Allowed

Ramesh S/O. Mahadevappa Ajjodi v. Kamodkumar Kanchan

Karnataka HC9 Dec 2022CRL.A/2640/2012

Case brief

AI extract

What is this about?

This High Court criminal appeal set aside the trial court's acquittal in cheque dishonour trials. The court held the trial court erred in ignoring the Memorandum of Understanding (Ex.P1) proving the debt, rejecting the accused's mere denial, and applied the presumption under Section 139 of the NI Act to convict the accused.

What did the court decide?

The appeals were allowed; the acquittal was set aside; the accused was convicted under Section 138 of the NI Act and sentenced to a fine of Rs. 3,50,000.

Ramesh S/O. Mahadevappa Ajjodi Vs Kamodkumar Kanchan — Cheque Dishonour | Karnataka HC (2022)

¶1

¶2

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶3

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

¶4

DATED THIS THE 9^TH DAY OF DECEMBER, 2022

¶5

BEFORE

¶6

THE HON'BLE MR JUSTICE S.RACHAIAH CRIMINAL APPEAL NO. 2639 OF 2012 (A)

¶7

C/W

¶8

CRIMINAL APPEAL NO. 2640 OF 2012 CRIMINAL APPEAL NO. 2639 OF 2012:

¶9

BETWEEN:

¶10

RAMESH S/O. MAHADEVAPPA AJJODI,

¶11

AGE: 44 YEARS, R/O. K.V.K QUARTERS, D-1, UAS COMPUS, KRISHINAGAR, DHARWAD.

¶12

…APPELLANT

¶13

(BY SRI. J. S. SHETTY., ADVOCATE) AND:

¶14

KAMODKUMAR KANCHAN, AGE: 35 YEARS, R/O. PLOT NO. S-3, SILVER STAR APARTMENT, BEHIND HANS HOTEL, NEAR UNAKAL CROSS, KALYAN NAGAR, HUBLI.

¶15

…RESPONDENT

¶16

(BY SRI.SHARAD M. PATIL., ADVOCATE)

¶17

THIS CRIMINAL APPEAL IS FILED U/S 378 OF CR.P.C. SEEKING THAT THE ORDER DATED 28.03.2012 PASSED BY THE PRL. CIVIL JUDGE & PRL. JMFC COURT, DHARWAD, IN C.C.NO.50/2008, BE SET ASIDE AND RESPONDENT MAY BE CONVICTED FOR THE OFFENCES P/U/S 138 OF N. I. ACT.

¶18

CRIMINAL APPEAL NO. 2640 OF 2012

¶19

BETWEEN:

¶20

RAMESH S/O. MAHADEVAPPA AJJODI, AGE: 44 YEARS, OCC: SERVICE AT U.A.S. DHARWAD,

¶21

¶22

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶23

R/O. PLOT NO.207, II MAIN, KUMARESHWAR NAGAR, P.B. ROAD, DHARWAD. PRESENTELY RESIDING AT K.V.K QUARTERS, D-1, UAS COMPUS, KRISHINAGAR, DHARWAD.

¶24

…APPELLANT

¶25

(BY SRI. J. S. SHETTY., ADVOCATE) AND:

¶26

KAMODKUMAR KANCHAN,

¶27

AGE: 35 YEARS, R/O. PLOT NO. S-3, SILVER STAR APARTMENT, BEHIND HANS HOTEL, NEAR UNAKAL CROSS, KALYAN NAGAR, HUBLI.

¶28

…RESPONDENT

¶29

(BY SRI.SHARAD M. PATIL., ADVOCATE)

¶30

THIS CRIMINAL APPEAL IS FILED U/S 378 OF CR.P.C. SEEKING THAT THE ORDER DATED 28.03.2012 PASSED BY THE PRL. CIVIL JUDGE & PRL. JMFC COURT, DHARWAD, IN C.C.NO.155/2008, BE SET ASIDE AND RESPONDENT CONVICTED FOR THE OFFENCES P/U/S 138 OF N. I. ACT.

