Partly allowed

Sri. S v. Ravikumar v Sri a. Ramanjinappa

Karnataka HC29 Oct 2022CRL.RP/184/2018

Case brief

AI extract

What is this about?

High Court allowed criminal revision petition partly. Conviction set aside regarding Ex.P.2 cheque due to defective legal notice with wrong cheque number and non-compliance of Section 138(b). Conviction confirmed for Ex.P.3 cheque where date alteration was within validity period.

What did the court decide?

Petitioner acquitted for cheque number 004989; convicted and sentenced for cheque number 004991; bail bonds cancelled.

Sri. S v Ravikumar Vs Sri a. Ramanjinappa — Cheque Dishonour | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29^TH DAY OF OCTOBER, 2022

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BEFORE:

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THE HON’BLE MR. JUSTICE S. RACHAIAH

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CRIMINAL REVISION PETITION No.184/2018

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BETWEEN:

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SRI S.V. RAVIKUMAR AGED ABOUT 32 YEARS S/O SRI VENKATARAMANAPPA GRAMA PANCHAYATH MEMBER R/AT NO.111, JANATHA COLONY SONAPANAHALLI VILLAGE BHATAHALASUR POST BANGALURU NORTH TALUK.

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... PETITIONER

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(BY SRI POOVAIAH M.A., ADVOCATE)

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AND:

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SRI A. RAMANJINAPPA S/O APPAYANNA AGED ABOUT 57 YEARS SINCE DEAD BY HIS LRS

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SMT. SARASWATHAMMA W/O LATE A. RAMANJINAPPA AGED ABOUT 63 YEARS.

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SMT. SOWMYA R.S. D/O LATE A. RAMANJINAPPA AGED ABOUT 38 YEARS.

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SRI. BHARATH R. S/O LATE A. RAMANJINAPPA AGED ABOUT 36 YEARS.

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SMT. ASHARANI D/O LATE A. RAMANJINAPPA AGED ABOUT 35 YEARS.

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ALL ARE R/AT NO.15/1, FARM HOUSE KADIGANAHALLI VILLAGE BETTAHALASURU POST BANGALORE NORTH TALUK – 562 157.

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…RESPONDENTS

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(BY SRI V. VIJAYASHEKARA GOWDA, ADVOCATE) ***

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THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W 401 CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 10.01.2018 IN CRL.A. NO.15006/2017 PASSED BY THE V ADDITIONAL DISTRICT AND SESSIONS JUDGE, DEVANAHALLI AND ALSO SET ASIDE THE JUDGMENT AND SENTENCE DATED 16.10.2017 IN C.C.NO.1317/2012 PASSED BY ADDITIONAL CIVIL JUDGE AND JMFC AT DEVANAHALLI, AS BOTH JUDGMENTS ARE HIGHLY ILLEGAL.

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THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD THROUGH PHYSICAL HEARING / VIDEO CONFERENCING HEARING AND RESERVED ON 23.09.2022 AT THE PRINCIPAL BENCH AT BENGALURU, COMING ON FOR PRONOUNCEMENT OF JUDGMENT, BEFORE DHARWAD BENCH, THROUGH VIDEO CONFERENCING, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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O R D E R

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This Criminal Revision Petition is filed by the petitioner being aggrieved by the judgment of conviction dated 16.10.2017 in C.C.No.1317/2012 on the file of the Additional Civil Judge and JMFC, at Devanahalli (hereinafter Areferred to as ‘Trial Court’) and also the judgment and order of the Appellate Court dated 10.01.2018 in Crl.A.No.15006/2017 on the file of the V Additional District and Sessions Judge, Devanahalli (for brevity, hereinafter referred to as ‘Appellate Court’).

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2. The petitioner is the accused and the deceased respondent-A.Ramanjinappa is the complainant in the Trial Court. For the sake of convenience, the ranking of the parties henceforth will be considered according to their rankings in the Trial Court.

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3. Briefly stated facts of the case are that the accused had availed a loan from the complainant on 20.12.2010 a sum of Rs.20,00,000/and repaid Rs.8,00,000/- on different dates till end of May 2011. When the complainant demanded the accused to repay the

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balance amount, the accused had issued two post dated cheques of Rs.5,00,000/- each. When those cheques were presented for encashment, the said cheques were returned with a shara as ‘insufficient funds’ and another cheque returned as ‘material alteration’ and ‘funds insufficient’. Thereafter, the complainant got issued notice and said notice was received by the accused and also issued reply. Thereafter the complainant filed a complaint seeking to take suitable action against the accused.

