Dismissed

P. Poonacha Muthanna v. Bollera Kuttappa Appaiah

Karnataka HC13 Dec 2023CRL.A/1584/2019

Case brief

AI extract

What is this about?

In this appeal under Section 378(4) Cr.P.C., the High Court of Karnataka dismissed the complainant's challenge to the trial court's acquittal regarding a Section 138 N.I. Act offence. The Court found the prosecution case doubtful due to inconsistencies in the complainant's testimony regarding the loan source, lack of evidence for financial capacity, and a disputed mortgage deed.

What did the court decide?

The criminal appeal was dismissed; the acquittal of the accused stands.

P. Poonacha Muthanna Vs Bollera Kuttappa Appaiah — Cheque Dishonour | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF DECEMBER, 2023

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BEFORE

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THE HON’BLE MR. JUSTICE RAJENDRA BADAMIKAR

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CRIMINAL APPEAL No.1584/2019

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BETWEEN:

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P. POONACHA MUTHANNA, AGED ABOUT 47 YEARS, S/O LATE SRI. P.P. MUTHANNA, RESIDENCE OF KADANOOR VILLAGE, VIRAJPET TALUK, KODAGU DISTRICT, PIN-571 218,

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….APPELLANT

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(BY SRI. BRIJESH KALAPPA , ADVOCATE)

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AND:

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BOLLERA KUTTAPPA APPAIAH, S/O B.C. KUTTAPPA, AGED ABOUT 47 YEARS, RESIDING AT PALTHOPE ESTATE (BOLLERA GATE), K. BADAGA VILLAGE, KUTTA POST, VIRAJPET TALUK, KODAGU DISTRICT-571 250.

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…. RESPONDENT

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(BY SRI. CHANDRA SHEKAR .L, ADVOCATE)

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THIS APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 25.06.2019 PASSED BY THE PRINCIPAL CIVIL JUDGE AND J.M.F.C., VIRAJPET IN C.C.NO.454/2017ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I.ACT.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 28.11.2023, COMING ON FOR ‘PRONOUNCEMENT OF JUDGMENT’ THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal is filed by the appellant/complainant under Section 378(4) of Cr.P.C. challenging the judgment of acquittal passed in CC.No.454/2017 on the file of the Principal Civil Judge & JMFC, Virajpet, dated 25.06.2019.

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

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The brief factual matrix leading to the case are

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as under:

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The complainant and accused are known to each other for many years. It is alleged that on 02.08.2012, the accused had borrowed a sum of Rs.50,40,000/- as a hand loan from the complainant and towards discharge of the said debt, the accused issued a postdated cheque bearing No.000230, dated 14.02.2017. When the said cheque was presented, it was returned with an endorsement “payment

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stopped by drawer”. The complainant issued a legal notice dated 20.03.2017 and in spite of service, accused has not repaid cheque amount and hence, the complainant has lodged a complaint under Section 200 of Cr.P.C. against the accused, alleging that he has committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’).

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

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To prove the guilt of the accused, the power of attorney of complainant was examined as PW1 initially. But later on, the complainant himself was got examined as PW2. Ten documents were marked at Ex.P1 to Ex.P10. After conclusion of the evidence of the complainant, the

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statement of accused under Section 313 Cr.P.C. is recorded to enable the accused to explain the incriminating evidence appearing against him in the case of the complainant. The case of accused is of total denial. The accused himself got examined as DW1.

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After hearing 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 the N.I. Act by exercising his powers under Section 255(1) of Cr.P.C. Being aggrieved by this judgment of acquittal, the complainant is before this Court by way of this appeal.

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Heard the arguments advanced by the learned counsel for the appellant and learned counsel for the respondent. Perused the records.

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The learned counsel for appellant would contend

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that the cheque and signature have been admitted and the presumption under Section 139 of the N.I. Act is in favour

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of the complainant. He would also contend that the amount was transferred by the bank and the financial capacity of complainant was challenged. But the records disclose that the mortgage amount was paid. The learned counsel for appellant would further contend that the mortgage amount was directly paid to the accused and the father of the complainant was earlier an Advocate General of the State and Sisters are in USA and his financial capacity stands established. As such, he would contend that the learned Magistrate has failed to appreciate the oral and documentary evidence in proper perspective and has erroneously acquitted the accused. Hence, he would seek for allowing the appeal by convicting the accused.

