Allowed

Mr. Vinay Shiva Gowda v. Mr. Avinash Kumar P Ghatge

Karnataka HC14 Dec 2023CRL.A/1449/2018

Case brief

AI extract

What is this about?

In an appeal under Section 378(4) Cr.P.C against a conviction be upheld where the trial court acquitted the accused solely based on a judge unchallenged financial capacity of the complainant. The High Court held the presumption under Section 139 of the Negotiable Instruments Act indisputable and the trial court erred in acquittal on this untested ground.

What did the court decide?

Impugned acquittal set aside; accused convicted; fine of Rs.14 Lakhs imposed (Rs.13,75,000 compensation to complainant, surplus to State).

Mr. Vinay Shiva Gowda Vs Mr. Avinash Kumar P Ghatge — Cheque Dishonour | Karnataka HC (2023)

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1 - NC: 2023:KHC:45609 CRL.A No. 1449 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 14^TH DAY OF DECEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE RAJENDRA BADAMIKAR CRIMINAL APPEAL NO. 1449 OF 2018

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BETWEEN:

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Digitally signed by SOWMYA D Location: High Court of Karnataka

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MR. VINAY SHIVA GOWDA, S/O LATE PUTASWAMY, R/AT NO.64, 4^TH ‘A’ BLOCK, 3^RD FLOOR, 2^ND MAIN ROAD, 2^ND CROSS, DOMLUR, BENGALURU-560 071. …APPELLANT (BY SRI. SHARATH .S GOWDA, ADVOCATE) AND: MR. AVINASH KUMAR .P GHATGE, S/O SRI. PRABHAKAR RAO G.S., AGED MAJOR, FLAT NO.F-2 PLATINUM ENCLAVE APARTMENTS, PHASE-4, KEREGODU ADA HALLI, CHIKKABANAVAR ROAD, BENGALURU-560 090, ALSO WORKING AS CLERK, TALUK OFFICE, YELAHANKA, MINI VIDHAN SOUDHA, YELAHANKA NEW TOWN, BENGALORE-560 064. …RESPONDENT (BY SMT. ARCHANA .K.N, AMICUS CURIAE, V/O DTD:29.9.23) THIS CRL.A. IS FILED U/S.378(4) CR.P.C PRAYING TO SET ASIDE THE JUDGMENT OF ACQUITTAL DATED 06.06.2018 PASSED BY THE LVIII ADDL.C.M.M., BENGALURU IN C.C.NO.58431/2016 - ACQUITTING THE

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RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT.

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THIS APPEAL COMING ON FOR FURTHER HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal is filed by the complainant under Section 378 (4) of Code of Criminal Procedure (hereinafter referred to as 'Cr.P.C' for short) challenging the judgment of acquittal passed by LXVIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bangalore in C.C.No.58431/2016 dated 06.06.2008 whereby the learned Magistrate acquitted the accused / respondent herein for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'the N.I.Act' for short).

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For the sake of convenience, the parties herein are referred with original ranks occupied by them before the trial Court.

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The brief factual matrix leading to the case are as under:

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That the complainant and accused were well acquainted with each other and as per the request of the accused, the complainant had advanced a sum of Rs.9,50,000/- on 05.02.2016 as a hand loan. The accused has agreed to repay the loan within 4 months, but he failed to do so and when the complainant has insisted for the payment of the said amount, he has issued a cheque drawn on Corporation Bank, Nrupathunga Road Branch dated 06.06.2016 for a sum of Rs.9,50,000/-. When the said cheque was presented for encashment, it was returned for ‘insufficient of funds’.

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Thereafter, the complainant has got issued a

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legal notice and inspite of service of legal notice, the accused has neither replied to the legal notice nor paid the cheque amount and hence, the complainant claims

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to have filed the complaint before the learned Magistrate under Section 200 of Code of Criminal Procedure (hereinafter referred to as 'Cr.P.C' for short) against the accused for the offences punishable under Section 138 of N.I.Act.