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4. In order to prove the case of the complainant, the complainant got examined himself as PW.1 and got examined PW.2 and also got marked Ex.P.1 to Ex.P.12. On the other hand the accused himself examined as DW.1 and got marked Ex.D.1 to Ex.D.18.

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5. The Trial Court after appreciating both oral and documentary evidence on record, concluded that the complainant has proved the case. Consequently, the accused was convicted for an offence under Section 138 of

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the Negotiable Instruments Act, 1881 (hereinafter referred

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to as ‘the Act’) and directed him to pay the fine of Rs.11,50,000/- in default of payment of fine, the accused shall undergo imprisonment for four months. Being aggrieved by the judgment of conviction and order of sentence, the accused preferred an appeal before the Sessions ACourt.A AThe Sessions Court dismissed the appeal filed by the accused by confirming the judgment of conviction passed by the Trial Court. Hence, the accused preferred this Criminal Revision Petition.

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6. Heard Sri Poovaiah M.A., learned counsel for petitioner and Sri V. Vijayashekara Gowda, learned counsel for respondents.

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7. Sri Poovaiah M.A., learned counsel for the petitioner submits that the concurrent findings recorded by both the Courts are erroneous and not tenable under law and same is liable to be set aside.

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8. The learned counsel for the petitioner submits that though the accused has disputed the financial capacity of the complainant to lend the huge amount, the Trial Court failed to appreciate the same. Therefore, the impugned judgment of conviction which is against the facts of the case.

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9. It is further submitted that the complainant issued legal notice regarding the dishonor of cheque, which is marked as Ex.P.7. The said notice contains two cheque numbers. Ex.P.2 is the cheque contains its number as 004989 and Ex.P.3 cheque contains its number 004991. However, in the notice the Ex.P-2 Cheque number has wrongly mentioned. No corrigendum was issued to rectify the same. The Trial Court should have considered the said notice as defective notice and cannot acted upon such defective notice with regard to Ex.P-2 cheque.

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10. It is further submitted that, as regards Ex.P.3 cheque is concerned, there is a material alteration found in

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the date column. The said material alteration has not been properly appreciated by the Trial Court and the Appellate Court as a result there is a miscarriage of justice. With these submissions, the learned counsel for the petitioner prays to allow the petition by considering the oral and documentary evidence on record.

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11. Per contra , Sri V. Vijayashekara Gowda, learned counsel for the respondent-complainant while justifying the concurrent findings of both the sub-ordinate Courts submits that the concurrent findings of the Trial Court and the Appellate Court requires no further interference for the reason that the points which the learned counsel for the petitioner raised before this Court, had already been dealt with by the sub-ordinate Courts in accordance with law. It is further submitted that, the petitioner has admitted the issuance of cheques and the signatures found on the cheques. Once issuance of the cheque and the signatures are admitted, there is a presumption that the said cheques were given for

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discharge of legally enforceable debt or liability. Thus, the respondent discharged initial burden of legally enforceable debt or liability. However, the petitioner has not produced any cogent evidence to rebut the presumption. Both the subordinate Courts rightly appreciated the finding of facts and law. Therefore, interference before this Court is not required and the petition requires to be dismissed.

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12. After having heard both the learned counsel for the parties and after having gone through the documents available on record, the points which arise for my consideration are:

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1) Whether the judgment of conviction passed by the trial Court and confirmed by the appellate Court are justifiable?

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2) Whether the revision petitioner has made out grounds to interfere with the concurrent findings?

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13. The scope of the revision is limited and the question involved in this case is whether mentioning

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the wrong cheque number in the notice issued by

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the complainant regarding dishonour of cheque amounts to non – compliance of section 138(b) of the N.I. Act and whether the material alteration found in the Ex.P.3 is vitiated the proceedings?

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14. This Court cannot embark upon the concurrent findings of The trial Court and the Appellate Court. However, it has to see as to whether the findings of the Sub-Ordinate Courts are erroneous or not?

