Partly allowed

Pradeep S/O Mahadevappap Hulasangi @ Bosale v. Lohit S/O Vijaykumar Kudari

Karnataka HC18 Dec 2020CRL.RP/100141/2019

Case brief

AI extract

What is this about?

The High Court partly allowed the criminal revision. It held the accused failed to rebut the presumption under Section 139 NI Act regarding the legally recoverable debt. The conviction was upheld, but the sentence was modified to increase the fine and adjust compensation.

What did the court decide?

The conviction was upheld. The fine was increased to Rs.4,50,000/-, compensation fixed at Rs.4,17,000/-, and default imprisonment increased to six months. Prior deposit of Rs.3 lakhs accounted for in

Pradeep S/O Mahadevappap Hulasangi @ Bosale Vs Lohit S/O… — Cheque Dishonour | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH

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DATED THIS THE 18^{T H} DAY OF DECEMBER, 2020

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BEFORE

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THE HON’BLE MR. JUSTICE PRADEEP SINGH YERUR

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CRIMINAL REVISION PETITION NO.100141/2019

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BETWEEN:

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PRADEEP S/O. MAHADEVAPPA HULASANGI @ BOSALE AGE: 51 YEARS, OCC: CABLE DISK BUSINESS R/O. ASHWINI NAGAR, 1^ST CROSS, HAVERI, TQ: & DIST: HAVERI.

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….PETITIONER.

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(BY SHRI LINGESH V. KATTEMANE, ADVOCATE, FOR SHRI S.G.KADADAKATTI, ADVOCATE.)

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AND:

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LOHIT S/O.VIJAYKUMAR KUDARI AGE: 26 YEARS, OCC: PRIVATE JOB, R/O. HAVERI, TQ: & DIST: HAVERI.

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….RESPONDENT.

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(BY SHRI ROHIT PATIL, ADVOCATE, FOR SHRI SHRIKANT T. PATIL, ADVOCATE.)

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THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 READ WITH SECTION 401 OF CR.P.C., PRAYING TO SET ASIDE THE JUDGMENT DATED 18.4.2019, PASSED BY I ADDL. DISTRICT AND SESSIONS JUDGE, HAVERI, IN CRL.A.NO.70/2018,

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AND THE JUDGMENT DATED 3.4.2018, PASSED BY PRL. CIVIL JUDGE AND JMFC, HAVERI, IN C.C.NO.61/2018, ETC.,.

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THIS PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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Though this appeal is listed for admission,

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with consent of both parties, taken up for final disposal.

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This revision petition is preferred by accused being aggrieved by judgment of conviction dated 3.4.2018, passed by Prl. Civil Judge and JMFC, Haveri, in C.C.No.61/2018 wherein accused came to be convicted for the offence punishable under section 138 of Negotiable Instruments Act, which is confirmed by I Addl. District and Sessions Judge, Haveri, in Crl.A.No.17/2018 by judgment dated 18.4.2019.

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For the sake of convenience, parties shall be referred to as per their status before trial Court.

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Brief facts leading to filing of this case are as under:

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It is the case of complainant that his father and accused along with himself were good friends and well known to each other for several years. In view of good family relationship, accused approached father of complainant for securing hand loan of Rs.4,00,000/- to him and expand his cable business and for family necessities. On the said request of accused, complainant and his father agreed to provide a hand loan of Rs.4,00,000/- on assurance that said amount would be repaid within four months. On repeated request of complainant for repayment of the amount, accused issued a cheque bearing No.270637 dated 12.9.2017 in favour of complainant.

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On presentation of the said cheque, the same came to be dishonoured for the reason ‘insufficient funds’ on 13.9.2017. Thereafter complainant got issued a legal notice to accused

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calling upon him to repay dishonoured cheque amount. On receipt of said notice, accused replied

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to the same on 4.10.2017. But however did not make payment towards dishonoured cheque amount.

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In view of non payment of dishonoured cheque amount, complainant lodged a complaint for the offence punishable under section 138 of Negotiable Instruments Act (‘the Act’ for short). On cognizance being taken, accused was summoned before the Court and his plea was recorded wherein he pleaded not guilty and claimed to be tried. Accordingly he was tried. In order to prove the case, complainant got examined himself as PW.1 and got marked Exs.P.1 to P.7 and closed his side. Thereafter statement of accused was recorded as required under section 313 of Cr.P.C., wherein accused denied all incriminating evidence against him. However accused did not lead any evidence and neither did he produce any documents on his behalf.

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After considering entire material

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evidence, both oral and documentary, trial Court came to the conclusion that accused failed to rebut the presumption cast in favour of complainant under section 139 of the Act and thereby complainant has proved existence of legally recoverable debt and accordingly trial Court convicted the accused for the offence punishable under section 138 of the Act and sentenced him to undergo simple imprisonment for a period of six months and ordered to pay a fine of Rs.4,40,000/-, out of fine amount a sum of Rs.4,20,000/was ordered to be paid as compensation to respondent/complainant and in default of payment of fine, to undergo simple imprisonment for a period of two months.

