Allowed

Sri B S Kantharaj v. Sri H M Shiva Prakash

Karnataka HC27 Jan 2022CRL.RP/1106/2012

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed a criminal revision petition to set aside the conviction of the petitioner for cheque dishonour under Section 138 NI Act. The court held that the prosecution failed to prove the cheque was issued for the claimed Rs. 19.5 lakh, as the underlying MoU covered only Rs. 12 lakh. Due to inconsistencies and impossibilities in the payment evidence, the statutory presump

What did the court decide?

Judgments of trial and appellate courts set aside; petitioner acquitted of offences under Section 138 NI Act; deposit of fine refund; Rs. 10,000 awarded to Amicus Curiae.

Sri B S Kantharaj Vs Sri H M Shiva Prakash — Cheque Dishonour | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27^TH DAY OF JANUARY, 2022

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BEFORE

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THE HON’BLE MR. JUSTICE SREENIVAS HARISH KUMAR

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CRIMINAL REVISION PETITION NO.1106 OF 2012

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BETWEEN:

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SRI B S KANTHARAJ S/O LATE B P SHANTAPPA AGED ABOUT 60 YEARS R/A 36, 4TH CROSS DWARAKANAGAR, HOSAKEREHALLI BANGALORE-85

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...PETITIONER

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(BY SRI.B.S.VENKATANARAYAN, AMICUS CURIAE)

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AND:

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SRI H M SHIVA PRAKASH S/O LATE H M THIPPESWAMY AGED ABOUT 53 YEARS R/A #259, TEJAS ARCADE SANJAYNAGAR MAIN ROAD ASHWATHNAGAR, BANGALORE-94

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…RESPONDENT

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(BY SRI.Y.H.GANESH BHAT, ADVOCATE)

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THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO SET ASIDE THE ORDER DATED 04.10.2012 PASSED BY THE P.O., F.T.C.-IV, BANGALORE IN CRL.A.NO.218/2012 AND ALSO ORDER DATED 27.02.2012 PASSED BY THE XII A.C.M.M., BANGALORE IN C.C.NO.24165/2009.

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THIS CRIMINAL REVISION PETITION COMING ON FOR HEARING THROUGH VIDEO CONFERENCING THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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This revision petition is filed under section 397 Cr.P.C. questioning the correctness of the judgment dated 4.10.2012 in Crl.A.No.218/2012 on the file of the Fast Track Court-IV, Bengaluru City.

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Accused is the petitioner in this revision petition. The respondent initiated action against the petitioner in relation to offence punishable under section 138 of Negotiable Instruments Act (for short ‘N.I.Act’). It is the case of the respondent that the petitioner had entered into an agreement with one Ramakanth Revankar for purchasing 8 guntas of land out of 1 acre 10 guntas in Sy.No.214-1B, Khata No.332 of Kodigehalli, Yelahanka Taluk, Bengaluru North Taluk. The petitioner wanted to construct a multi-storied residential apartment in the land that

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he wanted to purchase and since he was in dearth of money, he approached the complainant to develop the property jointly and in this regard they entered into a Memorandum of Understanding (MoU) on 5.5.2006. In terms of the MoU the complainant and one Ananda Kumar paid a sum of Rs.19,50,000/- to the petitioner. Later on the petitioner failed to obtain absolute sale deed from Ramakanth Revankar and therefore the project that the petitioner and the complainant wanted to complete in terms of the MoU also failed. Then the complainant demanded the petitioner to return his money and at last after repeated demands, he issued a cheque bearing No.007783 dated 8.5.2009 drawn on State Bank of Mysore for Rs.19,50,000/-. The complainant presented this cheque for encashment at his Bank and when it was dishonoured for ‘insufficiency of funds’ in the bank account of the petitioner, the respondent initiated action after issuing demand notice. The

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trial court held the accused guilty of the offence under section 138 of N.I.Act and sentenced him to fine of Rs.28,10,000/with default sentence imprisonment period of six months. When the petitioner questioned the judgment of the trial court in the appellate court, his appeal came to be dismissed by the impugned judgment and hence this revision petition.

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I have heard the argument of Sri. B.S.Venkatanarayan, learned Amicus Curiae for the petitioner and Sri. Y.H. Ganesh Bhat, counsel for the respondent.