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15. According to the complainant, the accused had availed loan of Rs.20,00,000/- and the accused repaid the part payment of Rs.8,00,000/- even after repaid the part payment, the accused was due a sum of Rs.12,00,000/-. After the negotiation, the accused agreed to pay a sum of Rs.10,00,000/- and issued two cheques dated 25.12.2011 and 26.12.2011 respectively, by assuring that it would be honored. On presentation of the said cheques, the complainant has received endorsements as ‘funds insufficient’ in one cheque and ‘insufficient funds’ and ‘material alteration’ in another cheque.

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16. Now, the entire crux of the matter revolves around Ex.P.7 notice. The said notice contains two cheque numbers. In other words, the respondent has issued single notice on two different cheques. Ex.P.2 cheque bearing its number as 004989. Ex.P.3 cheque bearing its number 004991. There are separate two bank endorsements issued by the bank which are marked as Ex.P.4 and Ex.P.5. The Ex.P.5 endorsement pertains to the cheque which is marked as Ex.P.2, wherein, there is an endorsement shown as ‘insufficient funds’. Ex.P.4 endorsement pertains to the cheque which is marked as Ex.P.3, wherein, there is an endorsement shown as ‘funds insufficient’ and ‘material alteration and requires full signature of the drawer’.

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17. It is the contention of the petitioner is that the notice issued by the respondent regarding dishonor of Ex.P.2 cheque is defective and it is not a notice in the law. Further, the petitioner submitted that to maintain a complaint the compliance of requirements stipulated under

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Section 138(b) of N.I. Act are mandatory. Failing to comply the said requirement will vitiate the entire proceedings.

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18. Taking into consideration the above submissions of the learned counsel for the petitioner, it is relevant to refer the judgment of the Hon’ble Supreme Court in the case of Rahul Builders v. Arihanth Fertilizers and Chemicals reported in (2008) 2 SCC 321 held in Para 10 which reads as follows:-

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“10. Service of notice , it is trite, is imperative in character for maintaining the complaint, it creates legal friction. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main section would not. Unless the notice is served in conformity with the proviso(b) apprehended to section 138 of the Act, the Complaint would not be maintainable. The Parliament while enacting the said provision consciously imposed certain conditions. One of the conditions was service of notice and making demand of the payment of the amount of the cheque as is evident from the

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phraseology “payment of the said amount of Money”. Such notice has to be issued within a period 30 days from the date of receipt of information from the bank in regard to the return of the cheque as unpaid. The Statue envisages application of the penal provisions. A perusal of the provision should be construed strictly; the condition precedent where for is service of notice. It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental charges like cost and interests. But, the same would not mean that the notice would be vague and capable of two interpretations. An omnibus notice without specifying as to What amount due under the dishonored cheque would not sub serve the requirement of law.”

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19. The principle enunciated by the Hon’ble Supreme Court with regard to issuance of the notice has been elaborately dealt with in the above judgment. On considering the principles laid down in the judgment stated supra, it is relevant to refer the facts of this case with regard to defective notice. On careful perusal of the notice,

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which is marked as Ex.P.7, in the notice issued by the complainant, the cheque which is marked as Ex.P.2 contains different number other than the number mentioned in the cheque. Thus, issuance of the notice wrongly mentioning the cheque number amounts to nonissuance of the notice to the particular cheque. In other words, the complainant after obtaining the endorsement from the bank regarding the dishonor of the cheque has not caused valid notice and maintained the complaint.

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20. It is relevant at this juncture to analyze the

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defective notice and its impact with the intent of the legislature. The legislature while enacting proviso (b) of Section 138 thought it appropriate that issuance of valid notice to the drawer is mandatory for the purpose of bringing to the notice of the drawer regarding the dishonor of cheque which is allegedly issued by him to the drawee in order to make payment on the said cheque. When the law stipulates the drawee shall issue valid notice to the drawer regarding dishonor of cheque, except issuance of the valid notice, no other option available to the drawee.

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In the absence of compliance of the provisions of Section 138(b) of N.I. Act, the drawee cannot maintain complaint. If any such complaint filed by the drawee, the Court could not proceed further in the said matter.

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21. The notice as stipulated under Section 138(b) of the N.I. Act construed as valid notice. The word “valid” indicates that the notice should not only contain the proper amount, but also proper date and the cheque number. Issuance of the notice by the drawee regarding dishonor of the cheque without following the procedure or complied the requirement of Section 138(b) of N.I. Act obviously the complaint deserves to be dismissed. Therefore, this Court opined that, the findings with regard to Ex.P-2 Cheque by the Trial Court and the Appellate Court are not appropriate and it requires consideration. Accordingly, the judgment of conviction and confirmation order by the appellate Court are required to be set aside.

