Partly allowed

H.N. Ravi v. Guruvegowda

Karnataka HC13 Jan 2022CRL.RP/908/2015

Case brief

AI extract

What is this about?

The Court upheld a cheque-dishonour conviction but held that adding a fine in the accused's appeal impermissibly enhanced the sentence. It partly allowed revision, removed substantive imprisonment, retained the fine and compensation, and prescribed imprisonment only upon default.

What did the court decide?

Substantive six-month imprisonment set aside; fine and compensation retained, with six months' simple imprisonment in default. Compensation payable within three months of receipt of the certified orde

H.N. Ravi Vs Guruvegowda — Cheque Dishonour | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF JANUARY, 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.908/2015

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BETWEEN:

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H.N.RAVI S/O. LATE NARAYANAPPA AGED ABOUT 53 YEARS R/AT. D.NO.52 RAMAMANDIRA STREET HALAGURU TOWN MALAVALLI TALUK MANDYA DISTRICT – 571 401

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...PETITIONER

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(BY SRI. B. VIJAY SHETTY, ADV.)

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AND

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GURUVEGOWDA S/O.THAMMAIAH AGED ABOUT 64 YEARS R/AT. RAMAMANDIRA BEEDI HALAGURU TOWN MALAVALLI TALUK MANDYA DISTRICT – 571 401

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… RESPONDENT (BY SRI. SRINIVAS B.S. FOR SRI B.L.SANJEEV, ADVS.)

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THIS CRIMINAL REVISION PETITION IS FILED U/S.397 R/W 401 CR.P.C. BY THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO SET ASIDE THE JUDGMENT AND ORDER OF DISMISSAL AND MODIFICATION PASSED BY THE V ADDL. DIST. AND S.J., MANDYA IN CRL.A.NO.61/2014 DATED 15.07.2015 IN NOT SETTING ASIDE THE JUDGMENT OF CONVICTION AND SENTENCE PASSED BY THE PRL. CIVIL JUDGE AND JMFC, MALAVALLI, IN C.C.NO.602/2011 DATED 17.11.2014, BY ALLOWING THE PETITION HEREIN AND TO REMAND THE MATTER TO THE TRIAL COURT FOR FRESH DISPOSAL AFTER RECORDING FURTHER DEFENSE EVIDENCE OF THE PETITIONER HEREIN.

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

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ORDER

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This revision petition is filed challenging the order of dismissal of the appeal and modification of sentence passed by the V Additional District and Sessions Judge, Mandya in Crl.A.No.61/14 dated 15.07.2015, whereby, the learned Sessions Judge confirmed the judgment of conviction, but modified the order of sentence passed by the Principal Civil Judge and JMFC, Malavalli in C.C.No.602/2011 dated 17.11.2014 from simple imprisonment for six months to imprisonment for a period of six months and also to pay a fine of Rs.1,80,000/-.

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The revision petitioner was the accused and respondent was the complainant before the trial court. The parties will be referred as 'complainant' and 'accused' as per their respective ranks held before the trial court for the sake of convenience.

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3. Factual matrix of the case :

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The respondent/complainant filed a private complaint against the accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short hereinafter referred to as ‘N.I. Act’) before the JMFC Court, Malavalli. It is the case of the complainant that the accused approached the complainant for financial assistance to meet his legal necessity that is for discharge of hand loan and to meet house hold expenses. Accordingly, the accused received a sum of Rs.1,70,000/from complainant on 27.01.2011 and in discharge of the said hand loan, the accused gave a post-dated cheque of State Bank of Mysuru, Channapatna branch dated 02.05.2011 in favour of complainant. As the accused failed to repay the amount within a stipulated time, the complainant

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presented the cheque in the bank for encashment of the cheque amount. But the said cheque came to be dishonored with an endorsement “funds insufficient”. Thereafter, again complainant approached the accused demanding him to pay the amount due by him, but accused did not repay the amount. Then, the complainant got issued a legal notice on 27.05.2011 which was duly served on the accused. In spite of that, the accused neither replied the notice nor paid the amount. Hence, the complainant filed the above said complaint under N.I. Act.

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Before the trial court, the complainant got examined himself as PW.1 and got marked five documents as Exs.P1 to P5. The accused got examined himself as DW.1, but he has not produced any documentary evidence. After hearing the arguments, learned JMFC convicted the accused for the offence punishable under Section 138 of N.I. Act. and sentenced him to undergo simple imprisonment for a period of six months.