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Aggrieved by the judgment of conviction, accused preferred an appeal before I Addl. District and Sessions Judge, Haveri, in Crl.A.No.70/2018. On re-appreciation and re-evaluation of entire material evidence placed

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before the Court, appellate Court came to the conclusion that complainant made out necessary ingredients to fulfill the offence punishable under section 138 of the Act and the trial Court has passed reasoned order holding accused guilty for the aforesaid offence. Appellate Court did not find any merit to allow the appeal. Accordingly dismissed the appeal and confirmed the order passed by trial Court.

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Aggrieved by the judgment of conviction and order of sentence passed by trial Court and affirmed by appellate Court, petitioner has approached this Court challenging the correctness legality and propriety of the judgments of both the Courts.

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Heard Shri Lingesh V. Kattemane, learned counsel for petitioner and Shri Rohit Patil, learned counsel for respondent.

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It is contended by learned counsel for appellant that judgment of conviction and order of

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sentence passed by trial Court and affirmed by appellate Court is contrary to material evidence adduced by parties. Hence the same is unsustainable in law and accordingly deserves to be set aside and reversed. It is the contention of learned counsel for accused that there was no financial capacity much less any source of income for complainant to advance the alleged loan to accused. Trial Court has committed an error in not considering this aspect of complainant having no source of income and capacity to advance loan as alleged in the present case. It is further contended that trial Court has ignored the aspect of non production of any material evidence by complainant to prove the fact that he has advanced loan of Rs.4,00,000/- to accused.

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It is further contended by the learned counsel

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for the accused that despite expiry of almost six months Complainant had never demanded return of hand loan, even after the death of his father no amount was sought for return. Therefore, the theory and story created by the

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Complainant is unbelievable and hence trial Court ought to have acquitted the accused rather than convicting him for the aforesaid offence. He further contends that Complainant has mis-used the cheque as he had good family relationship with the accused and during one of the visit to the house of accused, Complainant had stolen the cheque kept in the house of the accused. This fact has been ignored by the trial Court. Admittedly there was close relationship between accused and Complainant and Complainant used to visit the house of the accused. Therefore, there is no material produced by the Complainant to establish the fact of claiming loan as alleged. Non consideration of these aspects by the trial Court is erroneous as Complainant has to prove the existing legally recoverable debt. In the present case no material has been produced to show that there exists any legally recoverable debt. On these submissions learned counsel for petitioner seeks to allow the petition and set aside the order passed by both the Courts.

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Per contra, learned counsel for respondent – Complainant contends that the judgment of conviction

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passed by the trial Court and confirmed by the Appellate Court is based on the material evidence both oral or documentary and hence there is no error or arbitrariness in the order passed by both the Courts. Therefore, there is no requirement of any interference by this Court to the concurrent finding of both the Courts. Learned counsel for Complainant further contends that admittedly relationship between both the parties are cordial and friendly; accused has admitted signature on the cheque, though it is the contention of the accused that the said cheque was stolen from his house, no material to that effect or complaint in any nature has been registered by the accused against the Complainant. Learned counsel for Complainant further contends that in order to dispute issuance of cheque accused has not placed any material, which could be believable by the Court to rebut the presumption cast in favour of the Complainant. The only defence that is taken

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by the accused is that the cheque was stolen from the house of the accused as there was friendly relationship between the parties.

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Learned counsel further contends that as there is no material evidence either oral or documentary produced by the accused to prove the said fact of cheque being stolen, trial Court has rightly come to the conclusion that the accused has failed to rebut the presumption and accordingly trial Court has rightfully convicted the accused for the offence punishable under Section 138 of NI Act, which is in accordance with law and the same does not require any interference by this Court. On these submissions he seeks to dismiss the petition and affirm the order passed by both the Courts.

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Learned counsel for petitioner – Complainant has relied on the judgment of the Hon’ble Apex Court in the case of R.VIJAYAN vs BABY AND ANOTHER reported in 2011 (4) KLJ 559 (SC), to canvas his arguments on awarding interest from the period of issuance of cheque, which would render justice to the Complainant.

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Having heard learned counsel for accused and learned counsel for Complainant, the point that arise for consideration before this Court are:

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(1) Whether petitioner – accused has rebutted the presumption as contemplated under Section 139 of NI Act?

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(2) Whether there is any illegality or perversity in the impugned order passed by both the Courts?

