Dismissed

Sri R N Murthy v. Sri Mustaq Ahmad

Karnataka HC26 Sept 2023CRL.A/1226/2012

Case brief

AI extract

What is this about?

In this criminal appeal under Section 378 Cr.P.C, the appellant challenged the trial Court's acquittal of the respondent under Section 138 NI Act. The High Court upheld the acquittal, finding the complainant failed to prove consideration and noting double prosecution of the accused. The appeal was dismissed confirming the trial Court's order.

What did the court decide?

The appeal filed by the complainant is dismissed and the acquittal of the respondent is confirmed.

Sri R N Murthy Vs Sri Mustaq Ahmad — Cheque Dishonour | Karnataka HC (2023)

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1 CRL.A NO.1226 OF 2012

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26^TH DAY OF SEPTEMBER, 2023

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BEFORE

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THE HON'BLE MS.JUSTICE J.M.KHAZI

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CRIMINAL APPEAL NO.1226 OF 2012

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BETWEEN:

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SRI R. N. MURTHY S/O. LATE M. RANGADHAMAPPA AGED ABOUT 59 YEARS R/AT M/S NARASIMHA SILK INDUSTRIES NO.11, 8^TH CROSS, SUDHAMANAGAR BANGALORE - 560 027.

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…APPELLANT

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(BY SRI. D.R.RAJASHEKARAPPA, ADVOCATE)

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AND:

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SRI MUSTAQ AHMAD S/O. LATE SYED MOHAMMED HANEEF AGED ABOUT 62 YEARS C/O. MHT ROAD LINES NO.4/1, NEW MENTAL HOSPITAL ROAD (HOSUR ROAD) AL AMEEN COLLEGE BANGALORE - 560 027.

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…..RESPONDENT

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(BY SRI. S.G.MUNISWAMY GOWDA, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET ASIDE THE JUDGMENT, DATED 23.07.2012 MADE BY THE 19^TH ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BANGALORE CITY, IN C.C NO. 31625/2000 ACQUITTING THE RESPONDENT OF THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE N.I. ACT AND TO CONVICT THE RESPONDENT FOR COMMISSION OF THE SAID OFFENCE AND FURTHER BE PLEASED TO GRANT ANY OTHER RELIEF OR

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2 CRL.A NO.1226 OF 2012

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RELIEFS THAT THIS HON'BLE COURT MAY DEEM FIT TO GRANT IN THE CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED ON 17.07.2023 COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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J U D G M E N T

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This appeal is by complainant challenging the acquittal of respondent/accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘N.I.Act’).

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For the sake of convenience, the parties are

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referred to by their rank before the trial Court.

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Initially complainant filed the complaint against three accused. The present respondent is accused No.3.

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It is the case of the complainant that he is a dealer in silk and also a silk manufacturer. Accused Nos.1 and 2 are his relatives and known to him since two years. Accused Nos.1 and 2 have sold a property belonging to accused No.1 to accused No.3 and in respect of the said

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3 CRL.A NO.1226 OF 2012

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sale transaction, accused No.3 was due in a sum of Rs.5 lakhs and towards repayment of the same, he issued a post dated 20.12.1999 cheque. The marriage of daughter of accused No.1 was fixed to be held on 13.12.1999 and as such he was in need of money urgently. In this background accused Nos.1 and 2 approached the complainant with a request to give hand loan of Rs.5 lakhs. Accordingly complainant lent Rs.5 lakhs to accused No.1 on the basis of cheque issued by accused No.3 and handed over the subject cheque to the complainant. However, when complainant presented the subject cheque through his banker, it was returned dishonoured on the ground of "Insufficiency of funds". After issuing legal notice, he filed the complaint.

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After recording of sworn statement, vide order dated 23.07.2012, the trial Court took cognizance against accused No.3 only and as such the complaint was continued against him.

