Dismissed

M G Siddappa v. Mallikarjuna M

Karnataka HC11 Feb 2022CRL.RP/547/2015

Case brief

AI extract

What is this about?

The Karnataka High Court dismissed a criminal revision petition filed against a conviction and sentencing order in a cheque bounce case. The court held that the presumption under the Negotiable Instruments Act was properly drawn and not rebutted by the accused's inconsistent defense.

What did the court decide?

The criminal revision petition was dismissed, and the judgment of conviction and sentence confirmed by the Sessions Judge was affirmed.

M G Siddappa Vs Mallikarjuna M — Cheque Dishonour | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 11^TH DAY OF FEBRUARY, 2022

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BEFORE:

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THE HON’BLE MR. JUSTICE P.N.DESAI

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CRIMINAL REVISION PETITION No.547 OF 2015

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BETWEEN:

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M G SIDDAPPA S/O LATE BASAVARAJAPPA, AGED ABOUT 55 YEARS, TEACHER, ALLURE VILLAGE, DAVANAGERE TALUK, DIST:DAVANAGERE-577 006.

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... PETITIONER

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( BY SMT: SARITHA. A.L., FOR SRI. SRIDHAR.N.HEGDE, ADVOCATES)

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AND:

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MALLIKARJUNA M, S/O KOTRAPPA, AGED ABOUT 45 YEARS, # 337/25A, SRI SHIVA KRUPA, GANESH LAYOUT, BEHIND KSRTC BUS STAND, DAVANAGERE-577 006. ….RESPONDENT

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( BY SRI: N. RAMAKRISHNA., FOR SRI. M.R. HIREMATHAD, ADVOCATES.)

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THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO SET ASIDE THE ORDER DATED 28.4.2015 PASSED BY THE II ADDITIONAL DISTRICT AND SESSIONS JUDGE, DAVANAGERE IN CRL.A.NO.40/2014 IN CONFIRMING THE JUDGMENT OF CONVICTION DATED 15.3.2014 PASSED BY THE I ADDL. SENIOR CIVIL JUDGE. AND J.M.F.C., DAVANAGERE IN C.C.NO.687/2012 AND ACQUIT THE PETITIONER/ACCUSED FOR THE ALLEGED OFFENCE.

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

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ORDER

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This revision petition is filed by the petitioner under sections 397 and 201 of The Code of Criminal Procedure, 1973(for short hereinafter referred to as 'Cr.P.C.'), wherein the legality and propriety of the judgment passed by learned II Additional District and Sessions Judge, Davanagere in Crl.A.No.40/2014 dated 28.04.2015 is assailed wherein the judgment of conviction and order of sentence passed by learned I Addl. Senior Civil Judge, Davanagere dated 15.03.2014 in C.C.No.687/2012 is confirmed.

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The revision petitioner before this Court is accused before the trial court and the respondent in this case is the complainant before the trial court.

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For the sake of convenience, the parties will be referred as 'accused' and 'complainant' as per their respective ranks before the trial court.

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The brief case of the complainant before the trial court is that, the complainant and accused are known to each other. The complainant is working as a Field officer at M/s. Indofil Company, Davanagere. In the first week of June 2009, the accused approached the complainant and requested him for a hand loan for his domestic and legal necessity to the tune of Rs.1,00,000/-. After satisfying the requirements and necessity of the accused, the complainant gave Rs.1.00 lakh in cash to the accused. It is further contended that the accused promised that he would return the same within one month. After one month, the accused did not return the amount as promised. Therefore, the complainant requested him number of times to repay the amount. Subsequently, on 02.8.2009, the accused issued a cheque bearing No.136896 dated 08.08.2009 for Rs.1.00 lakh drawn on SBI Bank, S.S. Complex Road, N.R. Road, Davanagere. As informed by the accused, the complainant presented the said cheque for encashment to his banker bank, but the said cheque was returned with an endorsement by the bank as

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'insufficient funds' in the account of accused. Thereafter on 20.08.2009, the complainant got issued legal notice to the accused demanding payment of money. The notice was served on the accused on 01.09.2009. Inspite of that, the accused neither replied the notice nor paid the amount. Hence, the complainant filed a complaint before the II JMFC court, Davangere for offences punishable under section 138 of the Negotiable Instruments Act, 1881(hereinafter referred as 'N.I'. Act for short).