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In order to answer the above points It is necessary to have a cursory look at the facts and material evidence produced before this Court. It is not in dispute that Complainant and accused are well known to each other for several years and due to their good relationship Complainant gave hand loan of Rs.4 lakhs in order to improve cable business of the accused. Towards repayment of the said loan amount accused has given a cheque dated 12.09.2017 for a sum of Rs.4 lakhs and the said cheque came to be dishonoured for the reason insufficient funds. Though it is the contention of the accused that the said cheque – Ex.P1 was stolen from the house of the accused, no evidence or material is produced to prove the said fact. On the other hand, the cheque has

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been admitted to be that of accused. The signature on the cheque is also admitted. There is no issue or dispute with regard to issue of legal notice as he has already replied to it. The only defence that has been taken by the accused is that the said cheque has not been issued towards any existing legally recoverable debt and it is stolen from the house of the accused as they are having good cordial relationship between them and the same has been misused by the Complainant.

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In this view it is relevant to extract provisions of Section 138 of NI Act, which reads thus:

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“ DISHONOUR OF CHEQUE FOR INSUFFICIENCY, ETC., OF FUNDS IN THE

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ACCOUNT. —Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an

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agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for¹⁹ [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless—

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(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

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(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque,²⁰ [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

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(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

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Explanation.— For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.”.

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On presentation of the Complainant

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presumption in law as contemplated under Section 139 of NI Act comes into play in favour of the Complainant. Section 139 of NI Act, reads as follows:

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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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In view of the above presumption, the cheque is presumed to be issued for discharge in whole or part towards debt or other liability, unless the contrary is proved by the accused that there never exists any debt or legally recoverable liability and the same will have to be established by cogent material evidence. In the present case on hand merely by making statement that cheque at Ex.P1 was stolen, no cogent evidence either oral or documentary is placed before the Court. There is

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presumption acting in favour of the Complainant in view of Section 118 and 139 of NI Act. The burden of proof contrary that there exists any subsisting legally recoverable debt or liability is in favour of the accused and its rebuttal has to be proved by producing cogent material evidence but not by making suggestion or mere denial. In the present case on careful examination of entire material evidence on the case and documents produced no worthwhile material has been adduced by the accused to disprove the case and rebut the presumption in favour of the Complainant. Complainant has fulfilled necessary requirement to attract provisions of Section 138 of NI Act

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and in view of the non-rebuttal of presumption under Section 139 of NI Act to prove to the contrary that there exists legally recoverable debt, trial Court and Apex Court have rightly held that accused guilty and accordingly conviction of accused for the aforesaid offence is in accordance with law and facts and circumstance of the case. Hence, I answer Point No.1 in the negative as accused has not rebutted the presumption under Section 139 of NI Act.

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In view of the above, I do not find any illegality of perversity in the impugned order passed by both the Courts. I am also of the opinion that there is no ground made out to interfere with the judgment of both the Courts. Further, learned counsel for petitioner – accused fairly submits that the accused has made substantial payment towards the cheque amount. He has deposited a sum of Rs.3 lakhs as on today before the trial Court and the balance amount due has to be paid is only Rs.1,40,000/-, which he is agreeable and willing to pay if one month time is granted.

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Such fair submission is appreciated and the same is placed on record.

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Nevertheless, the learned counsel for respondent – Complainant submits that the cheque was issued in the year 2017 and apart from awarding additional amount of Rs.20,000/- by the trial Court no excess amount has been awarded. He relies on the judgment of R.VIJAYAN, stated supra, impressing upon this Court to award reasonable amount as compensation / interest, as the Complainant has not had the benefit of

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getting any profit out of the said amount, which he had given to accused.

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Having considered the above submissions of

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both the learned counsel, I pass the following order:

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ORDER

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(1) Revision Petition is partly allowed.;

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(2) Judgment of conviction passed by the Principal Civil Judge and JMFC, Haveri in CC No.61/2018 and confirmed by I Addl. District and Sessions Judge, Haveri in Crl. A. No.17/2018, are up held.;

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(3) The sentence imposed on the accused is modified as under:

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(a) Petitioner – accused is sentenced to pay a fine of Rs.4,50,000/- (Rupees four lakh fifty thousand only);

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(b) Out of the said fine amount petitioner is ordered to pay a sum of Rs.4,17,000/- to the respondent – Complainant as compensation and balance amount of Rs.23,000/- shall be deposited to the

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account of the State to be towards

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expenses.;

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(c) In default of payment of fine amount, petitioner – accused shall undergo simple imprisonment for a period of six months.;

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(d) As the petitioner – accused has already deposited a sum of Rs.3 lakhs before the trial Court, the said amount shall be deducted in the fine amount and the trial Court is directed to release the said amount in favour of the respondent – complainant.;

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(e) Petitioner – accused shall pay the balance amount within two months from today.;

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(f) It is noticed that petitioner had already deposited a sum of Rs.20,000/- towards fine amount.

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Sd/-

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JUDGE

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MRK VK

Pradeep S/O Mahadevappap Hulasangi @ Bosale v. Lohit S/O Vijaykumar Kudari

Case brief

What is this about?

What did the court decide?

Pradeep S/O Mahadevappap Hulasangi @ Bosale v. Lohit S/O Vijaykumar Kudari

Case brief

What is this about?

What did the court decide?

What the court decided

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