Allowed

Dharmanna S/O. Paris Deyagond v. Raghavendra S/O. Krishnaji Kulkarni

Karnataka HC30 May 2023CRL.A/2534/2013

Case brief

AI extract

What is this about?

The High Court allowed an appeal against an acquittal in a cheque bounce case. Held that statutory presumptions under Sections 118 and 139 of the NI Act applied. Conviction reversed; sentencing ordered with fine and imprisonment.

What did the court decide?

Judgment of acquittal set aside; respondent convicted and sentenced to fine of Rs.2,05,000 payable by him to the complainant and simple imprisonment for six months in default.

Dharmanna S/O. Paris Deyagond Vs Raghavendra S/O… — Cheque Dishonour | Karnataka HC (2023)

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CRL.A No. 2534 of 2013

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 30^TH DAY OF MAY, 2023

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BEFORE

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THE HON'BLE MR JUSTICE ANIL B KATTI

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CRIMINAL APPEAL NO. 2534 OF 2013

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BETWEEN:

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DHARMANNA S/O. PARIS DEYAGOND, AGED AOBUT: 43 YEARS, OCC: AGRICULTURE, R/O. HIREPADASALAGI, TQ: JAMKHANDI DIST: BAGALKOT.

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…APPELLANT

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(BY SHRI H.M. DHARIGOND, ADVOCATE)

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MAMATHA

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Digitally signed by J MAMATHA Date:

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AND:

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2023.05.28 RAGHAVENDRA S/O. KRISHNAJI KULKARNI 02:33:31 +0530 AGED ABOUT: 63 YEARS, OCC: AGRICULTURE AND BUSINESS, R/O. HIREPADASALAGI, TQ: JAMKHANDI, DIST: BAGALKOT.

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…RESPONDENT

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(BY SHRI CHETAN MUNNOLI, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED U/S 378(4) OF CR.P.C. SEEKING TO SET ASIDE THE JUDGMENT AND ORDER DATED 07.11.2012, PASSED BY THE PRL. CIVIL JUDGE & JMFC, JAMKHANDI, IN C.C.NO.435/2009 AND ETC,.

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THIS APPEAL COMING ON FOR FINAL HEARING AND THE SAME HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 16.03.2023, THIS DAY, THE COURT, DELIVERED THE FOLLOWING:

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CRL.A No. 2534 of 2013

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JUDGMENT

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Appellant/complainant feeling aggrieved by

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judgment of acquittal passed by the Prl. Civil Judge and JMFC, Jamkhandi, in C.C.No.435/2009, dated 07.11.2012 preferred this appeal.

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Parties to the appeal are referred with their

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ranks as assigned in the trial Court for the sake of convenience.

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The factual matrix leading to the case of complainant can be stated in nutshell to the effect that complainant and accused are residents of Hirepadasalagi village and they know each other very well. The accused was in need of money of Rs.2,00,000/- for his family, business and domestic necessities. Complainant in the month of April-2008 advanced loan of Rs.2,00,000/- and accused assured to repay the same as and when demanded by the complainant. Accused in discharge of debt has issued cheque bearing No.637201 dated 17.09.2008 for Rs.2,00,000/- drawn on Karnataka Vikas Grameena Bank branch at Hirepadasalagi. Complainant

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CRL.A No. 2534 of 2013

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presented the said cheque for encashment on 23.10.2008 which came to be dishonored for want of sufficient funds in the account of accused vide memo dated 23.10.2008. The complainant has issued demand notice dated 03.11.2008. The same is duly served to the accused on 04.11.2008. Accused has neither paid the amount covered under the cheque nor replied to the notice. Therefore, complaint came to be filed on 03.12.2008 for taking appropriate legal action against accused.

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In response to the summons, accused appeared before trial Court and contested the matter. Complainant in order to prove his case, relied on the evidence of PW-1 and documents-Ex.P.1 to Ex.P.15. Accused has denied all the incriminating material evidence appearing against him during the course of his 313 Cr.P.C statement. Accused has not led any defence evidence. The trial Court after appreciating the evidence on record by judgment dated 07.11.2012 acquitted accused for the offence punishable under Section 138 of the Negotiable Instruments Act (for short ‘the N.I.Act’).

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5. The appellant/accused feeling aggrieved by the

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judgment of acquittal passed by the trial Court has preferred this appeal contending that issuance of cheque with signature of accused on the account maintained by him is not disputed. Therefore, in the absence of any rebuttal evidence, trial Court should have drawn presumption in terms of Section 118 and 139 of N.I.Act. The trial Court has committed serious error in holding that there is no legally enforceable debt, as against statutory presumption available in favour of complainant in terms of Section 118 and 139 of N.I.Act. Therefore, prayed for allowing the appeal and to convict accused for offence punishable under Section 138 of N. I. Act by setting aside the judgment of trial Court.

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In response to notice of appeal,

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respondent/accused appeared through learned counsel.

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Heard the arguments of both sides.

