Dismissed

Shri Govind Raj Belli S/O Gundappa v. Shri K Guddappa S/O K Ningappa

Karnataka HC6 Dec 2022CRL.RP/100074/2022

Case brief

AI extract

What is this about?

The Karnataka High Court dismissed a criminal revision petition seeking to set aside conviction and sentence under Section 138 of the Negotiable Instruments Act, upholding the lower courts' findings that the presumption of debt was not rebutted by the accused.

What did the court decide?

Criminal Revision Petition dismissed; judgment of conviction and order of sentence confirmed.

Shri Govind Raj Belli S/O Gundappa Vs Shri K Guddappa S/O… — Cheque Dishonour | Karnataka HC (2022)

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CRL.RP No. 100074 of 2022

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 6^TH DAY OF DECEMBER, 2022

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BEFORE

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THE HON'BLE MR JUSTICE S.RACHAIAH CRIMINAL REVISION PETITION NO. 100074 OF 2022

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BETWEEN:

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SHRI GOVIND RAJ BELLI S/O GUNDAPPA AGED ABOUT 54 YEARS, OCC. TATA FINANCE CONSULTANT, R/O. CHITTAWADAGI 583211, TQ. HOSAPETE, DIST. VIJAYANAGAR.

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…PETITIONER

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(BY SRI. SABEEL AHMED, ADVOCATE)

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AND:

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SHRI K. GUDDAPPA S/O K NINGAPPA AGED ABOUT 78 YEARS, OCC. RETIRED RTO, R/O. H.NO.430, 3RD CROSS, BASAVESHWARA BADAVANE, HOSAPETE 583201., TQ. HOSAPETE, DIST. VIJAYNAGAR.

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…RESPONDENT

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(BY SMT. SOUMYA S.GUJAMAGADI, ADVOCATE FOR SRI. RAJA RAGHAVENDRA NAIK)

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THIS CRIMINAL REVISION PETITION IS FILED U/S 397 (1) R/W 401 OF CR.P.C., SEEKING TO SET ASIDE IMPUGNED JUDGMENT OF CONVICTION AND ORDER OF SENTENCE DATED 25.01.2022 PASSED BY THE III ADDITIONAL DISTRICT AND SESSIONS JUDGE, BALLARI SITTING AT HOSAPETE IN CRL.A.NO.5043/2019 CONFIRMING THE IMPUGNED JUDGMENT OF CONVICTION AND ORDER OF SENTENCE DATED 25.09.2019 PASSED BY THE PRINCIPAL CIVIL JUDGE AND JMFC, HOSAPETE IN CC NO.1500/2018 IN SO FAR AS SENTENCING THE PETITIONER/ACCUSED TO PAY FINE OF RS.3,10,000/AND IMPOSING THE SENTENCE OF SIMPLE IMPRISONMENT FOR A PERIOD OF THREE MONTHS FOR OFFENCE PUNISHABLE U/S 138 OF N.I. ACT.

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CRL.RP No. 100074 of 2022

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

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ORDER

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This Criminal Revision Petition is filed by the petitioner being aggrieved by the judgment of conviction and order of sentence dated 25.09.2019 in CC No.1500/2018 on the file of the Court of the Judicial Magistrate First Class, Hosapete, and its confirmation order dated 25.01.2022 in Crl.A. No.5043/2019 on the file of III Additional District and Sessions Judge, Ballary (sitting at Hosapete).

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For the convenience, the ranking of the parties henceforth will be considered according to their rankings in the Trial Court.

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3. Brief facts of case are as follows:

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It is the case of the complainant that, on 10.05.2016, the accused requested him to finance a sum of Rs.3,00,000/- for his necessities. Accordingly, the complainant paid the amount after receiving on demand promissory note executed in his favour. Inspite of repeated requests made by the complainant,

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CRL.RP No. 100074 of 2022

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the accused failed to pay the amount and thereafter, issued two cheques which are marked as Exs.P1 and P2, one cheque bearing No.775754 dated 09.10.2017 drawn on Oriental Bank of Commerce, Hosapete Branch for Rs.2,00,000/-, another cheuqe bearing No.0048772 dated 09.10.2017 for a sum of Rs.1,00,000/- drawn on Bank of India, Hosapete Branch. On presentation of the said cheques for realization, the complainant received endorsements as per Exs.P3 and P4 on 10.10.2017, thereafter, issued notice to the accused and filed the complaint before the Magistrate.

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To prove the case of the complainant, the complainant examined PW.1 and PW.2 and got marked Exs.P.1 to P.8. On the other side, the accused examined himself as DW1 and got marked Exs.D1 to D7.

