIII Additional Chief Metropolitan Magistrate is set aside. The matter is remanded to the trial Court for adjudication on the point of legally recoverable debt after giving an opportunity to both the parties to file their statements, documents and to examine the witnesses.

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Sd/JUDGE

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M D Ramaiah v. G Rajanna

Case brief

What is this about?

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M D Ramaiah v. G Rajanna

Case brief

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