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Aggrieved by the judgment of the learned JMFC, the accused preferred an appeal before the Additional District and Sessions Court. After hearing the arguments of learned counsel for both the sides, the learned Sessions Judge confirmed the conviction of the accused for the offence under Section 138 of N.I. Act and also order of sentence of imprisonment of six months, but in addition to sentence of imprisonment already imposed by trial court, the learned Sessions Judge ordered the accused to pay a fine of Rs.1,80,000/- also. The legality and correctness of both the orders are now assailed by the revision petitioner/accused in this revision petition.

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6. Arguments:

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Heard Sri. B. Vijay Shetty, learned counsel for revision petitioner and Sri. Srinivas B.S., learned counsel for Sri. B.L.Sanjeev, counsel for respondent through video conference.

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Learned counsel for the revision petitioner argued that dismissal of the appeal and modifying the order of

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sentence passed by the learned Sessions Judge is against the principles of natural justice and it is erroneous. Learned counsel argued that such an order is not sustainable in the eye of law. It is further argued that both learned JMFC and learned Sessions Judge have not appreciated the evidence of revision petitioner in proper perspective. Though the evidence given by the complainant/respondent was very weak, inconsistent and ambiguous, but still both the courts have convicted the accused. It is argued by the learned counsel that though the learned JMFC held that the complainant has not produced any document to show his financial capacity to lend such huge money, but in spite of that, conviction finding is given. Both the courts have convicted the accused by raising the presumption against accused which is erroneous. It is further argued that both the Courts have failed to taken into consideration that the four cheques were given by accused to one Mr.Kumar who is the relative of the complainant. Accused had given signed blank cheques to Kumar. But the said Kumar died in the hospital. The complainant has taken disadvantage of the said situation and filed a false case against the accused by misusing

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one of the said cheques. It is further argued that the complainant is a stranger to the revision petitioner. Both the Courts have failed to consider that the complainant has failed to discharge his initial burden to prove that he has got financial capacity to pay huge money. Therefore, no presumption could have been raised against accused. It is further argued that though the accused has preferred the appeal for setting aside the judgment of conviction and even though no appeal was preferred by complainant seeking enhancement of the sentence, the learned Sessions Judge passed the impugned judgment enhancing the sentence by imposing fine also in addition to imprisonment order passed by learned JMFC. This is nothing but exceeding the power vested with the learned Sessions Judge under the Code of Criminal Procedure, 1973 (for short hereinafter referred to as Cr.P.C.), in an appeal filed by the accused to set-aside the conviction. With these main grounds, learned counsel prayed to set aside the judgment of conviction and order of sentence passed by the learned Sessions Judge as well as the judgment of conviction and order

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of sentence passed by learned JMFC and to acquit revision petitioner/accused.

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Against this learned counsel for

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respondent/complainant supported the judgment of Trial Court as well as the Appellate Court. Learned counsel argued that both the courts have rightly appreciated the evidence on record and came to the conclusion that the complainant has proved the ingredients of Section 138 of N.I. Act and rightly convicted the accused. Though learned JMFC not awarded the compensation, the learned Sessions Judge awarded the compensation which is just and proper and there is no need to interfere with the same. With these main arguments, the learned counsel prayed to dismiss the revision petition.

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I have perused the revision petition, judgments of the learned JMFC and learned Sessions Judge and also gone through the evidence on record.

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From the above materials, the point that arise for my consideration is:

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"Whether the impugned judgment of conviction and order of sentence passed by both courts are correct, legal and in conformity with the settled principle regarding appreciation of evidence in cases under Section 138 of the Negotiable Instruments Act, 1881, which are popularly called as cheque bounce cases ?"

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11. Discharge of initial burden by

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complainant/respondent and presumption under N.I.Act:

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Before the trial court, the complainant got examined himself as PW.1 and filed his examination-in-chief affidavit which is nothing but re-iteration of contents of his written complaint. He has produced the cheque issued by accused which is at Ex.P1 dated 02.05.2011 for Rs.1,70,000/-. Ex.P2 is the bank endorsement which shows that the said cheque was dishonored for the reason ‘funds in sufficient’. Ex.P3 is the legal notice issued to the accused by complainant. He has also

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produced the postal receipt and postal acknowledgment (Exs.P4 and P5) which shows that notice was duly served on the accused.