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The Trial Court after considering the oral and documentary evidence, convicted the accused for the offence punishable under Section 138 of the Negotiable Instrument Act (hereinafter referred to as “N.I.Act” for short) and sentenced him to pay fine of Rs.3,10,000/-, in default, to undergo simple imprisonment for a period of three months. Being aggrieved by

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CRL.RP No. 100074 of 2022

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the said conviction, the accused preferred an appeal before the Sessions Court and the Sessions Court dismissed the appeal. Therefore, the present revision petition is filed by the petitioner / accused.

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Heard Sri Sabeel Ahmed, learned counsel for the petitioner and Smt. Soujanya S.Gujamagadi, learned counsel representing Sri. Raja Raghavendra Naik for the respondent.

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Sri Sabeel Ahmed, learned counsel for the petitioner submits that the Trial Court and the Appellate Court have committed an error in appreciating the evidence. The impugned judgments suffers from illegality and perversity. Therefore, interference by this Court is necessary to look into this aspect.

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It is further submitted that the Trial Court ignored in considering the relationship between the complainant and the accused and the loan which is said to have given to the accused has been disputed by him. It is further submitted that, prior to the alleged transaction, the accused had issued a letter to the Bank regarding stop payment stating that cheques were misplaced. Regarding Ex.P1 is concerned, Bank issued

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endorsement stating that “refer to drawer/cheque destroyed”. Regarding Ex.P2 is concerned, the bank issued endorsement as per Ex.P4 as “insufficient funds”.

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It is the further submitted that, the complainant has failed to prove the legally recoverable debt. It is further submitted that though the complainant has admitted in his evidence that at the time of loan transaction, the accused executed a promissory note, he has not produced the said promissory note which creates doubt regarding the transaction. With these submissions, the learned counsel for the petitioner seeks to set aside the concurrent findings of conviction recorded by the subordinate Courts.

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Per contra, Ms. Soujanya S.Gujamagadi, representing Sri. Raja Raghavendra Naik while justifying the judgment of conviction passed by the Trial Court and its confirmation recorded by the Appellate Court submits that, the loan transaction has been proved by Ex.P8-bank statement. The bank statement indicates that on 13.05.2016 the amount of Rs.4,00,000/- was withdrawn from the bank and handed over to the accused on 13.05.2016. It is further submitted that

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merely because the promissory note has not been produced before the Court that does not take away the case of the complainant. The cheques issued by the complainant is not disputed and signatures thereon is also not disputed. Therefore, initial presumption raised in favour of the complainant has not been rebutted by the accused by producing cogent evidence. Therefore, the Subordinate Courts have rightly appreciated the evidence and the materials available on record and concluded that the accused has committed an offence under Section 138 of the N.I. Act. Therefore the interference by this Court with the said findings may not be warranted. As such, the learned counsel for the respondent prays to dismiss the petition.

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Learned counsel for the respondent relied on the judgment of Hon’ble Supreme Court in the case of Kishan Rao Vs. Shankargouda¹ . Para Nos.12, 18, 20, 21 read thus:-

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“12. This Court has time and again examined the scope of Section 397/401 Cr.P.C. and the ground for exercising the revisional jurisdiction by the High Court. In State of Kerala vs. Puttumana Illath Jathavedan Namboodiri, 1999 (2) SCC 452, while considering the scope of the revisional jurisdiction of

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1 (2018) 8 SCC 165

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CRL.RP No. 100074 of 2022

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the High Court this Court has laid down the following:

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“5......In its revisional jurisdiction, the High Court can call for and examine the record of any proceedings for the purpose of satisfying itself as to the correctness, legality or propriety of any finding, sentence or order. In other words, the jurisdiction is one of supervisory jurisdiction exercised by the High Court for correcting miscarriage of justice. But the said revisional power cannot be equated with the power of an appellate court nor can it be treated even as a second appellate jurisdiction. Ordinarily, therefore, it would not be appropriate for the High Court to reappreciate the evidence and come to its own conclusion on the same when the evidence has already been appreciated by the Magistrate as well as the Sessions Judge in appeal, unless any glaring feature is brought to the notice of the High Court which would otherwise tantamount to gross miscarriage of justice. On scrutinizing the impugned judgment of the High Court from the aforesaid standpoint, we have no hesitation to come to the conclusion that the High Court exceeded its jurisdiction in interfering with the

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conviction of the respondent by reappreciating the oral evidence.....”