¶31

THESE APPEALS COMING ON FOR FURTHER HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

¶32

JUDGMENT

¶33

Criminal Appeal No.2639/2012 and Criminal Appeal No.2640/2012 are filed by the common appellant, being aggrieved by the judgment and order of acquittal in C.C. No.50/2008 dated 28.03.2012 and C.C.No.155/2008 dated 28.03.2012 respectively, on the file of learned Prl. Civil Judge and Prl. JMFC, Dharwad.

¶34

¶35

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶36

For the sake of convenience, the rankings of the

¶37

parties would be referred to as per their rankings before the Trial Court.

¶38

The accused was doing real estate business in the name and style of “M. K. Associate Builder and Developer”. The accused is a GPA holder of seven other persons, entered into an agreement of sale with the wife of complainant by name Smt.Uma W/o. Ramesh Ajjodi on 17.01.2006 in respect of sale of plot bearing Nos.107 to 123 (17 plots) measuring 18 guntas 1.25 annas in Block No.58C of Tarihal village, for a sum of Rs.10 lakhs. On the same day, the wife of the complainant paid Rs.7 lakhs to the accused and as per the agreement, the sale should have been completed within 20 months from the date of its execution by receiving the balance consideration. Due to some unavoidable circumstances, the said agreement of sale has been cancelled and the accused agreed to repay the earnest money which he has paid at the time of agreement of sale. As per the version of the complainant, the accused had to pay Rs.2,60,000/- to the wife of the complainant as on 06.06.2007. For remaining balance, the accused had issued two cheques bearing No.006065 dated 20.08.2007 for a sum of

¶39

¶40

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012 Rs.1,60,000/- and another cheque bearing No.006067 dated 03.09.2007 for a sum of Rs.1 lakh. When the said cheques were presented on the respective dates for encashment, the complainant has received a shara as ‘Account Closed’. Thereafter, the complainant issued the legal notice on 08.09.2007 and after the notice having been served, the complaint came to be lodged by the complainant.

¶41

To prove the case of the complainant, the complainant got examined two witnesses i.e., PW.1 and PW.2 and got marked Ex.P.1 to Ex.P.7. On the other hand, the accused examined himself as DW.1 and got marked Ex.D.1 and Ex.D.2.

¶42

The Trial Court after appreciating the oral and documentary evidence on record opined that, the complainant has failed to prove the legally enforceable debt or liability or therefore, acquitted the accused. Being aggrieved by the same, the complainant preferred these appeals.

¶43

Heard Sri. J. S. Shetty, the learned counsel for the

¶44

common appellant and Sri. Sharad M. Patil, learned AmicusCuriae for the common respondent.

¶45

¶46

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012 7. Sri. J. S. Shetty, learned counsel for the common

¶47

appellant submits that, the judgment and order of acquittal passed by the Trial Court is contrary to the facts and also the documents available on record. Therefore, the said judgment of acquittal is liable to be set aside. It is further submitted that, the accused has admitted the transaction with the complainant.

¶48

The learned counsel for the appellant submits that, the judgment and order of the Trial Court is contrary to the facts and also documents available on record. Therefore, the said judgment of acquittal is liable to be set.

¶49

It is further submitted that he has admitted the transaction with the complainant and also entered into memorandum of understanding which is marked as Ex.P1 in C.C.No.50/2008 and Ex.P7 in C.C.No.155/2008. However, the

¶50

Trial Court has ignored in considering the said documents and also admission made by the accused and passed the impugned judgment which are liable to be set aside.

¶51

It is further submitted that the issuance of cheque

¶52

is admitted. The Trial Court ought to have raised the presumption which is envisaged under Sections 139 and 118 of

¶53

¶54

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶55

the Act. Having submitted thus, the learned counsel for the appellant prays to allow the appeals.

¶56

Per contra , Sri. Sharad M.Patil, the learned Amicus curiae representing the common respondent submits that the order of acquittal is justified for the reason that the said transaction has taken place between the wife of the complainant and the accused. However, there was no transaction taken place between the complainant and the accused. Though there was no transaction, keeping Ex.P1 and claiming liability is not appropriate and the Trial Court rightly considered the facts of the case and acquitted the accused.