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The learned Magistrate after recording the sworn statement of the complainant has taken cognizance of the offence and issued process against the accused. The accused has appeared through his counsel and was enlarged on bail. The plea under Section 138 of N.I.Act is framed and accused denied the same.

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To prove the guilt of the accused, the complainant got examined himself as PW1 and also placed reliance on 7 documents marked at Ex.P1 to Ex.P7. After conclusion of the evidence of complainant, the statement of accused under Section 313 of Cr.P.C is recorded to enable the accused to

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explain the incriminating evidence appearing against him in the case of the complainant, but his case of total denial. The accused got himself examined as DW1. However, he has not produced any documents in support of his contention.

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Having heard the arguments and after appreciating the oral and documentary evidence, the learned Magistrate has acquitted the accused for the offence punishable under Section 138 of N.I.Act on the sole ground that the complainant has not explained the source of income to advance such a huge amount. Being aggrieved by this judgment of acquittal, the complainant is before this court.

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Heard the arguments advanced by the

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learned counsel for the appellant and learned amicus curiae for respondent. Perused the records.

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The learned counsel for the appellant would

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contend that on 05.02.2016, an amount of

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Rs.9,50,000/- was advanced to accused and the same

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was repaid through cheque under Ex.P1, but the cheque was bounced. It is also asserted that the signature on the cheque and that the cheque belongs to the accused are undisputed facts and thereby the presumption under Section 139 of N.I.Act is in favour of the complainant, which is not at all rebutted by the accused. He would also contend that the accused has taken inconsistent defences regarding he only acting as a surety by issuing a security cheque to the loan advanced to one Aslam and subsequently, during the course of arguments, he has set up a defence of disputing financial capacity of the complainant. It is argued that the financial status of complainant was never challenged and the presumption under Section 139 of N.I.Act was never rebutted, which is mandatory

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and the learned Magistrate has erred in acquitting the accused only on the ground of financial status of the complainant, which was never challenged. Hence, he would seek for allowing the appeal by convicting the accused for the offences punishable under Section 138 of N.I.Act by setting aside the impugned judgment of acquittal.

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The learned amicus curiae would submit that the complainant is required to prove that the cheque was issued towards legally enforceable liability and the cross-examination of PW1 discloses that the financial status is challenged and no documents regarding financial capacity of the complainant to advance huge amount of loan of Rs.9,50,000/- were produced and hence, the presumption deemed to have been rebutted. Hence, she would contend that the learned Magistrate is justified in acquitting the accused and sought for dismissal of the appeal.

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Having heard the arguments and perusing

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the records, now the following point would arise for my consideration:

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(i) Whether the judgment of acquittal passed by the trial court is perverse, arbitrary and erroneous so as to call for any interference by this court?

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It is the specific contention of the complainant that the accused has availed a hand loan of Rs.9,50,000/from him for his financial commitments on 05.02.2016 assuring to repay the same within four months and after four months, when the repayment was demanded, he has issued a cheque under Ex.P1 towards discharge of legally enforceable liability. The accused has not disputed that cheque belongs to his account and it bears his signature. Hence, the initial presumption under Section 139 of N.I.Act to the effect that the cheque was issued towards legally enforceable liability is in

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favour of the complainant and accused is required to rebut the said presumption on the basis of

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preponderance of probability.

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The complainant examined himself as PW1

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and in his examination-in-chief, he has reiterated the complaint allegations. In the cross-examination of complainant, a suggestion was made that the complainant has paid the amount to one Aslam through accused and a cheque was obtained as security from the accused. Quite contrary to this defence, the accused who was examined as DW1 has

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set up a new defence in his examination-in-chief asserting that Aslam was in need of amount and therefore, he along with Aslam approached the wife of the complainant and the loan was advanced by wife of complainant and as a security, cheque was obtained

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by wife of the complainant from him. This defence is completely inconsistent and contrary to the defence

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set up in the cross-examination of the complainant. Both the defences cannot go simultaneously. The burden is on the accused to rebut the presumption on the basis of preponderance of probability, but considering the inconsistent defences raised by the accused regarding availment of loan from the complainant and his wife, it is evident that he has failed to rebut the said presumption.