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In the cross-examination by accused, it is suggested to the complainant that the accused is his relative and the same is admitted by complainant. But he has denied that four blank cheques were given by accused to one Kumar. The complainant has denied the suggestion that he has misused those cheques which were given to said Kumar. In the cross-examination, the complainant has stated that he has sold his land bearing Sy.No.12 to the extent of 20 guntas and received a sum of Rs.4,36,000/- as consideration amount and the same was kept in his house, at the time of giving financial assistance to accused. Out of the said amount, he has given a sum of Rs.1,70,000/- to the accused. The said evidence is not denied by the accused. The cross-examination of complainant if perused, it is evident that the accused does not disputes the financial capacity of the complainant at the time of borrowing the hand loan. It is also evident that the demand legal notice

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was duly served on the accused, but no reply was given. It is suggested to PW.1 that accused did not reply to the notice as his father name was not properly mentioned in the notice, but the same is denied by the complainant. The accused has not denied issuance of cheque belonging to him, his signature on the cheque, receipt of demand legal notice and financial capacity of the complainant. Further under Sections 118 and 139 of N.I.Act, there is a presumption in favour of the complainant. The Hon'ble Supreme Court in the case of Kalamani Tex and another Vs. P. Balasubramanian reported in (2021) 5 SCC 283 considered the presumption under N.I Act and how the accused has to rebut such presumption. It is held at paragraph No. 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 NIA. The statute mandates that once the signature(s) of an accused on the cheque / negotiable instrument are established, then these "reverse onus" clauses

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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 puportedly 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 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

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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 case of APS FOREX SERVICES PRIVATE LIMITED Vs. SHAKTI INTERNATIONAL FASHION LINKERS AND OTHERS - (2020) 12 SCC 724 considered in detail the presumption under N.I Act and held that when the financial capacity of the complainant is not questioned, then there is no necessity for the complainant to adduce evidence in proof of his financial capacity. It is held at paragraph Nos.8, 8.1, 8.2 and 8.3 as under:

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8. On the presumption under Section 139 of the N.I. Act, few decisions of this Court are required to be referred to and considered.

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8.1 In K.N. Beena V. Muniyappan, (2001) 8

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SCC 458 , it is observed and held by this Court that 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

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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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8.2 In Rangappa Vs Sri Mohan, (2010) 11 SCC 441 again, this Court had an occasion to consider the 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 this Court on Sections 118(a) and 139 of N.I. Act, it is observed and 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 there is existence of legally enforceable debt or liability can be contested. In

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Para 27 this Court observed and has held as under:(SCC PP.453-54)

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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

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discharge an unduly high standard of proof.”

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8.3 In Kishan Rao Vs. Shankargouda, (2018) 8 SCC 165 after considering the decision of this Court in Kumar Exports V. Sharma Carpets, (2009) 2 SCC 513 , it is observed and held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. This Court in para 19 of that judgment considered paras 14, 15, 18 & 19 of the decision in Kumar Exports (2009) 2 SCC 513 as under: ( Kishan Rao V. Shankargouda, (2018) 8 SCC 165 , SCC PP.17172)

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19. This Court in Kumar Exports v. Sharma Carpets (2009) 2 SCC 513, had considered the provisions of the Negotiable Instruments Act as well the Evidence Act. Referring to Section 139, this Court laid down the following in paras 14, 15, 18 and 19 : (SCC pp.519-20)

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“14. Section 139 of the Act provides that it shall be presumed, unless the contrary

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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 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.

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Presumption literally means “taking as true without examination or proof”. * * *

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18. Applying the definition of the word “proved” in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a

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prima facie case for a party for whose benefit it exists.

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19. The use of the phrase “until the contrary is proved” in Section 118 of the Act and use of the words “unless the contrary is proved” in Section 139 of the Act read with definitions of “may presume” and “shall presume” as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.”

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Therefore, in view of the principles stated in the above referred decisions of Hon'ble Supreme Court, if the oral evidence of PW.1 coupled with the documentary evidence at Exs.P1 to P5 and the presumption under N.I.Act, are

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considered, it is evident that the complainant has discharged the initial burden casted upon him to prove the ingredients of Section 138 of N.I. Act. When once the complainant has discharged his initial burden and the presumption under N.I Act is in favor of complainant, then the accused has to rebut the presumption under Section 139 of N.I. Act, either by crossexamining PW.1 or also by leading his defence evidence. The standard of proof for doing so is that of preponderance of probabilities.