¶57

It is further submitted that, the accused entered

¶58

into the witness box and stated that, he was not a civil contractor and he was not doing any real estate business and also he had not entered into any agreement of sale with the wife of the complainant. Further, he has stated that, no such cancellation of any agreement ever taken place between himself and the wife of the complainant. He further stated that, after cancellation of the sale agreement he entered into agreement with the accused as per Ex.P1 and admitted the

¶59

¶60

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶61

liability. Therefore, the Trial Court has rightly appreciated the evidence of PW1 and acquitted the accused.

¶62

Having heard the learned counsel for the parties

¶63

and perused the documents available on record, the points which arise for my consideration are :-

¶64

i) Whether the judgment and order of acquittal passed by the Trial Court is justified?

¶65

ii) Whether the appellant has made out grounds to interfere with the judgment and order of acquittal passed by the Trial Court in both the cases?

¶66

This Court being a First Appellate Court, in order to

¶67

analyse the evidence and also averments made in the documents, it is necessary to go in detail both on facts and law.

¶68

Before adverting to the facts of the case it is necessary to go on with the principles of Negotiable Instrument Act. Section 139 mandates that, unless the contrary is proved, it is to be presumed that, the holder of a cheque received the

¶69

cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.

¶70

¶71

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶72

However, the presumption is rebutable by proving to the contrary. Section 139 introduces an exception to the general role as to the burden of proof and shifts the onus on the accused to prove by cogent evidence that there was no debt or liability. Mere denial or rebutable by the accused was not enough.

¶73

Keeping in mind the principles and precedents of the dictum of the Hon’ble Supreme Court, this Court being a First Appellate Court in order to reassess the evidence of all the witnesses and also apply the proper law of the case. It is necessary to evaluate the evidence.

¶74

It is the case of the complainant that, there was a transaction between his wife Smt. Uma Ramesh and the accused in respect of the said plots situated at Tarihal village, Hubli. There was an agreement entered into between the accused and wife of the complainant and the said agreement has been cancelled due to some unavoidable circumstances. As such, the accused agreed to return the earnest money which he has availed in respect of the said agreement. After cancellation of the sale agreement, the accused had paid Rs.7,00,000/- to the wife of the complainant and he was due a sum of

¶75

¶76

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶77

Rs.3,00,000/-. For the said amount, the accused had issued

¶78

two cheques one is for Rs.1,00,000/- and another one is for a sum of Rs.1,60,000/-.

¶79

In addition to the cheques, the accused executed a loan agreement which is marked as Ex.P1. The averments of the said agreement clearly discloses that the details of the disputed cheques and its numbers and amounts have been mentioned. Though the accused denied entire transaction, he has not chosen to disprove the contention of the complainant.

¶80

The Trial Court acquitted the accused on the ground that the complainant has failed to establish the transaction with the accused and also failed to show the said transaction in his income tax returns. Be that as it may, once again, it is necessary to refer the principles under the N. I. Act. It is well settled that in case of dishonor of the cheque, the presumption mandated under Section 139 of N.I. Act, that the holder of the cheque received the cheque for legally enforceable debt or liability unless the contrary is proved. Admittedly, the complainant has produced Ex.P1-memorandum of agreement along with the cheques and proved the case. The recitals of Ex.P1 might be different. However, the number of the cheques

¶81

10 -

¶82

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶83

and amount are accurate and clear. It is also well settled

¶84

principle of law that to rebut the presumption raised under Section 139 of NI Act, mere denial by the accused would not sufficient to rebut the presumption. It is relevant to refer the contents of the memorandum of understanding which is marked as Ex.P1. The said Ex.P1 which reads thus:-

¶85

“AGREEMENT OF UNDERSTANDING

¶86

This agreement is made of 6^th June 2007 Between:

¶87

1. Shri. Ramesh S/o Mahadevappa Ajjodi Occ: Service resident of Kumareshwar Nagar, Dharwad-08

¶88

Shri Kamod Kumar Kanchan S/o Ravindra Jha Age: 30 years, Occ: Business R/o Silver Star Apartment S-3, Vidhyanagar, Hubli-31. That party 1 and 2 have executed that agreement as under:-

¶89

The party No.2 have availed hand loan for his family need from party no.1 party no.1 has collected the said amount from his friends and relatives and given to party no.2. The sum of Rs.2,60,000/(Rupees Two Lackhs Sixty Thousand Only) By cash without any interest/any profit.