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Per contra, the learned counsel for

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respondent/accused would contend that the capacity of the complainant to advance such a huge loan itself is challenged and he has not produced any documents to show his financial status. It is also contended that the evidence of PW1 and PW2 is inconsistent regarding payment of alleged

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debt by way of cash or cheque. He would also contend that the cross-examination reveals that the said amount was not shown in income tax returns as the complainant was not able to disclose his source. He would also contend that though now the defence of mortgage is placed, there is no pleading and the settlement deed relied itself is disputed as there are number of corrections. He would also contend that the bank statement produced is subsequent to the transaction and the bank statement pertaining to relevant period is not produced and the allegations of the complaint disclose that there is only an assertion regarding borrowing a hand loan on 02.08.2012 and there is no pleading regarding payment by way of cash or cheque. He would also assert that the evidence of PW1 and PW2 is inconsistent and contrary and regarding the mortgage, there is no pleadings. Hence, he would contend that the learned Magistrate has appreciated the oral and documentary evidence in proper perspective and has rightly acquitted the accused and no illegality is found in the said judgment of acquittal so as to

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call for any interference. Hence, he would seek for dismissal of the appeal.

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Having heard the arguments and after

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appreciating the oral and documentary evidence, now the following point would arise for my consideration:

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“Whether the judgment of acquittal in CC.No.454/2017 passed by the trial Court is perverse and arbitrary so as to call for any interference by this Court.”

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It is the specific contention of the complainant that he has advanced a hand loan of Rs.50,40,000/- to the accused on 02.08.2012 for opening restaurant in the name and style ”Cheers Coorg“ at Bengaluru. The allegations of the complaint disclose that the loan is said to have been advanced on 02.08.2012 and the last installment is required to be paid by the end of August-2015. It is hard to accept the contention of the complainant that he advanced such a huge loan of more than Rs.50,00,000/- without charging any interest. The complainant has not explained anything in this regard.

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Initially, the complainant got examined his power

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of attorney holder as PW1 and the cross-examination of PW1 clearly discloses that he did not know anything in this case as he claims that the complaint was lodged for Rs.45,00,000/- and he pleads ignorance of Ex.P6. Further, he claims that the amount was paid directly through bank transfer at one instance and at another instance, he claims that the amount was paid by mortgaging the property. It is hard to accept that the complainant is able to mortgage the property by paying interest but did not charge any interest from accused and this conduct of the complainant creates serious doubt regarding genuineness of the transaction. Considering the evidence of PW1 and his admissions, the complainant subsequently got examined himself as PW2. But in his examination-in-chief, he did not refer to the present transaction and only refers to Ex.P9 & Ex.P10 regarding Mortgage Deed and his bank statement.

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In the cross-examination, PW2 admits that under Ex.P9, he has received Rs.45,00,000/- in installments from

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his friend from February-2012 to August-2012. He asserts that Rs.45,00,000/- was received by way of cash and balance by way of cheque. He further admits that he did not pay any amount to the accused through bank transfer and that clarifies that the evidence of PW1 in this regard does not have any relevancy.

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In the further cross-examination, PW2 stated that he paid the amount by withdrawing some amount from his bank account. But he did not disclose how much amount was withdrawn and what was cash in hand. This part of the cross-examination of PW2 dated 10.06.2019 reads as under:

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“£Á£ÀÄ DgÉÆÃ¦UÉ ¸Àé®à ªÉÆvÀÛ÷é£ÀÄß £ÀUÀzÀÄ gÀÆ¥ÀzÀ°è ªÀÄvÀÄÛ £Á£ÀÄ ¨ÁåAQßAzÀ ºÀtªÀ£ÀÄß ©qÀÄUÀqÉUÉÆ½¹ ¸Àé®à ªÉÆvÀÛªÀ£ÀÄß ¤ÃrgÀÄvÉÛÃ£É. £Á£ÀÄ DgÉÆÃ¦UÉ AiÀiÁªÀÅzÉÃ jÃw ºÀt ¤Ãr®è JAzÀgÉ ¸ÀjAiÀÄ®è. D ¸ÀªÀÄAiÀÄzÀ°è £Á£ÀÄ DzÁAiÀÄ vÉjUÉAiÀÄ£ÀÄß PÀnÖ®è. AiÀiÁPÉAzÀgÉ £À£Àß ºÀtzÀ ªÀÄÆ®ªÀ£ÀÄß £À£ÀUÉ D ºÉÆwÛ£À°è vÉÆÃj¸À®Ä DUÀ°®è.”