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The accused appeared before the court and after recording of plea, the complainant got examined himself as PW-1 and got marked six documents as ExsP1 to P6. Thereafterwards, the statement of the accused as required under section 313(1) (b) Cr.P.C. was recorded. The accused denied the circumstances appearing against him in the evidence of the complainant. The accused gave his defence evidence as DW-1, but no documents were marked for the accused. After hearing the arguments, learned JMFC convicted the accused for the offence punishable under section

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138 of N.I. Act and sentenced him to pay a fine of Rs.5,000/- in default to undergo simple imprisonment for a period of two months. Further under section 357(3) Cr.P.C., the accused was directed to pay a sum of Rs.1,35,000/- to the complainant towards the compensation and in default, to undergo simple imprisonment for a period of three months. Aggrieved by the said judgment, the complainant preferred an appeal before the Sessions Court in Crl.A.No.40/2014. Learned sessions judge by the judgment dated 28.04.2015 dismissed the appeal filed by the accused and confirmed the judgment passed by JMFC Court which is now assailed by the revision petitioner/accused in this revision.

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Heard learned counsel Smt. Saritha A.L. for Sri. Sridhar N. Hedge for the petitioner and learned counsel Sri. N. Ramakrisha for Sri. M.R. Hiremathad for the respondent.

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Learned counsel for the revision petitioner/accused argued that the judgment of conviction passed by both the courts are arbitrary,

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illegal and not in accordance with law. It is further argued that both the courts have failed to appreciate the defence of the accused and evidence on record. It is further contended that the complainant has filed a false case against this petitioner without any fault. Infact, accused has not received any amount from the complainant and there is no transaction between the complainant and the accused. It is argued by learned counsel that the complainant's wife by name Siddamma is working as a teacher in a school where the accused is also working as a teacher. The accused had taken hand loan from said Siddamma who is his colleague, to the tune of Rs.20,000/- (Twenty thousand) once and Rs.15,000/- once. At that time, the accused had issued a signed blank cheque to Siddamma towards the security of said transaction. The accused had not issued any cheque in favour of the complainant and the said blank cheque given to Smt. Siddamma is now misused by the complainant and a false case has been filed against the accused. Learned counsel argued that both the courts have failed to see that there is no legally

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recoverable debt or liability from the accused towards the complainant Therefore, the ingredient of section 138 of N.I. Act are not attracted. There is no sufficient evidence on record to convict the accused. The accused by leading his defence evidence has rebutted the presumption in favour of the complainant. With these main arguments, learned counsel prayed to set-aside the judgment of conviction passed by learned JMFC Court which is confirmed by the sessions court and acquit the accused.

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Against this, learned counsel for the respondent

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/ complainant argued that the complainant has placed both oral and documentary evidence in support of his complaint. The ingredient of section 138 of N.I. Act are fulfilled. The complainant has produced the cheque, bank endorsement, copy of legal notice and the complaint is also filed within the statutory period prescribed under section 138 of N.I. Act. Learned counsel further argued that apart from that there is presumption in favour of the complainant. Against this, cross-examination from accused side is inconsistent

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with the defence taken. There is suggestion that a cheque was issued for Rs.10,000/- and it was altered to Rs.1.00 lakh by inserting one more 'zero', which is contrary to the defence set up by the accused. Such inconsistent defence will not help the accused. Further, learned counsel argued that both the courts after considering the entire evidence on record and also considering the case laws in respect of appreciation of evidence in N.I. Act cases, have come to the conclusion that the complainant has proved his case and rightly convicted the accused. The learned sessions Judge has re-appreciated the evidence and also come to the conclusion that the defence of the accused has no merit. Accordingly, the learned sessions judge has rightly dismissed the appeal. Therefore, this Court's interference is not needed and prays to dismiss the revision petition.

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I have perused the appeal memo, judgment passed by learned JMFC and also learned Sessions judge in Crl.A.No.40/2014 and has gone through the entire evidence on record.

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From the above materials, the point that arise for consideration of this Court is:-

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"Whether the impugned judgment of conviction and order of sentence passed by JMFC court which is confirmed by learned Sessions Judge in Crl.A.No.40/2014 is correct, legal and in conformity with the settled principles regarding appreciation of evidence in cases under section 138 of N.I. Act, 1881, which are popularly called as 'cheque bounce cases'.?