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22. As regards Ex.P.3 is concerned, though the bank issued endorsement as ‘funds insufficient’ and also

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‘material alteration’, it is only with respect to date and not the amount. On perusal of the Ex.D1, it appears that Ex.P.3 dated 26.12.2011. However, there is alteration found on Ex.P.3 in date column as 26.01.2012. Such alteration if it contains no endorsement or signature of the drawer, it does not affect the case of the complainant and the same cannot be considered as material alteration for the reason that the cheque and its alleged alteration is within the period of its validity. As per the Negotiable Instrument Act, the validity of the cheque will be six months from the date of its execution. Therefore, the said alteration cannot be considered as materially affected the case of the complainant and the said alteration can be condoned as the alteration is within the validity period.

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23. Further, it is the contention of the learned counsel for the petitioner is that the complainant is not having capacity to lend huge amount of Rs.20,00,000/- to the accused is concerned, on perusal of the evidence of P.W.1 and DW1 it appears that the accused has admitted

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Ex.P.1 agreement and the signature found on it which is marked as Ex.D.14 and Ex.D.14(a). The recital of the said agreement discloses that as on the date of the said agreement the accused had paid two cheques of Rs.5,00,000/- each and further he agreed to pay a sum of Rs.3,00,000/- from the date of honoring of last cheque towards interest. In absence of contrary, mere denial of the recitals of Ex.P.1 does not sufficient to rebut the legally existing recoverable debt as on the date of its execution. Therefore, the contention of the learned counsel for the petitioner with regard to the liability and financial capacity of the complainant cannot be accepted.

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24. Though the contention raised by the accused that the cheque was taken forcibly by the complainant and his henchmen after assaulting him, no complaint has been lodged before the police with regard to alleged incident. In the absence of any cogent evidence, mere denial and improper contention taken by the petitioner-accused cannot be accepted.

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25. In view of the aforesaid findings and analysis, this Court has arrived at a conclusion that the complainant failed to establish the legally existing debt or liability with regard to Ex.P.2 cheque. Therefore, the conviction of the accused/petitioner with respect to Ex.P.2 cheque deserves to be set aside. However, the complainant proved the case with regard to Ex.P.3 cheque and the concurrent findings of both the subordinate Courts with regard to conviction of the accused is unaltered.

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26. In sum and substance, the complainant has partially proved the liability with regard to Ex.P.3 cheque and failed to prove the liability with regard to Ex.P.2 cheque as the complainant failed to comply the requirement stipulated under Section 138(b) of the Act.

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27. Therefore, in view of the observation made above, the points which arose for my consideration are answered as point No.1 and point No.2 partly in the affirmative and partly in the negative respectively.

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28. In view of the aforesaid discussions, I proceed

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to pass the following:

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ORDER

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i) The revision petition is allowed in part.

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ii) The accused is acquitted for the offence under Section 138 of the N.I Act with regard to cheque number 004989 which is marked as Ex.P.2.

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iii) The bail bonds, if any, executed by the accused stands cancelled.

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iv) The judgment and order of sentence dated 16.10.2017 in C.C.No.1317/2012 on the file of the Addl. Civil Judge and JMFC, Devanahalli and confirming order dated 10.01.2018 in Crl.A. No.15006/2017 on the file of the V Addl. District and Sessions Judge, Devanahalli are confirmed with regard to Ex.P.3 cheque.

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v) The petitioner is convicted for the offence under Section 138 of N.I. Act and he is sentenced to pay Rs.5,75,000/in default of payment of fine he shall undergo simple imprisonment for four months. Further if the said fine amount

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is realized, the respondent-complainant is entitled to have compensation of Rs.5,70,000/- and the remaining amount of Rs.5,000/- shall be adjusted to the state ex-chequer.

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vi) The registry is directed to transmit the records to the Trial Court forthwith for necessary and required compliance in accordance with law.

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Sd/JUDGE

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SSP/Naa

Sri. S v. Ravikumar v Sri a. Ramanjinappa

Case brief

What is this about?

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Sri. S v. Ravikumar v Sri a. Ramanjinappa

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