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Sri. B.S. Venkatanarayan submitted that the courts below might have concurrently held that the petitioner is guilty of the offence under section 138 of N.I.Act, but they have failed to notice one aspect of the matter that the respondent has not been able to prove that the cheque in question was issued for discharging the liability of

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Rs.19,50,000/-. The respondent has founded his case on the MoU marked Ex.P.5, its terms only indicate that the respondent agreed to lend to the petitioner an amount of Rs.12,00,000/-. MoU came into existence for development of a landed property which the petitioner wanted to purchase from one Ramakanth Revankar for a total sale consideration of Rs.14,00,000/-. By the time MoU was executed, the petitioner had already paid Rs.7,00,000/- to Ramakanth Revankar and that the respondent under took to pay the balance of Rs.7,00,000/- directly to Ramakanth Revankar besides Rs.5,00,000/- to the petitioner for his personal commitments. That means the total sum payable under MoU was only Rs.12,00,000/-. But the endorsements made on the MoU, which are disputed by the petitioner, indicate totally a sum of Rs.19,50,000/- being paid. The petitioner does not dispute payment of Rs.4,50,000/- as per one endorsement. All other endorsements are

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disputed. The MoU bears the date 5.5.2006, but there is an endorsement dated 1.5.2006 showing payment of Rs.4,00,000/- to the petitioner. It is highly impossible that before the MoU came into existence, an endorsement dated 01.05.2006 could be made on the MoU. There is another endorsement that one Anand Kumar made payment of Rs.2,00,000/- to the petitioner on 29.8.2006, but he was not examined. In fact the appellate court has doubted the genuineness of these endorsements, yet it proceeded to confirm the judgment of the trial court only on the ground that the petitioner failed to rebut the evidence of the respondent and by wrongly raising presumption under section 139 of N.I.Act in favour of the respondent. He also submitted that the trial court has not at all appreciated the evidence of the respondent in the light of the terms of the MoU, and that it has given a wrong finding to the effect that the evidence adduced by the petitioner is full

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of inconsistencies. He submitted that even assuming that there is inconsistency in the evidence of the petitioner, the trial court and the appellate court were supposed to have examined whether the evidence given by the respondent was inherently free from doubtful circumstances. In this view both the courts have grossly erred in holding the petitioner guilty of the offence under section 138 of N.I.Act. Hence he prayed for upsetting the judgments of the courts below and acquitting the petitioner.

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Learned counsel for the respondent Sri. Y.H. Ganesh Bhat, submitted that when both the courts below have concurrently held on facts that the petitioner issued the cheque in question for discharging the liability, in the revision petition interference with the findings on the facts is not permitted. The petitioner admits his signature on the cheque. He admits Ex.P.5, the MoU. His

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evidence clearly shows to have received money from the respondent on different dates. He also admits that he received a certain sum of money from Ananda Kumar. In this view the trial court in the first instance properly came to conclusion that

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the petitioner issued a cheque for clearing his liability of Rs.19,50,000/-. In view of this, the trial court has rightly drawn presumption under section 139 of N.I.Act in favour of the petitioner.

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If the defence evidence of the petitioner is considered, it is not consistent and this has been correctly observed by the trial court. On one hand the petitioner says that the respondent obtained the cheque forcibly from him and on the other hand, he states that he issued the cheque for security purpose. Thus the petitioner failed to rebut the evidence given by the respondent. A notice was issued to the petitioner before filing complaint. He received it and did not reply. If the case of the petitioner is really believable, nothing

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prevented him from replying to the legal notice. There is no probability in the defence put forward and therefore there is no scope for interfering with the judgment of the appellate court.

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The findings of the trial court are that the petitioner has admitted his signature on the MoU marked as Ex.P.5, and this very admission is sufficient to hold the payment of amounts to the petitioner. What the trial Court has meant in stating so is payment of Rs.19,50,000/-. Further it is held that the petitioner has admitted his signature on the cheque and that the defence is not consistent. In this view, presumption under Section 139 of N.I.Act has not been rebutted and thus the respondent has been able to prove his case.

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The appellate court holds that the endorsement dated 01.05.2006 marked as Ex.P.5 is not credit worthy. Having observed so, the

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appellate court yet holds that since the petitioner has not been able to dislodge the presumption in view of inconsistency in his evidence, the petitioner can be held guilty for the offence under Section 138 of N.I.Act.

