Partly allowed

Sri M E Shivanna v. Smt Dhanalakshmi

Karnataka HC9 Dec 2020CRL.RP/543/2017

Case brief

AI extract

What is this about?

The Karnataka High Court disposed of a criminal revision petition against conviction and sentence for cheque dishonour under Section 138 NI Act. Upholding the conviction due to failure to rebut statutory presumption, the Court modified the sentence to a fine of Rs. 2,10,000 in lieu of six months' imprisonment.

What did the court decide?

The order of conviction confirmed; sentence modified to a fine of Rs. 2,10,000 in lieu of imprisonment; if fine not paid within two months, 30 days simple imprisonment.

Sri M E Shivanna Vs Smt Dhanalakshmi — Cheque Dishonour | Karnataka HC (2020)

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Crl.R.P.No.543/2017

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 09^TH DAY OF DECEMBER 2020

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BEFORE

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THE HON’BLE MRS. JUSTICE K.S.MUDAGAL

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CRIMINAL REVISION PETITION No.543/2017

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BETWEEN :

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SRI M.E.SHIVANNA AGED ABOUT 52 YEARS SRI NARASIMHA SWAMY HIGH SCHOOL ANEKANNAMBADI VILLAGE HALLI MYSURU HOBLI HOLENARASIPURA TALUK HASSAN DISTRICT – 573 211 … PETITIONER (BY SRI K.R.LINGARAJU., ADVOCATE)

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AND :

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SMT.DHANALAKSHMI W/O G.CHANDRASHETTY AGED ABOUT 37 YEARS R/AT III^RD CROSS, KIKKERI ROAD K.R.PET TOWN MANDYA DISTRICT – 571 438 …RESPONDENT

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(BY SRI RAVI KUMARA B.R., ADVOCATE)

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THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W SECTION 401 OF CR.P.C. PRAYING TO SET ASIDE THE ORDER OF CONVICTION AND SENTENCE DATED 03.01.2015 PASSED BY THE CIVIL JUDGE AND JMFC, K.R.PET IN C.C.NO.263/2007 AND TO SET ASIDE THE ORDER DATED 27.10.2016 PASSED BY THE III ADDITIONAL DISTRICT AND SESSIONS JUDGE, MANDYA (SITTING AT SRIRANGAPATANA) IN CRL.A.No.5003/2015.

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Crl.R.P.No.543/2017

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THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 12^TH NOVEMBER 2020, COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE COURT THROUGH VIDEO CONFERENCE MADE THE FOLLOWING:

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O R D E R

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Aggrieved by the orders of conviction and sentence passed against him for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘the Act’ for short), the petitioner has preferred the above revision petition.

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The respondent presented the cheque Ex.P1 dated 09.08.2006 for Rs.1,50,000/- purportedly issued by the petitioner drawn on Canara Bank, Holenarasipura Branch in her favour for realisation. The said cheque was dishonoured as per the bank’s memo Exs.P2 and P3 for want of sufficient funds.

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Thereafter, the respondent got issued the statutory notice dated 22.12.2006 as per Ex.P4 to the petitioner calling upon him to pay the cheque amount within two weeks or else to face the prosecution. The petitioner did not pay the cheque amount. Therefore,

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Crl.R.P.No.543/2017

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she filed the complaint before the Civil Judge and JMFC, K.R.Pet seeking prosecution of the petitioner for the offence punishable under Section 138 of the Act.

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The trial Court on taking cognizance, registered the case in C.C.No.263/2007, summoned the petitioner and tried him. In the trial, the petitioner admitted that the cheque Ex.P1 pertains to his account and it bears his signature. He contended that he had borrowed only Rs.60,000/- and as security for the said amount, blank cheque Ex.P1 was issued. He further claimed that out of said Rs.60,000/-, he repaid Rs.52,500/- and he was due to pay only Rs.7,500/-. He further claimed that despite his several requests to receive the balance amount and return the cheque, the complainant did not return the cheque and misusing the said cheque, she has filed the false implant.

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After trial and on hearing the parties, the trial Court rejected the defence of the petitioner and convicted him for the offence punishable under Section 138 of the Act and sentenced him to simple

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Crl.R.P.No.543/2017

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imprisonment of six months and awarded compensation of Rs.2,00,000/- to the respondent.

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The petitioner challenged the said order of conviction and sentence in Crl.A.No.5003/2015 before the III Additional District & Sessions Judge, Mandya sitting at Srirangapattana. The First Appellate Court by the impugned judgment and order dismissed the appeal and confirmed the order of conviction and sentence passed by the trial Court.

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The trial Court and the First Appellate Court held that once the petitioner admitted his signature on Ex.P1 and that the cheque pertains to his account, the complainant is entitled to the benefit of presumption under Section 139 of the Act to the effect that the cheque was issued towards discharge of debt/liability and the petitioner/accused has failed to rebut the said presumption.

