Dismissed

U Mohammad Ashraf v. B H a Ravi

Karnataka HC9 Aug 2021CRL.A/11/2012

Case brief

AI extract

What is this about?

Criminal Appeal against acquittal in a cheque dishonour case under Section 138 NI Act. The High Court upheld the acquittal, holding that the complainant failed to prove the underlying transaction or forged cheque, thus preventing the Section 139 presumption from attracting. The cheque was deemed misused as the underlying debt from a related case had been satisfied.

What did the court decide?

The criminal appeal was dismissed; the acquittal of the respondent/accused was upheld.

U Mohammad Ashraf Vs B H a Ravi — Cheque Dishonour | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 09^TH DAY OF AUGUST 2021

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BEFORE

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THE HON’BLE MR. JUSTICE SREENIVAS HARISH KUMAR

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CRIMINAL APPEAL No.11 OF 2012

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BETWEEN

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U.Mohammad Ashraf S/o U.Abdul Khadar Aged about 30 years, Resident of Ujire Bettu, House, Karaya Village, Kalleri Post, Belthangady Taluk, D.K.District.

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…Appellant

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(By Sri A.V.Gangadharappa, Advocate)

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AND

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B.H.A.Ravi S/o M.S.Henry Kutinha, Aged about 37 years, Resident of Kankere Nilaya, Balehonnur, Mata Post, Narasimharajapura Taluk, Chikkamagaluru District.

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…Respondent

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(By Sri S.P.Ramesha, Advocate)

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This Criminal Appeal is filed under Section 378(4) of Cr.P.C., praying to set aside the impugned judgment and order dated 04.11.2011 passed by the Civil Judge and JMFC., Belthangady, D.K., in C.C.No.27/2009 acquitting the respondent/accused for the offence punishable under Section 138 of N.I.Act.

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This Criminal Appeal coming on for hearing this day, through video conferencing, the court delivered the following:

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JUDGMENT

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The complainant has preferred this appeal under

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Section 378 of Cr.P.C. questioning the correctness of

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the judgment of Judicial Magistrate, First Class, Belathangadi in Crl. Case No.27/2009 acquitting the accused of the offence punishable under Section 138 of Negotiable Instruments Act (‘N.I.Act’ for short).

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I have heard the arguments of Sri. A.V. Gangadharappa, learned counsel for the appellant/complainant and Sri. S.P.Ramesh for

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respondent/accused.

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The appellant (referred to as complainant

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hereafter) lodged a complaint under Section 200 Cr.P.C. against the respondent (referred to as accused hereafter) as the cheque bearing No.61797 issued by

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the respondent for Rs.50,000/- and drawn on Karnataka Bank, Balehonnur was dishonoured for want of sufficient funds in his account. The trial court, for acquitting the accused, arrived at conclusions that there was no privity of contract between the parties,

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that the complainant’s case appeared to be improbable because his father also claimed to have given money to the accused under two cheques which the complainant had given and that in C.C.No.794/2007, initiated by the complainant’s father, the money due by the accused had been paid and thus there was compounding of offence. The trial court has also held that the complainant clearly admitted in the cross-examination that he did not know the accused and this answer would improbablize

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his case that he had lent money to the accused.

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The learned counsel for the complainant, Sri.

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A.V. Gangadharappa argued that the trial court has

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not properly appreciated the evidence of PW.1, the complainant. Ex.P.7 clearly shows encashment of two cheques for Rs.25,000/each issued by the complainant to the accused. In connection with repayment of this loan, the accused issued the cheque in question for Rs.50,000/- and it was dishonoured. The complainant issued legal notice to the accused and then initiated action within time. But the reasonings given by the trial court for acquitting the accused do not sustain to reason. His argument was that the complainant initiated action in respect of the money that he had lent to the accused and therefore there existed a legally enforceable debt. The transaction of the father of the complaint with the accused was different and any settlement in the nature of compounding of the offence in the complaint made by the father should not have been considered

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by the trial court for acquitting the accused.

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Therefore it is clear that the trial court has not properly appreciated the evidence. He also submitted that because Ex.P.7 shows encashment of the cheques issued by the complainant, it indicates that a loan transaction existed and thereby the presumption under Section 139 of N.I.Act can be drawn in favour of the complainant, but the trial court has erred in not drawing presumption. Therefore it is his argument that this appeal should be allowed and the accused, convicted and punished according to law.

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Sri. S.P.Ramesh, learned counsel for the accused argued that there existed no transaction between the accused and the complainant and this becomes amply clear from the answers that the complainant i.e., PW.1 has given in his crossexamination. Therefore it cannot be said that the accused was under obligation to discharge a debt and in connection with the same, he had issued a cheuqe.