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18. Section 139 of the Act, 1881 provides for drawing the presumption in favour of holder. Section 139 is to the following effect:

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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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20. This Court held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. Following was held in paragraph 20:

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“20....The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration

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and existence of debt, apparently would not serve the purpose of the 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 probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist...”

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21. In the present case, the trial court as well as the Appellate Court having found that cheque contained the signatures of the accused and it was given to the appellant to present in the Bank of the presumption under Section 139 was rightly raised which was not rebutted by the accused. The accused had not led any evidence to rebut the aforesaid presumption. The accused even did not come in the witness box to support his case. In the reply to the notice which was given by the appellant the accused took the defence that the cheque was stolen by the appellant. The said defence was rejected by the trial court after considering the evidence on record with

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regard to which no contrary view has also been expressed by the High Court.

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After having heard the learned counsel for the respective parties and perusing the documents on record, it is necessary to verify as to whether the Trial Court has committed any error in appreciating the evidence on record.

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Before adverting to the other facts of the case, it is relevant to refer the law on the point. It is worth to note a decision of the Hon’ble Supreme Court reported in Rangappa Vs. Sri. Mohan² . Para Nos.26 and 27 reads thus:

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“26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be

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2 (2010) 11 SCC 441

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no doubt that there is an initial presumption which favours the complainant.

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27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonor of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof.

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There is mandate of presumption under section 139 of the Act and on consideration of the terms of the provision of the Act, the onus shifts to the accused, on proof of issuance of cheque, to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act. A presumption is raised that the holder of the cheque received the cheque for the discharge, in whole or in

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part, of any debt or other liability. To rebut this presumption, the facts must be adduced by the accused which on preponderance of probabilities must be proved.

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In the case of K.N. Beena vs. Muniyappan³ , it is observed and held by this Court that,

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“Under Section 118 of the N.I. Act, unless the contrary is proved, it is to be presumed that the negotiable instruments (including a cheque) had been made or drawn for consideration. It is further observed and held that under Section 139, the Court has to presume, unless the contrary is proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. It is further observed that thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that the cheque has not been issued for a debt or liability is on the accused.”

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The above principle makes it clear that once the cheque is issued, it is presumed that the said cheque has been issued for legally recoverable debt or liability. In the present case, the accused has taken a contention that he has not seen

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3 (2001) 8 SCC 458

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CRL.RP No. 100074 of 2022

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or not acquainted with the complainant. Though he has raised the said contention, but he failed to establish before the Court regarding the issuance of the cheque to the complainant. It is stated in his evidence that, the said cheques were misplaced or lost. Therefore, he has given stop payment to the bank. If the cheques were really missed or lost, the person who lost it, should have lodged the complaint before the police regarding the same. Merely, because stop payment was given to the bank would not be sufficient to say that no transaction has taken place between the complainant and accused.

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17. Though the accused has taken the contention that

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there are some contradictions in the evidence of complainant with respect to the alleged loan transaction, on perusal of the evidence of PW1, it appears that in the year 2016, the accused has borrowed money stating that he would construct the house and hence, he wanted money. However, the accused has stated that the said construction was over in the year 2008-09. Thus the request regarding construction of the house would not arise.

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CRL.RP No. 100074 of 2022

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On careful perusal of the contention of the accused regarding non-transaction with the complainant, the accused failed to establish issuance of cheques and he has not denied the signature found on the cheques. Therefore, mere denial of transaction is not sufficient to rebut the presumption. The contentions taken by the accused are not sufficient to rebut the presumption available under statute. Therefore, the Trial Court and the Appellate Court have rightly analyzed the evidence and arrived at a conclusion that the accused is guilty for the offence punishable under Section 138 of the N.I. Act. Therefore, the said concurrent findings of conviction recorded by subordinate Courts do not call for any interference. Hence, I proceed to pass the following:

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ORDER

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(i) Criminal Revision Petition is dismissed.

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(ii) The impugned judgment of conviction and order of sentence dated 25.09.2019 in C.C. No. 1500/2018 on the file of the learned Principal Civil Judge & Judicial Magistrate First Class, Hosapete, and its confirmation order dated

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CRL.RP No. 100074 of 2022

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25.01.2022 in Crl.A. No.5043/2019 on the file of III Additional District and Sessions Judge, Ballari, (sitting at Hosapete) are confirmed.

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Sd/JUDGE

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VMB List No.: 1 Sl No.: 27

Shri Govind Raj Belli S/O Gundappa v. Shri K Guddappa S/O K Ningappa

Case brief

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Shri Govind Raj Belli S/O Gundappa v. Shri K Guddappa S/O K Ningappa

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