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It is settled principles of law that initial burden of proving his case and ingredient of section 138 of N.I. Act is on the complainant. The complainant PW-1 has filed his examination-in-chief affidavit by reiterating the averments made by him in his complaint. He has also produced Ex-P1 cheque which shows that the cheque was issued in favour of the complainant for Rs.1,00,000/-. Ex-P2 is the signature of the accused on cheque Ex-P1. Ex-P3 is the bank endorsement, Ex-P4 is the bank statement to show that the said amount was deducted from the account of the complainant, Ex-P5 is the legal notice, Ex-P6 and Ex-P7 are the postal

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acknowledgments and receipts. It is also evident that the complainant has filed a complaint in compliance with section 138 of N.I. Act. Though PW-1 was crossexamined at length, but there is nothing in his crossexamination to show that he has filed a false case against the accused. On the other hand, his crossexamination shows that the accused and the complainant are known to each other. PW1 has also stated that he is having agricultural lands and he is maintaining the accounts. He has also stated that sufficient income is derived from the agricultural land. Further, it is suggested that at the time of marriage, in the year 2008, he has given only Rs.20,000/- and for the security of the said loan, he has secured cheque of Canara Bank. So this suggestion runs contrary to the defence taken by the accused. It is again suggested that the complainant's wife has given once Rs.20,000/- and once Rs.15,000/- for his legal necessities. Again said suggestion is denied. It is suggested that the cheque amount was altered and one more 'zero' is added in front of Rs.10,000/-. So this type of inconsistent

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suggestion shows that the defence of the accused is only for the sake of defence. If at all he has issued cheque for Rs.10,000/- and it is altered to Rs.1.00 lakh, then he should have taken such defence. Once he says that he has taken amount from complainant and another time he says he has borrowed money from the wife of the complainant and again he says he has issued cheque for Rs.10,000/- and it is altered to Rs.1.00 lakh. So this entire cross-examination of accused indicates that it is only for some defence sake and there is no merit in it.

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It is settled principles of law that once the complainant has discharged his initial burden and when the accused has not denied issuance of cheque and his signature on the cheque and when once he admits receipt of demand legal notice and does not reply to the said notice, then under sections 118 and 139 of N.I. Act, there is presumption in favour of the complainant, and the Hon'ble Supreme Court in latest decision of

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KALAMANI TEX AND ANOTHER v.

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P. BALASUBRAMANIAN¹ considered as to how the presumption under N.I Act will be raised in favour of the complainant and how the accused has to rebut such presumption. It is held at paragraph 13 as under:

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" 13. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of N.I.Act. The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these "reverse onus" clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallised by this Court in Rohitbhai Jivanlal Patel V. State of Gujarat (2019) 18 SCC 106, in the following words :(SCC pp.120-21, para 18)

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18. In the case at hand, even after purportedly drawing the presumption under section 139 of NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such

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1 (2021) 5 SCC 283

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presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favor, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused."

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Further, the Hon'ble Supreme Court in the case

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of Rangappa v. Sri Mohan² , considered the principles regarding presumption of existence of a legally enforceable debt or liability under Section 139 of the N.I. Act. In the aforesaid decision, after considering other decisions of Supreme Court on Sections 118(a) and 139 of N.I. Act, the Court held that there exists a presumption which favours the complainant. It is further observed that the presumption under Section 139 of the N.I. Act is in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of legally enforceable debt or liability can be contested. In Para 27 this Court observed and has held as under:(SCC PP.453-54)

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2 (2010) 11 SCC 441

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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 dishonour 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 of proof.”

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Therefore, once the complainant has proved

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his case, then the burden shifts on the accused to rebut that presumption. The accused has to rebut the presumption in two ways. Firstly, by cross-examining the complainant and show before the court that the transaction between the accused and complainant is not probable or true. Secondly, is to plead his defence evidence and show before the court that the complainant has not discharged his initial burden. But

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merely denying existence of debt will not serve any purpose. Of-course, the defence need not prove its case beyond all reasonable doubt, but it is by way of preponderance of probability. In this regard, the Hon'ble Supreme Court referring to the decision in the case of KUMAR EXPORTS v. SHARMA CARPETS³ in KISHAN RAO v . SHANKARGOUDA⁴ held at paras 14 and 15 as

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under:-

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“ 14. Section 139 of the Act provides that 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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15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act, all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) “may presume” (rebuttable), (2) “shall presume” (rebuttable), and (3) “conclusive presumptions” (irrebuttable). The term “presumption” is used to

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3 (2009) 2 SCC 513

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4 (2018) 8 SCC 165

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designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the “presumed fact” drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means “taking as true without examination or proof”.