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Sri K.R.Lingaraju, learned Counsel for the petitioner reiterating the grounds of the petition contended that the trial Court and the First Appellate

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Crl.R.P.No.543/2017

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Court over looked the admissions of PW.1 in her evidence and the documentary evidence Exs.D1 to D4. Therefore, he submitted that the impugned orders of conviction and sentence suffer perversity. He further submitted that the Courts below were not justified in raising the presumption under Section 139 of the Act, though the respondent did not prove her lending capacity. In support of his contention, he relied upon the judgment of the Hon’ble Supreme Court in Basalingappa vs. Mudibasappa¹

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Per contra, Sri Ravi Kumara.B.R, learned Counsel for the respondent sought to justify the impugned orders of conviction and sentence on the ground that since the petitioner admitted his signature on the cheque and that the cheque belongs to his account, the trial Court and the First Appellate Court rightfully invoked the presumption under Section 139 of the Act. He further submitted that since the petitioner himself admitted that he had borrowed loan from the respondent, the Courts below were justified in drawing

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1 (2019) 5 SCC 418

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Crl.R.P.No.543/2017

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the presumption under Section 139 of the Act that the respondent has lent the loan. He further submitted that the petitioner failed to rebut the statutory presumption by leading cogent and consistent evidence and Exs.D1 to D4 were apparently manipulated.

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In support of his arguments, he relied upon the following judgments:

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M/s.Shree Daneshwari Traders v. Sanjay Jain and Anr.²

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Rohitbhai Jivanlal Patel v. State of Gujarat and Anr³

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H.G.Nagaraja v. H.Suresh Naika⁴

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This being revision petition against the concurrent findings of the Courts below unless it is shown that the impugned orders of conviction and sentence suffer illegality, impropriety or incorrectness, this Court cannot interfere with the matter.

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According to the petitioner, the illegality, impropriety or incorrectness in the orders is that the

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2 2019 Cri.L.J.4722

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3 2019 Crl.L.J.2400

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4 2019 (4) AKR 562

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Crl.R.P.No.543/2017

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Courts below did not appreciate the evidence properly and the orders suffer perversity. This Court has to find out whether the approach of the trial Court and the First Appellate Court in appreciating the evidence suffer perversity.

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Reg. Lending capacity:

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Admittedly, the petitioner was the secretary

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of Sri Narasimhaswamy High School and the respondent was working in the said high school as a teacher. Thus, the petitioner and the respondent were well acquainted with each other. The respondent claimed that she lent Rs.1,50,000/- to the petitioner in the first week of July 2006 on his request and assurance that he will repay the loan within one month. She further claimed that after one month when she insisted for repayment of loan, the petitioner issued the cheque Ex.P1.

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Whereas the petitioner claimed that loan borrowed by him was only Rs.60,000/-, out of that he repaid Rs.52,500/- and for security for that loan transaction he issued blank cheque and misusing that

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cheque, the respondent filed the false complaint against him.

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Neither in the cross-examination of PW.1

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nor in his own evidence, he asserted that the respondent lacked lending capacity. She was only asked where she pooled the funds. She stated that amount of Rs.1,50,000/- consisted of the money pooled by her father and contributed by her maternal uncle etc. Even that assertion of PW.1 was not denied in the crossexamination.

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The petitioner admitted that the respondent

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was working in his institution as teacher. In her evidence respondent/PW.1 stated that prior to she joining the services in the school, she was doing tuitions and tailoring work. That was not disputed.

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Having regard to such evidence, the petitioner’s own case that respondent had lent him Rs.60,000/- and the statutory presumption under Section 139 of the Act, the Courts below accepted the

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lending capacity of the respondent. This Court does not find any perversity in such finding.

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Reg. the proof of liability under Ex.P1 the cheque:

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As already pointed out, the petitioner admitted that the cheque Ex.P1 pertains to his account and it was signed by him. But his contention was that he had borrowed only Rs.60,000/- and out of that he had already paid substantial amount. Under such circumstances, the presumption under Section 139 of the Act arises that the cheque was issued towards discharge of debt/liability. Therefore, the petitioner was required to rebut the said presumption.

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To rebut the presumption under Section 139 of the Act, the petitioner produced Ex.D1 undated acknowledgement purportedly given by the respondent regarding receipt of Rs.52,500/-, Ex.D2 declaration dated 01.08.2003 said to be executed by the respondent, Ex.D3 undated confirmation letter purportedly executed by the respondent regarding receipt of Rs.52,500/- and Ex.D4 the undertaking letter

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dated 01.08.2003 said to be executed by the respondent to the effect that she has received the cheque for having lent loan of Rs.50,000/- to Basavaraj Physical Training Teacher and Rs.10,000/- to the petitioner.

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It is no doubt true that in the crossexamination of PW.1, the respondent stated that the petitioner obtained Ex.D1 assuring that he will pay Rs.50,000/-. But according to her he did not pay any money under that. The respondent disputed the other documents. It is material to note that the case of the petitioner regarding repayment was not very consistent. In Exs.D1 to D3, the petitioner claims to have returned Rs.52,500/- to the respondent. But in his affidavit filed in lieu of chief examination, he states that he had repaid Rs.52,000/- to the respondent.