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If this version of the complainant is admitted, it is evident that he is unable to show the source of the amount at that time and now he is asserting that it is a

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mortgage amount. No such pleadings are forthcoming in the complaint.

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The accused has disputed the financial status of the complainant itself. In that event, the complainant could have produced some documentary evidence to prove his financial status. But Ex.P10 relied by the complainant is from 01.04.2018 to 07.06.2019. It is subsequent to the alleged transaction and regarding relevant date of transaction, no documents are forthcoming. In the crossexamination of accused a suggestion was made to DW1 that complainant has availed a loan of Rs.45,00,000/- and Rs.5,40,000/- cash in hand was added to it and the said loan was advanced to accused. This fact was never pleaded in the complaint or in the legal notice.

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The learned counsel for appellant all along placed reliance on mortgage deed Ex.P9. On perusal of Ex.P9 it is evident that though the mortgage deed was executed on 02.08.2012, on the date on which the present transaction is said to have been taken place, the recitals of mortgage

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deed disclose that the amount was paid in installments on 06.02.2012, 07.02.2012, 08.02.2012 and so on. The last installment was paid on 16.07.2012 and no amount was paid as on 02.08.2012. Hence, the contention of the complainant is that this mortgage amount was received on 02.08.2012 and paid to the accused by using Rs.5,40,000/in cash cannot be accepted. It is hard to accept that complainant was able to mobilize such a huge amount and he kept the amount of Rs.45,00,000/- received under mortgage deed for a long period in his house. His defence is that the mortgage amount was directly paid to the accused, but the records disclose that the mortgage amount was received prior to this alleged transaction. Even the allegations of the complaint itself disclose that on the date of approach of the accused for loan, the amount was advanced and the complainant cannot imagine that accused is going to seek loan from him so as to the keep entire amount ready. This appears to be a cock-and-bull story only created for the purpose of regularizing the illegal

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transaction. Ex.P10 does not assist the complainant in any way.

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Though much arguments have been advanced regarding the status of the father of complainant and the status of sisters, it has nothing to do with the present transaction as no pleadings are forthcoming and status of the father of the complainant and sisters does not establish the financial status of the complainant. Interestingly, PW2, who is the complainant in his cross-examination itself admitted that he is unable to disclose the source of amount and therefore, he did not shown it in his income tax returns which itself disclose that the amount was not a legal one. Considering these aspects, the entire case of the complainant becomes a doubtful.

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Much arguments have been advanced on Ex.P6 alleged deed of settlement. Ex.P6 is disputed by the accused. On perusal of Ex.P6, there are number of corrections and on perusal of Ex.P4, it is evident that there is a condition for payment of interest also at the rate of

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10%. The date has been changed from February to May and there is a condition that a demand promissory note was required to be executed, but no such demand promissory note is produced by the complainant to prove that Ex.P6 is a genuine document. In clause 3 and clause 6, the cheque number and bank details were inserted subsequently and date was not found. These insertions were not signed and as such, this Ex.P6 cannot be taken note of. If Ex.P6 is really acted upon, then there should have been a on demand promissory note as per clause 2 of the said agreement, but that is not forthcoming and same is not produced.

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The evidence given by PW1 and PW2 runs contrary to each other and PW2, who is the complainant did not narrate the transaction details. PW1 claims that the claim is only for Rs.45,00,000/- and he asserts that the amount was transferred by complainant by way of bank transfer, but PW2 speak a different story. Further, as observed above, Ex.P6 came to be disputed and it is said to

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have been executed on 01.03.2015, but the present complaint was filed 2 years later on. In this period if there is any breach of conditions of Ex.P6 regarding non-payment of Rs.8,00,000/- as per clause 4 of the agreement, then he should have issued a notice to this effect and if he had received Rs.8,00,000/- in August-2015, then the liability does not fall to the extent of Rs.50,40,000/- as claimed by the complainant. No evidence is placed to show that Ex.P6 was acted upon and PW1 is unaware of Ex.P6 and PW2 did not whisper about Ex.P6 and his evidence is silent in this regard.