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15. Defence of accused /revision petitioner:

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In the defence evidence of accused/revision petitioner, he has stated that he has given four cheques to one Kumar in lieu of obtaining a loan of Rs.50,000/- from Kumar. The said Kumar was admitted to the hospital and then he died. He has also stated cheque numbers as 446202, 446203, 446204 and 446205. Ex.P1/cheque bears No.446203. The revision petitioner/accused has not produced any document to show that what happened to other three cheques. Accused has not adduced any evidence to show that he has given any such

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cheques to said Kumar. Accused has not examined any person or relatives of said Kumar. Even the death certificate of the Kumar is not produced to show that when the said Kumar died. Admittedly, the complainant and accused are relatives. Defence of the accused is that cheques were misused by the complainant. But no steps were taken by the accused to initiate any criminal action against the complainant, if cheques are misused or a false case has been filed against the accused by the complainant. In spite of service of legal notice, he has not given reply and denied the contents of demand notice. In the cross-examination, the accused admits that he is having a bank account in number of other banks. He has opened the account at Janatha Co-Operative Bank. Therefore, it is evident that accused is well versed with cheque transaction. The accused states that he has given amount to Kumar to give it to one Renukamma. Neither any legally admissible evidence is forthcoming in this regard nor he has examined the said Renukamma. He again states that cheque book was stolen from his house along with other materials. He states that police

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searched them and returned the stolen material. He further states that he has given one cheque bearing No.446201 to his office and the said cheque was also dishonored, but he settled the said matter. He has not produced any document to prove his contention regarding theft of the cheque book from his house. His evidence in the cross-examination is inconsistent with his defence that he has given four cheques to one Kumar.

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If the defence evidence of accused is considered, then it is evident that, it is only a defence taken for the sake of defence and there is no truth in it. There is no denial or otherwise the financial capacity of the complainant. On the other hand, the complainant has got agricultural land. PW.1 has stated that he has sold the land and out of the amount received by such sale, he has given the money to the accused. The complainant not producing the sale deed regarding selling of his land, does not mean that his version is not true, when the said evidence on oath is not denied by the accused. Therefore, the question of producing the sale deed does not arise. Moreover, the contention of the accused regarding theft

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of the cheque and giving amount to Kumar are concerned, it is only the imaginary defence of accused, and there is no truth in it. Accused has not produced any legally admissible evidence to probablise his defence or to rebut the presumption in favor of Complainant. Therefore, the finding of the trial court as well as the first appellate court, that the complainant has proved that the accused has issued the cheque for Rs.1,70,000/- in discharge of legally recoverable debt or for enforcement of legally recoverable liability is legal and correct. The said cheque was dishonored due to insufficient funds. But in spite of receiving the legal notice, the accused/revision petitioner kept quite without giving reply to the said notice or taken any steps to repay the amount. The evidence on record shows that the complainant has proved the ingredients of offence under Section 138 of N.I. Act. Therefore, the finding of guilt of accused arrived at by both the courts cannot be said as either illegal or capricious or needs interference of this court.

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Powers of Appellate Court (Sessions court) to modify the sentence in an appeal challenging the conviction:

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The trial court has imposed sentence of imprisonment for a period of six months. But the learned Sessions Judge, though confirmed the conviction and sentence of imprisonment, in addition has directed the accused to pay a fine of Rs.1,80,000/and to pay a sum of Rs.1,70,000/- as compensation to the complainant.

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The learned counsel for the revision petitioner rightly argued that the learned Sessions Judge has exceeded his powers vested in appellate court under the provisions of Cr.P.C. in an appeal filed by the accused challenging the judgment of conviction and seeking to set aside the judgment of conviction. The order of sentence passed by the learned Sessions Judge is nothing but enhancement of sentence. For appreciating the said arguments, let me refer to the provisions regarding Section 386 Cr.P.C. which reads as under:

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“ Section 386. Powers of the Appellate Court. - After perusing such record and hearing the appellant or his pleader, if he appears, and the Public Prosecutor, if he appears, and in case of an appeal under section 377 or section 378, the accused, if he appears, the Appellate Court may, if it considers that there is no sufficient grounds for interfering, dismiss the appeal, or may-

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(a) in an appeal from an order of acquittal, reverse such order and direct that further inquiry be made, or that the accused be re-tried or committed for trial, as the case may be, or find him guilty and pass sentence on him according to law;