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He further argued that the evidence shows existence of a transaction of purchase of timber and in that connection, the accused had issued three cheques to the complainant’s father. This is clearly admitted by PW.1. In one case, i.e., C.C.No. 795/2007, the accused was convicted in relation to dishonour of a cheque issued by him for Rs.1,00,000/-. The father of the complainant had lodged one more complaint i.e., C.C.No.794/2007 in relation to dishonour of the cheque for Rs.50,000/- issued by the accused and this complaint was closed because of payment made by the accused. It was in respect of payment made by complainant under two cheques for Rs.25,000/- each, the complainant’s father filed C.C.No.794/2007 and since it was closed, there was nothing to be paid by the accused to the complainant. Actually the accused had issued three blank cheques to the complainant’s father and after closing C.C.No.794/2007, the

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complainant misused one of the cheques to make a complaint against the accused. The trial court having noticed all these aspects came to right conclusion that the accused should be acquitted and there are no infirmities in the said judgment. The appeal is therefore to be dismissed.

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After hearing both sides, my findings are:

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Ex.P.1 is the dishonoured cheque issued by the

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accused. There is no dispute about issuing legal notice and initiating action under Section 138 of N.I.Act within the prescribed time. Therefore there is no need to refer to these aspects. The controversy is whether the accused issued the cheque for discharging any debt said to be due by him to the complainant.

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According to Section 138 of N.I.Act, dishonour of a cheque issued in connection with

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discharging either wholly or partly, any debt or liability, for insufficient funds in the account of, or if the cheque amount exceeds the balance found in the account of the drawer of the cheque, is an offence. That means, in the legal parlance there must be a legally enforceable debt. The burden is on the complainant to prove the transaction giving rise to a liability for the discharge of which the accused issued a cheque. The moment the complainant provides proof in relation to the transaction giving rise to the liability, presumption under Section 139 of the N.I.Act arises and it continues till it is suitably rebutted by the accused. If the accused fails to rebut it, the presumption becomes absolute. But to draw presumption, the complainant must clearly state in his complaint about the transaction giving rise to liability and prove it. If the complainant’s states nothing in the complaint about transaction and provides no proof

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for it, presumption cannot be drawn. Mere issuance of

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a cheque by the accused and its dishonour subsequently, in the absence of an averment in the complaint and proof for it regarding the liability, does not lead to drawing presumption under Section 139 of

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N.I.Act.

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In this case, the complainant has not stated anything at all regarding the transaction in respect of which he issued cheques to the accused. In his examination-in-chief also, he did not speak about the transaction and only in the cross-examination he admitted that the transaction of timber purchase was between his father and the accused. He has very clearly answered in the cross-examination that no transaction took place between him and the accused, that the accused had business transaction with his father and that the accused had not entered into any transaction with him. Though he has further

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answered that the accused had telephoned to him for money and that he gave two cheques for Rs.25,000/each, his further answers show that he gave two cheques to his father and that his father handed over those two cheques to the accused. Therefore it is clear, as has been observed by the trial court, that there was no direct transaction between the complainant and the accused. Probably the father of the complainant had transaction with the accused and in that connection, the father might have got issued the cheques through the complainant.

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It is elicited from PW.1, the complainant that

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his father had made a criminal case, C.C.No.794/2007 against the accused in relation to dishonour of cheque for Rs.50,000/- and his father received a sum of Rs.50,000/-. He might have denied the suggestion that he had brought a false case against the accused by misusing one cheque out of the three issued by the

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accused to the complainant’s father as security, but this answer is to be appreciated in the light of some questions posed to the accused i.e., DW.1 during his cross-examination. The suggestions given to DW.1 are that there was a business transaction between him and Khadar, i.e., the father of the complainant and in that connection three cheques were issued by the accused, that out of three cheques, one cheque was for Rs.1,00,000/-, that two other cheques were for Rs.50,000/- each, and that the timber purchase agreement was produced in C.C.No.795/2007. DW.1 might have denied all these suggestions, but what these suggestions indicate are that they are the definite and specific case of the complainant. If really the accused owed an amount of Rs.50,000/- to the complainant in connection with timber purchase transaction, nothing prevented the complainant from briefly stating about that transaction in the complaint

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and providing proof for it. The argument of Sri. A.V. Gangadharappa was that the complainant’s transaction with the accused was independent and different, nothing to do with father’s business. If this argument is to be accepted, there must be an averment to that effect in the complaint and it must have been established. Nothing is stated in the complaint.

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It has been elicited from PW.1 that complainant’s father had also lodged a complaint against the accused by filing a complaint in C.C.No.794/2007 and in that case, the accused made payment of Rs.50,000/- to the father. The trial court has observed that in C.C.No.794/2007, complainant’s father averred in his complaint that he made payment of Rs.50,000/- to the accused under two cheques which the complainant has also referred to in his complaint i.e., the case on hand. In connection with

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the transaction which has been satisfied, if the complainant initiated one more complaint, it is not maintainable and deserves to be dismissed. Sri.A.V. Gangadharaiah might have argued that the father’s transaction is entirely different and the compounding of the offence in C.C.No.794/2007 cannot be considered, but these aspects have been brought out from PW.1 in the cross-examination; they cannot be simply ignored. If it appears that the cheque has been misused by the complainant, the court cannot simply ignore that aspect. Therefore I do not find any infirmity in the judgment of acquittal passed by the trial court. This appeal deserves to be dismissed and ordered accordingly.

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Sd/JUDGE

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U Mohammad Ashraf v. B H a Ravi

Case brief

What is this about?

What did the court decide?

U Mohammad Ashraf v. B H a Ravi

Case brief

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What did the court decide?

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