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Apart from that, the accused has admitted in his cross-examination that he has received a legal notice issued as per Ex.P3 and he has not replied to the same. There is no explanation from the accused for not replying to the legal notice and he could have set up his defence in the reply notice itself, but after appearance, the accused is setting up two inconsistent defences.

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Now the arguments were advanced regarding financial capacity of the complainant to

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advance loan, but on perusal of the crossexamination, the financial status of the complainant was never challenged, though certain questions were posed regarding his avocation and income tax returns submitted by him. When the financial status is not specifically disputed and when there is a specific assertion that the loan was advanced through the accused to one Aslam, question of again accused disputing the financial status of the complainant does not arise at all. The learned Magistrate is carried away in this regard and hence, the presumption available in favour of the complainant is not at all rebutted.

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The learned counsel for the appellant has placed reliance on a decision reported in ‘P.RASIYA

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VS. ABDUL NAZER AND ANR.’, AIR ONLINE 2022 SC 1373 and ‘TEDHI SINGH VS. NARAYAN DASS

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MAHANT’, AIR online 2022 SC 942 , wherein it mandates that drawing of presumption under Section

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139 of N.I.Act is mandatory. Even in the decision in

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‘RAJESH JAIN VS. AJAY SINGH’, (2023) 10 SCC

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148, the Hon'ble Apex Court has laid down the guidelines in this regard and drawing the presumption is held mandatory. Under these circumstances, the learned Magistrate has erred in acquitting the accused only on presumptions and assumptions on the ground that the complainant has failed to prove his financial status, which was never disputed or challenged. As such, the judgment of acquittal passed by the learned Magistrate is perverse as well as arbitrary and it calls

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for interference and accused is required to be convicted for offence under Section 138 of N.I.Act.

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The offence punishable under Section 138 of N.I.Act is punishable with imprisonment, which may extend to 2 years or with fine, which may be double the amount of the cheque or both. Considering the private financial transaction between the parties, the

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sentence of imprisonment is unwarranted. However,

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the accused is required to be sentenced to pay fine.

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The cheque amount is Rs.9,50,000/- and it is advanced in 2016. Considering these facts and circumstances, in my considered opinion, it is just and proper to impose fine of Rs.14 Lakhs on accused, which would serve the purpose. As such, the point under consideration is answered in the affirmative and

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accordingly, I proceed to pass the following:

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O R D E R

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(i) The appeal is allowed .

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(ii) The impugned judgment of acquittal passed by LXVIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bangalore in C.C.No.58431/2016 dated 06.06.2008 is set aside.

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(iii) The accused is convicted for the offence punishable under Section 138 of N.I.Act. He sentenced to pay a fine of Rs.14 Lakhs, in default, to undergo Simple Imprisonment for a period of one year.

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(iv) Out of the fine amount of Rs.14 Lakhs, Rs.13,75,000/- shall be paid to the complainant by way of compensation under Section 357 of Cr.P.C and balance Rs.25,000/- shall be credited to the State towards cost of the litigation.

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(v) Send back the trial court records along with a copy of this judgment to trial court with a direction to the trial court to secure the presence of the accused and recover the fine amount including the fees of amicus curiae to the tune of Rs.5,000/- paid in this case.

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(vi) The court places its word of appreciation on record regarding the assistance rendered by the amicus curiae and her fees are fixed at Rs.5,000/-.

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(vii) In view of the disposal of the main matter, pending I.A., if any, stands disposed of.

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Sd/- JUDGE

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List No.: 1 Sl No.: 15

Mr. Vinay Shiva Gowda v. Mr. Avinash Kumar P Ghatge

Case brief

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Mr. Vinay Shiva Gowda v. Mr. Avinash Kumar P Ghatge

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