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The defence of the accused is that the complainant has obtained blank signed cheque and bond paper to settle the matrimonial dispute of the complainant. Considering the conduct of the complainant and his financial status in not taking steps regarding breach of conditions of Ex.P6, insertions in Ex.P6, it is evident that the defence of the accused is more probable rather than case of the

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complainant. Hence, the presumption available in favour of the complainant is rebutted by the accused.

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Apart from that, the alleged transaction is of

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2012 and cheque was issued in 2017. Further on perusal of Ex.P6, it is evident that stamp was dated 27.06.2015 and issued at 2.15 p.m. but the agreement is dated 01.02.2015/ 01.05.2015. This agreement cannot be prior to obtaining the stamp and hence, Ex.P6 does not assist the complainant in proving his case and the purchase of stamp of Ex.P6 itself completely falsifies the claim of the complainant as the agreement was said to have been executed well prior to purchase of the stamp, which is practically impossible. If Ex.P6 in view of the above observations goes out, then even if there is liability, it becomes as time barred debt and hence, it is not a legally enforceable debt. On this point also the claim of complainant is bound to fail. Looking to these facts and circumstances, it is evident that complainant has failed to substantiate that the cheque was issued towards legally enforceable debt.

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The learned counsel for appellant has placed reliance on a decision reported in 2008 SCC onLine Del 351

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[ RAVI CHOPRA vs. STATE AND ANOTHER ]. But the facts and circumstances of said case are entirely different and it was pertaining to material alteration under Section 87. However, this citation is placed reliance for proving Ex.P6. But as observed above, Ex.P6 is antedated prior to purchase

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of the stamp itself and considering these aspects, the principles enunciated in the above cited decision would not come to the aid of the appellant in any way.

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He has further placed reliance on a decision

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reported in (2005) 9 SCC 174 [ POLYMAT INDIA (P) LTD. AND ANOTHER vs. NATAIONAL INSURANCE CO. LTD ]. But

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it is pertaining to construction of the contract and variation/novation of the contract etc., As observed above, when Ex.P6 does not stand in view of the fact that stamp was purchased subsequent to execution of the document, the whole case fails and hence, the said principles cannot be made applicable to the facts and circumstances of the case.

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He has further placed reliance on a decision reported in 1989 (1) SCC 487 [ PROVASH CHANDRA DALUI AND ANOTHER vs. BISWANATH BANERJEE AND ANOTHER ]. But again it is regarding interpretation of the contract and on the same point, he has also placed reliance on (1979) 2 SCC 274 [ SANT RAM vs. RAJINDER LAL AND OTHERS ], which is pertaining to interpreting deeds and statutes. But when Ex.P6 falls on ground when it is in the antedated prior to purchase of the stamp paper, any of these citations will not assist the complainant in any way. Further, the admissions given by complainant itself disclose that he is unable to disclose the source of the amount and subsequently, he tried to make out a case of mortgage, but that is not substantiated. As such, the principles enunciated in the above cited decisions will not come to the aid of the appellant/complainant in anyway.

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The learned Magistrate has appreciated the oral and documentary evidence in detail and has properly analyzed the oral and documentary evidence. No illegality

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or perversity is found in the judgment of acquittal passed by the learned Magistrate so as to call for any interference. Considering these facts and circumstances, the appeal being devoid of any merits, does not survive for consideration. As such, the point under consideration is answered in the negative and accordingly, I proceed to pass the following:

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ORDER

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(i) The appeal stands dismissed .

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Sd/JUDGE

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P. Poonacha Muthanna v. Bollera Kuttappa Appaiah

Case brief

What is this about?

What did the court decide?

P. Poonacha Muthanna v. Bollera Kuttappa Appaiah

Case brief

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