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4 CRL.A NO.1226 OF 2012

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After due service of summons, accused No.3 appeared and contested the case. According to accused No.3, his brother Mohammed Iliyas was looking to purchase an immovable property. In this connection, accused No.3 came in contact with accused No.2. Accused No.2 represented that already he has entered into a sale agreement dated 27.12.1995 to purchase a site measuring 40 into 60 feet and offered to sell it to Mohammed Ilyas for Rs.12 lakhs by canceling the agreement in his name. In fact, he executed a sale agreement dated 12.11.1999.

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6.1. Since Mohammed Iliyas was out of station,

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accused No.3 paid a sum of Rs.2 lakhs as advance on 12.11.1999 and Rs.5 lakhs on 17.11.1999. He also issued the subject cheque for Rs.5 lakhs to accused No.2 with an understanding that it shall be presented for encashment only after due registration. It was issued only by way of security to the sale transaction. However, accused No.2 failed to comply with the terms of the agreement and as such the sale transaction could not go through. Accused

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5 CRL.A NO.1226 OF 2012

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No.3 requested to return the cheque. Instead of returning the subject cheque, he has handed over the same to complainant and got filed a false complaint. In fact, accused No.3 was surprised to receive legal notice from the complainant. He had duly supplied it.

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In fact accused No.2 has also sent a legal notice to Mohammed Ilyas and he has sent a suitable reply. When accused No.3 and his brother Mohammed Iliyaz tried to put up compound around the property in question, it was objected to by one K.A.Nagaraj by claiming that he has purchased the said property through sale deed dated 07.08.1998. One Susheela also laid claim over the said property through sale deed dated 07.08.1998 executed by one Lakshman, the brother-in-law of Susheela. To harass accused No.3, this complaint is filed through the complainant and sought for dismissal of the same.

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In order to prove the allegations against accused No.3, complainant has examined himself as PW-1 and relied upon Ex.P1 to 22.

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6 CRL.A NO.1226 OF 2012

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During the course of his statement under Section 313 of Cr.P.C, accused has denied the incriminating evidence.

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In fact, he has entered into the witness box and examined himself as DW-1. He has relied upon Ex.D1 to 20.

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Vide the impugned judgment and order, the trial Court accepted the defence of accused No.3 and acquitted him.

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Aggrieved by the same, complainant is before this Court contending that the impugned judgment and order is illegal, contrary to law, facts and probabilities of the case when accused No.3 admit the issue of cheque and it bears his signature, presumption under Section 118 and 139 of N.I.Act is attracted, the trial Court has erred in accepting the defence of accused No.3 that the subject cheque is to be presented at the time of registration. Therefore, there was no impediment for the complainant to present the cheque and proceed against accused No.3.

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7 CRL.A NO.1226 OF 2012

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Consequently, the trial Court has erred in holding that the presentation of cheque was premature.

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The trial Court has also erred in holding that complainant was aware of the transaction between accused Nos.2 and 3. The reference to the sale transaction between accused Nos.2 and 3 is made only with reference to the circumstances under which complainant came in possession of the subject cheque in his capacity as a holder in due course. The trial Court has also erred in relying upon Ex.P11 to 15. The trial Court has also erred in holding that the complainant has not proved the actual payment of Rs.5 lakhs to accused Nos.1 and 2, which is not in dispute. The trial Court has also erred in holding that accused No.3 has rebutted the presumption under Section 139 of N.I.Act and therefore shifting the burden on the complainant. Viewed from any angle, the impugned judgment and order is not sustainable and prays to allow the appeal, convict and sentence the accused No.3 appropriately.

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8 CRL.A NO.1226 OF 2012

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Heard arguments of both sides and perused the record.

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Thus it is the definite case of the complainant that accused No.3 issued the subject cheque to accused Nos.1 and 2 during the sale transaction between accused Nos.2 and 3 and on the strength of the said cheque, accused Nos.1 and 2 borrowed a sum of Rs.5 lakhs from the complainant and in his capacity as holder-in-due course, when complainant presented it for realization, it was dishonoured for want of sufficient funds and after issuing legal notice has filed a complaint.

