Dismissed

M/S Jai Matha Finance v. Sri Susheer Kumar

Karnataka HC21 Feb 2022CRL.A/945/2016

Case brief

AI extract

What is this about?

High Court Bench dismissed the criminal appeal filed by a finance firm challenging the acquittal of an accountant under Section 138 of the Negotiable Instruments Act. The Court held the trial Court was correct in acquitting the accused as the complainant failed to prove disbursement of the loan amount or authorize the prosecution. The judgment is thin as it merely confirms the lower court's acquit

What did the court decide?

Criminal Appeal dismissed; judgment of acquittal dated 18.11.2015 confirmed.

M/S Jai Matha Finance Vs Sri Susheer Kumar — Cheque Dishonour | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21^ST DAY OF FEBRUARY, 2022

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BEFORE

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THE HON’BLE MR. JUSTICE RAJENDRA BADAMIKAR

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CRIMINAL APPEAL No.945/2016

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BETWEEN:

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M/S JAI MATHA FINANCE ASSISI BUILDING, DON BOSCO HALL BALMATTA ROAD, MANGALURU-575 001 REPRESENTED BY ITS MANAGING PARTNER HEMACHANDRA, S/O LATE K. SANJEEVA AGED ABOUT 43 YEARS R/AT BROOK LANE, FALNIR, MANGALURU-575 002, DK

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….APPELLANT (BY SRI. A.C. NAGARAJ, ADVOCATE)

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AND:

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SRI. SUSHEER KUMAR S/O LATE R.D. SUVARANA, ACCOUNTANT AGED ABOUT 60 YEARS KARNATAKA RAJYA KAIGARIKA BANK NIYAMITHA BALMUTT ROAD MANGALURU-575 001

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…. RESPONDENT (BY SRI. SHASHIKANTH PRASAD, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT DATED 18.11.2015 PASSED BY THE JMFC (V-COURT) MANGALURU, D.K., IN C.C.NO.122/2013, ACQUITTING THE RESPONDENT/ ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT.

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THIS CRIMINAL APPEAL COMING ON FOR ADMISSION THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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Though this appeal is listed for admission, with the consent of the learned counsel appearing for the parties on both sides, the same is taken-up for final disposal.

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This appeal is filed by the appellant/complainant against the judgment of acquittal dated 18.11.2015 passed by JMFC-V, Mangaluru, DK, in C.C. No.122/2013, whereby the learned Magistrate has acquitted the respondent/accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (‘ N.I. Act’ for short).

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For the sake of convenience, the parties herein shall be referred with the original ranks occupied by them before the trial Court.

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The brief facts of the case are that, the complainant is a partnership firm carrying on money lending business and it is represented by the Managing Partner. The accused is working as an Accountant at Karnataka Rajya Kaigarika

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Sahakara Bank Niyamitha, Balmatta Road, Mangaluru and had good acquaintance with the complainant. Accused has availed loan of Rs.1,50,000/- by way of cash on 02.04.2012 from the complainant by executing ‘On Demand Promissory Note’. On 22.10.2012, the accused/respondent herein has issued a cheque (Ex.P1) in favour of the complainant-Firm for Rs.1,58,000/towards discharge of the said loan and when the said cheque was presented for encashment, it bounced for ‘Insufficient Funds’. As such, the complainant has issued a legal notice and in spite of service of legal notice, the accused did not repay the loan amount and hence, the complainant has filed a private complaint under Section 200 of Criminal Procedure Code, 1973 (Cr.P.C’ for short).

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The learned Magistrate after recording the sworn statement, has issued process against accused and the accused has appeared through his counsel and was enlarged on bail. The accusation was read-over and explained to accused and he pleaded not guilty.

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The so-called Managing Partner of the appellant/ complainant-Firm was examined as PW.1 and the complainant has also placed reliance on Thirteen documents marked at Exs.P1 to P13. After conclusion of evidence of prosecution, the statement of accused under Section 313 of Cr.PC was recorded to enable the accused to explain the incriminating evidence appearing against him in the case of prosecution. The case of accused is of total denial and he got examined himself as DW.1.

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After hearing the learned counsels on both sides and on perusing the documents available on record, the learned Magistrate has found that the complainant has failed to prove the guilt of accused for the offence punishable under Section 138 of N.I. Act and as such, acquitted him of the charge levelled against him. Being aggrieved by this judgment of acquittal, the complainant has filed this appeal under Section 378(4) of Cr.PC.

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Heard the learned counsels appearing for the appellant and the respondent. Perused the records.

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Learned counsel for appellant would contend that the

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judgment of acquittal passed by the trial Court is perverse, erroneous and based on surmises. He would also contend that the legal notice issued to the accused is served on him and the same is not replied and accused has also executed ‘On Demand Promissory Note’ for a sum of Rs.1,58,000/- as per Ex.P6. He would also contend that, since cheque and signature have been admitted, the presumption is in favour of the complainant and further he contends that accused has failed to rebut the presumption and as such, sought for allowing the appeal by convicting the accused/respondent herein.