¶90

That party no.2 is returning the amount

¶91

through two cheques no.1 cheque dated: 20-08-2007

¶92

11 -

¶93

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶94

cheque of Centurion Bank having Cheque No.006065

¶95

for a sum of Rs.1,60,000-00 (Rupees One Lakh Sixty Thousand) and another cheque dated 03.09.2007 of Centurion bank having Cheque no.006067 for the Sum of Rs.1,00,000/- (Rupees One Lakh only)

¶96

The party no.2 assures the cheque will be duly honoured when presented on that date hence this agreement of understanding.

¶97

There are no any Transaction between party 1 and 2 as on this day (It means there is no giving an taking of any things”

¶98

Thus, it is clear from the above mentioned agreement, the accused has executed the said agreement in lieu of the balance which he was to pay. Therefore, the complainant has proved the liability against the accused by leading cogent evidence. This fact has not been considered by the Trial Court while appreciating the evidence. Therefore, the finding of facts recorded by the Trial Court found to be inappropriate and erroneous and the same is liable to be set aside.

¶99

12 -

¶100

CRL.A No. 2639 of 2012 C/W CRL.A No. 2640 of 2012

¶101

In view of the observations made above, the points

¶102

which arose for my consideration are answered as:

¶103

1. Point No.1: In the negative

¶104

1. Point No.2: In the affirmative.

¶105

Hence, I proceed to pass the following:

¶106

ORDER

¶107

a) The Appeals filed by the appellant stand allowed.

¶108

b) The judgment and order of acquittal passed by the Principal Civil Judge and Principal JMFC, Dharwad, dated 28.03.2012 in C.C.No.50/2008 and dated 28.03.2012 in C.C.No.155/2008 are set aside.

¶109

c) The accused is convicted for the offence punishable under Section 138 of the N.I.Act and he is sentenced to pay a fine of Rs.3,50,000/and in default of the payment of fine, he shall undergo simple imprisonment for one year.

¶110

d) The accused shall deposit the amount of fine of Rs.3,60,000/- within 60 days from the date of receipt of the copy of the order of this Court.

¶111

13 -

¶112

CRL.A No. 2639 of 2012

¶113

C/W CRL.A No. 2640 of 2012

¶114

e) The Trial Court is directed to release the amount

¶115

if the accused deposited in pursuance of the order of this Court on proper identification.

¶116

f) The Trial Court is directed to take necessary steps to recover the amount in accordance with law.

¶117

g) The Registry is directed to send the copy to the Trial Court forthwith for necessary compliance.

¶118

This Court placed appreciation on record the effective assistance rendered by Sri. Sharad M.Patil, learned Amicus Curiae .

¶119

The Karnataka State Legal Services Authority, High Court of Karnataka, Dharwad Bench, Dharwad, is directed to pay the remuneration of Rs.6,000/- to the learned Amicus Curiae .

¶120

Sd/JUDGE

¶121

PJ/Vmb List No.: 1 Sl No.: 11

Ramesh S/O. Mahadevappa Ajjodi v. Kamodkumar Kanchan

Case brief

What is this about?

What did the court decide?

Ramesh S/O. Mahadevappa Ajjodi v. Kamodkumar Kanchan

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

H Shanthappa S/O Kariyappa Vs the State of Karnataka

Sri.S.Govinda Rao, Vs Smt.Niramala

Esi Corporation Rep by Its I/C Director Vs Suresh S Gaikwad

Ramesh S/O Fakkeerappa Jadar @ Barki Vs State of Karnataka

Ramesh S/O. Mahadevappa Ajjodi Vs Kamodkumar Kanchan

Sri. Basavaraj M S/O. Mariswamy Vs the State of Karnataka