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On the other hand, the accused No.3 has taken up a specific defence that he issued the subject cheque to accused No.2. In connection with the sale transaction of immovable property entered into between accused No.2 and his brother Mohammed Ilyas, with an understanding that it should be presented at the time of registration. As the sale transaction could not conclude, he requested

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9 CRL.A NO.1226 OF 2012

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accused No.2 to return the cheque. Instead of returning it, he got filed complaint through the complainant.

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When accused No.3 admit that the cheque in question belongs to him, drawn on his account maintained with his banker and it bears his signature, the presumption under Section 118 and 139 of N.I.Act comes into operation that the subject cheque was issued towards repayment of any legally recoverable debt or liability and the burden is on accused No.3 to rebut the same and in that event, the burden shifts on the complainant to prove the

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circumstances under which the cheque came to be issued to him in his capacity as a holder in due course. Of course it is for the accused No.3 to rebut presumption by preponderance of probabilities, whereas it is for the complainant to prove his case beyond reasonable doubt, if the accused No.3 is able to rebut the presumption.

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The documents produced by accused No.3 coupled with his oral testimony and also the crossexamination of PW-1 prove the fact that the cheque in

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10 CRL.A NO.1226 OF 2012

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question came to be issued by accused No.3, in connection with sale agreement entered into between accused No.2 and Mohamed Ilyas, the brother of accused No.3. Admittedly, the sale transaction between the owner of the land in question and Muhammad Ilyas, through accused No.2 could not be completed, as some third parties laid claim over the said property as purchasers prior to accused No.2. The evidence placed on record makes it evident that complainant was aware of the fact that the sale transaction between accused No.2 and Mohammed Ilyas is not concluded. Such being the case, it cannot be accepted that the cheque in question was issued towards repayment of any legally recoverable debt or liability.

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Consequently, the burden shifts on the

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complainant to prove that he has in fact paid Rs.5 lakhs and came in possession of the subject cheque as consideration for the same. Moreover, as evident from the documents produced by accused No.3, accused No.2 has also prosecuted accused No.3 in respect of the subject cheque,

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11 CRL.A NO.1226 OF 2012

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without revealing the fact that already through complainant, accused No.3 is being prosecuted for dishonour of the said cheque. In the said complaint, the present complainant is also a witness. As rightly held by the trial Court, in respect of dishonour of the cheque in question, the accused No.3 is being prosecuted both by complainant as well as accused No.2.

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Moreover, after the accused No.3 rebutted the presumption and the burden shifted on the complainant, he is required to prove the actual passing of consideration from him to accused No.2. As rightly observed by the trial Court, in the complaint as well as in the legal notice, the complainant has pleaded that he paid Rs.5 lakhs to accused No.1 for celebration of his daughter's marriage, whereas before the Court, he has stated that the said amount was paid for business purpose. During the course of evidence, complainant has stated that since he was not having ready cash, he borrowed the said amount from others and paid to accused Nos.1 and 2. However, he is not in a position to establish from whom he borrowed the said amount. From

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12 CRL.A NO.1226 OF 2012

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the evidence placed on record it is clear that only to prosecute the accused No.3, accused Nos. 1 and 2 have got filed this complaint through the complainant and he is not in fact a holder in due course of the subject cheque.

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Appreciating the oral and documentary evidence in right perspective, the trial Court has come to a correct conclusion that the charges leveled against accused are not proved beyond reasonable doubt and acquitted accused No.2. On re-appreciation of the oral and documentary evidence placed on record, this Court does not find any justifiable grounds to interfere with the well reasoned judgment of the trial Court. Consequently, the appeal fails

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and accordingly, I proceed to pass the following:

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ORDER

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(i) The appeal filed by the complainant is dismissed.

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(ii) The impugned judgment and order of the trial Court is confirmed.

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13 CRL.A NO.1226 OF 2012

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(iii) Registry is directed to return the trial Court

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record as well as Sessions Court records

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along with copy of this order forthwith.

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Sd/JUDGE

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Sri R N Murthy v. Sri Mustaq Ahmad

Case brief

What is this about?

What did the court decide?

Sri R N Murthy v. Sri Mustaq Ahmad

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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