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The petitioner claims that he paid Rs.50,000/- to the respondent in the presence of one Basavaraj, a Physical Training Teacher in his institution. But he did not choose to examine him. He further

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admits that in his reply to Ex.P4 the statutory notice, he has not referred to Exs.D1 to D4. If Exs.D1 to D4 were executed by the respondent prior to the notice, in the ordinary course, he should have denied the availment of loan of Rs.1,50,000./- and set up defence of Exs.D1 to D4. At least the said documents could have been produced before the Court with the copy of such reply.

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Ex.D2 is dated 01.08.2003, whereas the cheque Ex.P1 is dated 09.08.2006. The petitioner did not examine the bank authorities to show that Ex.P1 pertains to the cheque book issued to him in the year 2003.

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Exs.D2 and D3 state that the respondent has paid Rs.50,000/- to the petitioner and Rs.10,000/to the Physical training master Basavaraj for the development of their educational institute i.e. Shri Narasimha Swamy High School. Even in those documents words ‘SÁ°’ means blank and ‘F’ means this

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was interpolated in the place meant for cheque. The

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said documents do not refer to any loan transaction between the petitioner and the respondent as deposed by him.

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Even Ex.D4 alleged undertaking letter refers to the payment of Rs.50,000/- to Basavaraj and Rs.10,000/- to the petitioner. The petitioner admitted in his evidence that the cheque number in Ex.D4 is altered. Despite Exs.D2 to D4 referring specifically to Basavaraj, Ex.D2 referring to the witnesses Sukumar, Girigowda, Mahesh, Roopa and other teachers in the school, the petitioner did not choose to examine them to prove that the said documents related to loan transaction of Rs.60,000/- and also to prove the documents Exs.D1 to D4.

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The very fact of the petitioner not referring to Exs.D1 to D4 in his reply letter creates doubt about they being in existence before their production before the Court. The above said circumstances coupled with the suspicion surrounding of Exs.D1 to D4 did not inspire confidence of the trial Court and the First

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Appellate Court to accept the theory of the petitioner availing loan of Rs.60,000/- and repaying Rs.52,500/-. Therefore, the Courts below rightly held that the petitioner has failed to rebut the presumption under Section 139 of the Act.

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Having regard to the aforesaid facts and circumstances of the present case, the judgment in Basalingappa’s case relied upon by the learned counsel for the petitioner does not apply.

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In M/s.Shree Daneshwari Traders’s case referred to supra the Hon’ble Supreme Court held that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record, such facts and circumstances upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non-existence was so

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probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. It was held that only then the burden reverses to the complainant regarding the proof of existence of the consideration.

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Similarly, in Rohitbhai Jivanlal Patel’s case referred to supra , it was held that if the accused admits his signature on the cheque and that the cheque was drawn in favour of the complainant, all the basic ingredients of Sections 118 and 139 of the Act arise. In such event, the Court has to hold that the cheque was issued by the accused towards discharge of existing debt/liability. Unless the accused discharges that onus and shows that preponderance of probabilities are tilting in his favour, doubt on the case of the complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused.

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In the light of the discussions made above

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and the judgments of the Hon’ble Supreme Court referred to supra, this Court does not find any illegality,

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impropriety or incorrectness or perversity in the impugned orders of conviction passed by the Courts below.

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Reg. Sentence:

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The trial Court has sentenced the petitioner to simple imprisonment of six months and also awarded compensation of Rs.2,00,000/- to the complainant for the offences punishable under Section 138 of the Act. Section 138 of the Act is punishable with imprisonment upto 2 years and fine which may extend to twice the amount of the cheque or with both. Out of the fine amount, the Court can award compensation to the complainant.

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The cheque amount in this case was Rs.1,50,000/-. The trial Court has not imposed any fine in addition to the compensation amount. The petitioner has faced the proceedings since 2007 i.e. for almost 13 years. He is said to be running a school. Under such circumstances, this Court is of the considered opinion that interest of justice will be met by modifying the

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sentence of imprisonment to the sentence of fine. Therefore, the petition is partly allowed.

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The impugned order of conviction passed by the trial Court and upheld by the First Appellate Court is hereby confirmed. The impugned order of sentence is modified as follows:

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Petitioner/accused is sentenced to fine of Rs.2,10,000/-. Out of the fine amount, Rs.2,00,000/shall be paid to the complainant as compensation and Rs.10,000/- shall be remitted to the State. In default to pay the fine amount within two months from the date of receipt of copy of this order, the petitioner shall undergo simple imprisonment for 30 days.

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KSR

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Sd/JUDGE

Sri M E Shivanna v. Smt Dhanalakshmi

Case brief

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Sri M E Shivanna v. Smt Dhanalakshmi

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