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Therefore, in view of the principles laid down in the above referred decisions, if the oral evidence of PW-1 and documentary evidence at Exs-P1 to P6 are considered, it is evident that the complainant has discharged his initial burden to prove the case under section 138 of N.I. Act.

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The defence of the accused is that he knows

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the wife of the complainant. There was marriage of eldest daughter of the accused in the year 2008 and the accused had borrowed an amount of Rs.20,000/- from the wife of the complainant in the presence of the complainant. Again in the year 2009, there was marriage of second daughter of the accused. The accused and his second daughter went to the house of the complainant and borrowed Rs.15,000/- from the

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wife of the complainant and as per her request, he has given said cheque. DW1 has again stated that after receipt of legal notice, he went to the wife of the complainant and she told that if he returns Rs.35,000/-, the complaint will be taken back. So such a defence has no basis at all. In the cross-examination, the accused has admitted that Ex-P1 cheque is issued by him and signature on Ex-P1 is also admitted by him. He has also admitted Ex-P5 notice is received by him and his signature is also admitted on Ex-P6 postal acknowledgment.

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Regarding the financial capacity of the wife of the complainant, the accused has expressed his ignorance. It is also evident from his cross-examination that number of persons have filed cheque bounce cases against him which are pending. This itself shows that the accused is in the habit of taking loan and giving cheque without having sufficient amount in his account. The accused is a teacher and he is well versed with the money transactions. It is seen that there are number of cases filed against the accused wherein cheques are

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dishonoured. If the defence evidence of the accused is considered, then it is evident that it is only the defence for the sake of defence and there is no truth in it. There is no evidence to show that any false case has been foisted against him. On the other hand, it is evident that he has performed marriage of his two daughters and he was in need of money for their marriage and he has borrowed the amount from the complainant and his wife, but, he says it is only Rs.35,000/- which is not true.

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Both the first appellate court and the trial court have held that the complainant has proved that the accused has issued cheque for Rs.1.00 lakh in discharge of his legally recoverable debt or enforcing legally recoverable liability. Said cheque was dishonoured due to insufficient funds. The accused did not pay the amount. The evidence on record shows that the complainant has proved the ingredients of section 138 of N.I. Act. Therefore, the finding arrived at by both the courts below cannot be said to be illegal or capricious. Learned Sessions Judge has meticulously

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considered all the aspects and has relied on the decision of the Hon'ble Supreme Court regarding admitting the signature on the cheque as held in VIJAYA v . LAXMAN AND ANOTHER⁵ and the learned sessions Judge also relied on the decision of SATISH JAYANTILAL SHAH

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v. PANKAJ MASHRUWALA AND ANOTHER⁶ wherein

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it is held that once the signature is admitted, there is no necessity that entire writing in cheque should be filled by the accused only. He has also discussed as to the financial capacity of the complainant and he has also relied on another decision of the Hon'ble Supreme Court in the case of HITEN P. DALAL v. BRATINDRANATH

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BANERJEE⁷ regarding presumption under N.I Act. After considering all the aspects and referring to the ratio involved in the said judgments, learned sessions judge has come to the conclusion that the finding of guilt arrived at by learned JMFC is legal and proper. I find no ground to interfere with the finding of guilt passed by learned JMFC which is confirmed by learned sessions judge in Crl.A.No.40/2014. There is no illegality or

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5 AIR 2013 SC 196

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6 1996 CRL.L.J. (GUJARAT HIGH COURT) 3099

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7 2001(6) SC 16

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perversity in the judgments of both the courts below. Both the courts have rightly appreciated the evidence in right perspective and also keeping in mind the principles regarding appreciation of evidence in cases filed under section N.I. Act which are popularly called as 'cheque bounce cases'. Therefore, the revision petition being devoid of merit is liable to be dismissed.

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Accordingly, I pass the following:

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ORDER

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The revision petition is dismissed.

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The judgment passed by the II Additional District and Sessions Judge, Davanagere in Crl.A.No.40/2014 dated 28.04.2015, confirming the judgment of conviction and order of sentence passed by I Addl. Senior Civil Judge & JMFC, Davanagere in C.C.No.687/2012 dated 15.03.2014 stands affirmed.

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Send back the records to the trial court.

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*mn/-

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Sd/JUDGE

M G Siddappa v. Mallikarjuna M

Case brief

What is this about?

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M G Siddappa v. Mallikarjuna M

Case brief

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