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(b) in an appeal from a conviction –

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(i) reverse the finding and sentence and acquit or discharge the accused, or order him to be re-tried by a Court of competent jurisidiction subordinate to such Appellate Court or committed for trial, or

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(ii) alter the finding, maintaining the sentence, or

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(iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the same;

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(i) reverse the finding and sentence and acquit or discharge the accused or order him to be re-tried by a Court competent to try the offence, or

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(ii) alter the finding maintaining the sentence, or

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(iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, so as to enhance or reduce the same;

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(d) in an appeal from any other order, alter or reverse such order;

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(e) make any amendment or any consequential o r incidental order that may be just or proper:

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Provided that the sentence shall not be enhanced unless the accused has had an opportunity of showing cause against such enhancement:

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Provided, further that the Appellate Court shall not inflict greater punishment for the offence which in its opinion the accused has committed, than might have been inflicted for that offence by the Court passing the order or sentence under appeal.”

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On perusing Section 386(b)(iii) Cr.P.C, it is evident

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that the Appellate Court though can alter the nature or the extent, or the nature and extent, of the sentence, but not to enhance the same. The learned Sessions Judge of the first appellate court confirmed the conviction, but enhanced the sentence by imposing the fine in addition to imprisonment for a period of six months awarded by the trial court. This is nothing but enhancing the sentence by the appellate court by exceeding the power vested in the first appellate court under Section 386 Cr.P.C. It is settled principle of law that the appellate court

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cannot enhance any sentence in an appeal seeking setting aside of conviction. The learned sessions judge has not assigned any reason for imposing fine. In the guise of awarding compensation, the learned sessions judge has imposed fine of Rs.1,80,000 in addition to imprisonment of six months awarded by the JMFC Court. This is nothing but enhancement of sentence. The sessions court which is of the appellate court in this case has no power under section 386 Cr.PC to enhance the sentence in the guise of modification of sentence for awarding compensation. Such an order needs to be rectified and corrected by this court in this revision petition.

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The learned counsel for the revision petitioner argued that the matter may be remanded to the first appellate court for reconsideration of the appeal. But in my considered view, the remand of the matter is not required in this case. Because the finding of the trial court as well first appellate court, regarding proof of ingredients under Section 138 of N.I Act, by the complainant does not need any interference. There is legally admissible and reliable evidence on record to prove

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the same. The order of conviction of the accused for offence under Section 138 of N.I. Act needs no fresh re-consideration by JMFC court or the appellate court. The cheque was issued in the year 2011. Practically ten years have been elapsed, therefore, at this point of time, it is not desirable to remand the matter only for considering the aspect regarding enhancement of the sentence or imposing proper sentence by the first appellate court. It is settled principle of law that matter is to be remanded afresh only in exceptional circumstances. There shall be a valid ground to remand the matter. The learned sessions judge has not assigned any reasons for imposing additional sentence of fine. As stated above, there is no need for fresh consideration of evidence or needs fresh finding regarding proof of offence under Section 138 of the N.I Act. There is no error or illegality either in recording of the evidence or in arriving at finding of guilt of the accused and passing conviction judgment by both the courts.

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On the other hand, this court under Section 397 Cr.P.C. can exercise revision power to secure the ends of

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justice. The High court in its revisional jurisdiction can always grant suitable relief justified by law as well as facts and circumstances of a particular case to do complete justice. This court can suo-moto to satisfy regarding correctness, legality or propriety of any finding, sentence or order, recorded or passed, and as to the regularity of any proceedings of such inferior Court. This court can modify the sentence which will not amount to enhancement of the same in view of provisions of Sections 397, 401 and 386 Cr.P.C. Further Section 401 subclause(1) of Cr.P.C., clearly states that High Court can also in its discretion, exercise any of the powers conferred on a Court of Appeal by Sections 386, 389, 390 and 391 or on a Court of Session by Section 307. It further provides that no order under this section shall be made to prejudice the accused or other person unless he had an opportunity of being heard either personally or by pleader in his own defence. It is well settled that High Court has got suo-moto powers of enhancement under revision jurisdiction, ofcourse after giving an opportunity of hearing to accused. Therefore, in the light of these

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provisions, the correctness and legality of imposing proper sentence in a peculiar facts and circumstances of this case is to be considered.