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Per contra, the learned counsel for

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accused/respondent would contend that, the complainant-Firm is alleged to be a registered Financial Corporation and no records have been produced to show that there is any transaction in the form of agreement between the parties. He would also contend that, no documents have been produced regarding statement of accounts pertaining to account of accused to show that, as on date issuance of cheque under Ex.P1, the balance was Rs.1,58,000/- and no documents have been produced to show

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that loan of Rs.1,50,000/- was advanced to accused on 02.04.2012. Further, he would also contend that the presumption stands rebutted in view of evidence on record and burden is on the complainant to establish the existence of legally enforceable debt and the same is not done and as such, he would contend that the trial Court has properly appreciated the oral and documentary evidence and arrived at a just decision. Hence, he would request for dismissal of the appeal.

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Having heard arguments advanced by the learned counsels appearing on both sides and on perusing the records, it is important to note here that the complainant is a Finance Company. In that view of the matter, it is evident that, it is a registered Finance Company doing money lending business. If that is the case, then PW.1, who claims to be an authorized officer, is required to produce an Authorization Certificate or on the contrary the resolution of the Finance Company to show that PW.1 was authorized to lodge complaint and to prosecute the matter. But, no such documents are forthcoming. Hence, the authority of PW.1 to prosecute the matter itself is in dispute.

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PW.1 in his examination-in-chief has specifically

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deposed regarding availment of loan of Rs.1,50,000/- by accused on 02.04.2012. However, in cross-examination, he admitted that in the statement of accounts (Ex.P9) there is no reference of advancement of loan of Rs.1,50,000/- to accused. On contrary, he simply deposes that, they have got executed an ‘On Demand Promissory Note’ ie., Ex.P6. He also deposes in cross-examination that, they have charged interest at the rate of 16% per annum and in Ex.P6 there is also a reference regarding interest to be paid at the rate of 16% per annum. Very interestingly, it is to be noted here that, all along it is claimed that, amount is advanced by way of cash. It is relevant to note here that the complainant- Company is a Registered Financial Institution. Under such circumstances, question of complainant-company disbursing the loan amount by cash does not arise at all and in such case, the amount should have been transferred to the account of accused, but that is not forthcoming.

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Apart from the above, if at all there is a loan transaction between the complainant and accused, there should

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be a loan agreement between the parties. But, the complainant has not produced any loan agreement and the cross-examination of PW.1 reveals that, they have only obtained ‘On Demand Promissory Note’. Further, PW.1 has admitted that no documents are available to show that Rs.1,50,000/- was withdrawn from any Bank on 02.04.2012. This clearly discloses that no material piece of evidence is placed by the complainant to show that the loan of Rs.1,50,000/- was disbursed to accused by the complainant on 02.04.2012. Even the complainant has not maintained statement of accounts pertaining to accused. Except Ex.P6, no other document is forthcoming in this regard and Ex.P6 should be coupled with some documents regarding disbursement of loan, but that is not available. Further, Ex.P7 to Ex.P10 do not disclose the statement of account pertaining to account of accused. Even this daily statements are not certified in the manner provided under the Banking Rules and Regulations. Hence, it is evident that, PW.1 is not an authorized person and there is no document to show that the alleged loan was disbursed on behalf of the complainant-Finance Institution to the accused. Ex.P13 is placed as reliance. But, it

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simply discloses that, it is a Deed of Unregistered Partnership. When the loan documents are not produced before the Court and documents pertaining to disbursement of loan amount were with-held by the complainant, an adverse inference is required to be drawn against the complainant. Hence, the evidence clearly discloses that presumption available in favour of the complainant is rebutted by accused. The rebuttal need not be by accused entering into witness-box and even by way of crossexamination, accused can rebut the presumption. In the instant case, the evidence clearly discloses that the presumption available in favour of complainant stands rebutted. No documents have been forthcoming for disbursement of loan of Rs.1,50,000/- as claimed by the complainant. Further, an authorization also not forthcoming for prosecuting the matter.

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Under these circumstances, the complainant has failed to establish that, accused having availed loan of Rs.1,50,000/- has issued the cheque under Ex.P1 having knowledge that, he had no sufficient funds in his account and thereby committed an offence under Section 138 of N.I. Act. The learned Magistrate has appreciated all these facts in a proper

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perspective and has rightly acquitted the accused of the said offence. The impugned judgment is neither perverse nor arbitrary so as to call for any interference by this Court. Under these circumstances, the appeal fails and accordingly, I proceed to pass the following:-

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ORDER

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The appeal is dismissed . The judgment of acquittal dated 18.11.2015 passed by the JMFC-V, Mangaluru, D.K., in C.C. No.122/2013, stands confirmed.

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Sd/JUDGE

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KGR*

M/S Jai Matha Finance v. Sri Susheer Kumar

Case brief

What is this about?

What did the court decide?

M/S Jai Matha Finance v. Sri Susheer Kumar

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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