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In my considered opinion both the courts have failed to comprehend the evidence. Undoubtedly there is no proper application of mind to the facts and the evidence brought on record. Firstly if the premise on which the respondent initiated action against the petitioner is seen, it can be gathered from the averments made in the complaint that the respondent made payment of Rs.19,50,000/- to the petitioner as per the terms of Ex.P.5. The respondent has stated that he and one Ananda Kumar made the payments, and to this effect there are endorsements made on different dates, and they show total payment of Rs.19,50,000/-. But the terms of Ex.P.5 are that

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the petitioner and the respondent agreed to develop the property jointly, that the respondent undertook to pay the balance of Rs.7,00,000/- to the land owner Ramakanth Revankar and bear other incidental expenses and that he also agreed to pay Rs.5,00,000/- to the petitioner for his personal commitments. That means, the respondent was to make payment of Rs.12,00,000/- (Rs.7,00,000/-+Rs.5,00,000/-) and other incidental charges for registration of sale deed. It is not disputed that the sale transaction failed, and therefore the sum that respondent might have paid to the petitioner is Rs.12,00,000/only. The petitioner admits to have received Rs.3,50,000/- on 16.06.2006 and Rs.1,00,000/- on 26.06.2006 and he admits the endorsement to this effect found in Ex.P.5. But he disputes all other endorsements and the signatures below them. Though it is possible to infer that signatures found below the endorsements are that of the petitioner

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despite their denial by him, and that there is no consistency in his defence, it is not possible to accept the respondent’s case that the petitioner issued the cheque in question for discharging liability of Rs.19,50,000/-.

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Ex.P.5 is the document that the respondent has relied upon to prove the existence of legally enforceable debt. This document shows liability of Rs.12,00,000/- only. Payment of incidental charges did not arise because the sale deed was not executed. DW1, i.e., the petitioner has stated in para 4 of his affidavit that the respondent did not pay Rs.2,50,000/-. The petitioner has admitted to have received only Rs.4,50,000/-. The counsel for the respondent referred to one answer of DW.1 in his cross examination that he received one payment from Ananda Kumar and submitted that this admission would prove the transactions. But this argument

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cannot be accepted, for it is just a stray answer. If the tenor of cross-examination of PW.1 and questions put to DW.1 are seen, what appears is that he has not accepted to have received Rs.19,50,000/- except Rs.4,50,000/- and at least in this regard his stand is consistent. More than all, there is one endorsement which makes the respondent’s case unbelievable. Ex.P.5 came into existence on 05.05.2006. That means all the endorsements should have been made subsequent to 05.05.2006. There is no explanation as to how and for what reason an endorsement was made on 01.05.2006 for receipt of Rs.1,00,000/-. This has been observed by the appellate Court. In this view, all the payments as evidenced by endorsements must have been in relation to a different transaction. But the respondent has tried to link these payments to transaction under Ex.P.5 to prove existence of legally enforceable debt for discharge of which, the cheque in question is said

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to have been issued. Thus seen, there is no congruence in the averments made in the complaint and the evidence placed by him. Therefore presumption under Section 139 of N.I.Act cannot be drawn. In spite of inconsistency in the defence version of the petitioner the respondent’s case does not stand on its own strength and therefore it is not possible to hold that the offence under Section 138 of N.I.Act is proved against the petitioner. For these reasons the judgments of both the Courts below are to be set-aside. Hence the following:

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ORDER

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Revision petition is allowed.

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The judgments of the appellate court as well as that of the trial court in Crl.A.No.218/2012 dated 04.10.2012 and in C.C.No.24165/2009 dated 27.02.2012, respectively, are set aside.

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The petitioner is acquitted of the offence under section 138 of N.I.Act.

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Deposit of fine amount, if any, made by the petitioner by virtue of the order of the appellate Court/trial Court shall be refunded to the petitioner.

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The Legal Services Authority is directed to pay Rs.10,000/- to Sri. B.S.Venkatanarayan for the service rendered by him as amicus curiae.

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Sd/-

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JUDGE

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sd/kmv

Sri B S Kantharaj v. Sri H M Shiva Prakash

Case brief

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Sri B S Kantharaj v. Sri H M Shiva Prakash

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