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22. Appropriate Sentence:

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The Hon’ble Supreme Court in the case of Damodar S. Prabhu Vs. Sayed Babalal H ., (2010) 5 SCC 663 elaborated the object of bringing Section 138 of N.I. Act into statute and insertion of Section 138 to 142 of the N.I. Act by Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988). The Hon'ble Supreme Court held that in respect of offence of dishonor of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect and it is held at para Nos.17 and 18 as under:

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“17. In a recently published commentary, the following observations have been made with regard to the offence punishable under Section 138 of the Act.

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"...Unlike that for other forms of crime, the punishment here (insofar as the complainant

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is concerned) is not a means of seeking retribution, but is more a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque in jail. The threat of jail is only a mode to ensure recovery. As against the accused who is willing to undergo a jail term, there is little available as remedy for the holder of the cheque.

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If we were to examine the number of complaints filed which were compromised' or settled' before the final judgment on one side and the cases which proceeded to judgment and conviction on the other, we will find that the bulk was settled and only a miniscule number continued."

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18. It is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect. There is also some support for the apprehensions raised by the learned Attorney General that a majority of cheque bounce cases are indeed being compromised or settled by way of compounding,

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albeit during the later stages of litigation thereby contributing to undue delay in justice delivery. The problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute. Furthermore, the written submissions filed on behalf of the learned Attorney General have stressed on the fact that unlike Section 320 CrPC, Section 147 of the Negotiable Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court”

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23. In the case of Somnath Sarkar v. Utpal Basu

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Mallick and another, (2013) 16 SCC 465 , the Hon’ble Supreme Court considered the situations in which the court may remain content with the imposition of a fine without any sentence of imprisonment. At paragraph No.15, the relevant portion reads as under:

¶137

“15…..... There is considerable judicial authority for the proposition that the courts can reduce the period of imprisonment depending upon the nature of the transaction, the bona fides of the

¶138

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accused, the contumacy of his conduct, the period for which the prosecution goes on, the amount of the cheque involved, the social strata to which the parties belong, so on and so forth. Some of these factors may indeed make out a case where the court may impose only a sentence of fine upon the defaulting drawer of the cheque. There is for that purpose considerable discretion vested in the court concerned which can and ought to be exercised in appropriate cases for good and valid reasons. Suffice it to say that the High Court was competent on a plain reading of Section 138 to impose a sentence of fine only upon the appellant. In as much as the High Court did so, it committed no jurisdictional error….....”

¶140

The Hon’ble Supreme court in case of Bir Singh v.

¶141

Mukesh Kumar, (2019) 4 SCC 197 followed the judgment in the case of R.Vijayan Vs. Baby - ( 2012) 1 SCC 260 and at para No. 25 held as under:

¶142

“25 . In R. Vijayan V. Baby this Court observed that the object of Chapter XVII of the Negotiable Instruments Act is both punitive as also

¶143

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compensatory and restitutive. It provides a single forum and single proceeding for enforcement of the criminal liability by reason of dishonor of cheque and for enforcement of the civil liability for realisation of the cheque amount, thereby obviating the need for the creditor to move two different fora for relief. This Court expressed its anguish that some Magistrates went by the traditional view, that the criminal proceedings were for imposing punishment and did not exercise discretion to direct payment of compensation, causing considerable difficulty to the complainant, as invariably the limitation for filing civil cases would expire by the time the criminal case was decided.”

¶145

Further, the Hon’ble Supreme Court in a decision

¶146

reported in 2021 SCC Online SC 788 in the case of Triyambak S. Hegde Vs. Sripad has referred the decision of Kaushalya Devi Massand Vs. Roopkishore reported in AIR 2011 SC 2566 and considered the nature of punishment when the transaction is not an out and out commercial transaction. In the above referred decision, the very case of the appellant

¶147

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before the trial court was that the respondent was in financial distress and he sought some financial assistant and the amount was given. Therefore, the Hon’ble Supreme Court at paragraph Nos.21 and 22 of the above decision has discussed these aspects and thought it proper to modify the sentence of fine only and set aside and the sentence of imprisonment of six months and restricted into only fine and compensation was awarded. The Hon'ble Supreme Court at paragraph Nos.21 and 22 of the above decision, observed as under.

¶149

21. Having arrived at the above conclusion, it would be natural to restore the judgment of the Learned JMFC. Though in that regard, we confirm the order of conviction, we have given our thoughtful consideration relating to the appropriate sentence that is required to be imposed at this stage, inasmuch as: whether it is necessary to imprison the respondent at this point in time or limit the sentence to imposition of fine. As noted, the transaction in question is not an out and out commercial transaction. The very case of the appellant before the Trial Court was that the respondent was in financial distress and it is in such event, he had offered to sell his house for which the

¶150

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advance payment was made by the appellant. The subject cheque has been issued towards repayment of a portion of the advance amount since the sale transaction could not be taken forward. In that background, what cannot also be lost sight of is that more than two and half decades have passed from the date on which the transaction had taken place. During this period there would be a lot of social and economic change in the status of the parties. Further, as observed by this Court in Kaushalya Devi Massand V. Roopishore Khore, (2011) 4 SCC 593, the gravity of complaint under N.I Act cannot be equated with an offence under the provisions of the Penal Code, 1860 or other criminal offences. In that view , in our opinion, in the facts and circumstances of the instant case, if an enhanced fine is imposed it would meet the ends of justice. Only in the event the respondentaccused not taking the benefit of the same to pay the fine but committing default instead, he would invite the penalty of imprisonment. Hence, appropriate modification is made to the sentence in the manner as indicated hereinbelow:

¶152

In view of the principles stated in the above referred decisions, it is evident that imposing of imprisonment though is

¶153

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provided, but it is scarcely followed by the courts.. The court concerned shall exercise the discretion vested in it in appropriate cases for good and valid reasons to impose proper sentence as provided under N.I.Act. The Court has to keep in mind, the compensatory aspect of the remedy over the punitive aspect by considering the facts and circumstances of the case.

¶155

27. Conclusion :

¶156

If the punishment awarded in this case is tested with touch stone of the principles stated by the Hon'ble Supreme Court in the above referred decisions, it is evident that the sentence of imprisonment awarded by the trial court and confirmed by the first appellate court is not justified. In the case on hand, it is a monetary loss to the complainant/respondent. Therefore imposing the sentence of imprisonment will not serve any purpose. Keeping in mind the object and purpose for which the N.I. Act was amended, period of pendency of case, nature of transaction, the relationship of complainant and accused and in view of the discussions made above, in my considered view, the sentence of imprisonment is

¶157

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to be set aside and modified to the extent of imposing sentence of fine only by directing the accused to pay a fine of Rs.1,80,000 and out of which awarding Rs.1,70,000 as compensation, which will meet the ends of justice.

¶159

Therefore, in view of the facts and circumstances of this case, evidence placed before the Court, principles stated by the Hon’ble Supreme Court of India referred supra and discussions made above, in my considered view, ends of justice will be met by modifying the judgment of first appellate court as indicated below.

¶160

Accordingly, I pass the following:

¶161

ORDER

¶162

(i) The revision petition is partly allowed.

¶163

(ii) The judgment of conviction passed by the trial court in C.C.No.602/2011 dated 17.11.2014 which is confirmed by learned Sessions Judge in Crl.A.No.61/2014 dated 15.07.2015 for the offence punishable under Section 138 of N.I Act. is confirmed.

¶164

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(iii) The order of sentence of imprisonment and

¶166

payment of fine passed by the V Additional District and Sessions Judge, (then Presiding Officer, Fast Track Court), Mandya in Crl.A.No.61/2014 dated 15.07.2015 is modified as under:-

¶167

(a) The judgment and order of sentence passed by the JMFC and the learned Sessions Judge directing the accused/revision petitioner to undergo Simple Imprisonment for a period of six months is set aside.

¶168

(b) The order of learned Sessions Judge sentencing the revision petitioner/accused to pay a fine of Rs.1,80,000/- is upheld. Out of fine amount, a sum of Rs.1,70,000/- is directed to be paid to the complainant/respondent as compensation under Section 357(3) Cr.P.C and remittance of fine of Rs.10,000/- to the State is confirmed. In default of payment of fine, the revision petitioner has to undergo Simple Imprisonment for a period of six months.

¶169

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(iv) The compensation amount of Rs.1,70,000/- ordered

¶171

shall be paid to the complainant/respondent by the revision petitioner/accused within three months from the date of receipt of certified copy of this order.

¶172

(v) Send back the records to the trial court.

¶173

Sd/JUDGE

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H.N. Ravi v. Guruvegowda

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H.N. Ravi v. Guruvegowda

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