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On careful perusal of oral evidence of PW-1 and

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the documents relied by complainant, it would go to show

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that accused for lawful discharge of debt has issued cheque bearing No.637201-Ex.P.1, dated: 17.09.2008 for Rs.2,00,000/- drawn on Karnataka Vikas Grameena Bank, branch at Hirepadasalagi. The complainant presented the said cheque-Ex.P.1 for encashment on 23.10.2008 and the same was dishonored for want of sufficient funds in the account of accused vide bank endorsement-Ex.P.2. The complainant issued demand notice-Ex.P.3 on 03.11.2018, postal receipt is produced as per Ex.P.4. The demand notice is duly served to the accused on 04.11.2008 vide acknowledgment card-Ex.P.5. If these documents are perused and appreciated with the oral evidence of complainant-PW.1, then it would go to show that complainant has discharged initial burden of proving issuance of cheque-Ex.P.1 for lawful discharge of debt. The said cheque on its presentation was dishonored for want of sufficient funds in the account of accused. Therefore, statutory presumption in terms of Section 118 and 139 of N.I.Act will have to be drawn in favour of complainant. The issuance of cheque-Ex.P.1 with the

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signature of accused on the account maintained by him is not in dispute by the accused. It is now up to the accused to place rebuttal evidence to displace the initial presumption available in favour of complainant that cheque in question-Ex.P.1 was not issued for lawful discharge of debt.

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In this context, it is useful to refer the judgment of Hon’ble Apex Court in BASALINGAPPA VS. MUDIBASAPPA reported in 2019 Cr. R. 639 (SC) wherein it has been observed and held that:

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“Presumption under Section 139 is a rebuttable presumption and onus is on accused to raise probable defence. Standard of proof for rebutting presumption is that of preponderance of probabilities. To rebut presumption, it is open for accused to rely on evidence led by him or accused can also rely on materials submitted by complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from materials brought on record by parties, but also by reference to circumstances upon which they rely. It is not necessary for accused to come in witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden”.

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CRL.A No. 2534 of 2013

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In view of the principles enunciated in this judgment, it is evident that accused to probabilize his defence can rely on his own evidence or also can rely on material submitted by complainant. It is not necessary for the accused to step into the witness box to probabilize his defence.

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Learned counsel for the respondent/accused was justified in submitting that failure to reply demand notice issued by the complainant and accused not leading independent evidence cannot be a ground to hold that there was legally enforceable debt. Learned counsel for respondent/accused submitted that inconsistent evidence regarding arranging money of Rs.2,00,000/- would create serious doubt about source of income of complainant for lending money of Rs.2,00,000/- to accused.

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The trial Court for the reasons recorded in paragraph Nos.19 to 21 has observed and held that complainant claimed that he has paid money on different dates in one month amounting to Rs.2,00,000/- and in the cross-examination states that he has withdrawn the

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money from his bank account and that at another breath deposed that he has taken loan from the bank. The complainant has not produced passbook or bank account statement to prove withdrawal of money or taking loan from the bank to lend money to accused. On such finding recorded by trial Court, it has been held that complainant has failed to prove that the cheque in question-Ex.P.1 was issued for lawful discharge of debt.

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On perusal of cross-examination of PW.1 it would go to show that it has been elicited that complainant has given money on three occasions of April2008. The complainant has withdrawn money from the bank account and paid to the accused. The complainant has stated that transaction is evidenced from the bank account and he is prepared to produce passbook. Looking to the avocation of complainant having 4-acres of agricultural land wherein sugarcane crop is being grown and the amount is credited to his account can be said that complainant has got sufficient sources of income to give hand loan to the accused. If the accused was very much

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sure that complainant has no sufficient money in bank account to give loan to the accused then he could have summoned the bank statement from the concerned bank to demonstrate that there was no sufficient amount in the account of complainant, so as to give loan to the accused. This exercise on the part of accused was necessary, since accused has not made any basic foundation to deny sources of income of complainant to lend money of Rs.2,00,000/- to accused by replying to the demand notice issued by complainant. Therefore, the mere non production of passbook by the complainant without there being any basic foundation in that regard in challenging the sources of income of complainant, it cannot be held that the complainant has no sources of income to lend money to accused in view of statutory presumption available in favour of complainant in terms of Section 118 and 139 of N.I.Act.

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In this context of the matter, it is useful to refer to the judgment of Hon’ble Apex Court in TEDHI SINGH VS. NAYARAN DASS MAHANT in Criminal Appeal

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CRL.A No. 2534 of 2013

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No.362/2022 dated 07.03.2022 wherein it has been observed and held that basic foundation has to be made on the first available opportunity in the reply given to the demand notice by questioning the financial capacity. Otherwise, the complainant has no any opportunity to place the evidence on record in proof of his financial capacity.

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Learned counsel for the appellant relied on the judgment of Hon’ble Apex Court in SUMETI VIJ VS M/S

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PARAMOUNT TECH FAB INDUSTRIES in Criminal Appeal No.292/2021 dated 09.03.2021 wherein it has been observed and held that when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant has recorded her statement under Section 313 of the Code, but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of the Act. The statement of the accused recorded under Section 313 of the Code is not a substantive evidence of defence, but

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only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused. Therefore, there is no evidence to rebut the presumption that the cheques were issued for consideration.

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Learned counsel for appellant placed reliance on the co-ordinate bench judgment of this Court IN CRIMINAL REVISION PETITION NO.375/2021 (M/S M.K. ENTERPRISES AND ANOTHER VS KUMARI VARSHA POLE D/O VISHWANATH RAO POLE) , wherein it has been observed and held that when once a cheque is issued in light of the presumption of consideration by virtue of Section 139, it could be construed that a cheque has been issued towards a debt. It has been further held that when once the signature on the cheque has been admitted, the presumption under Section 139 and 118 of the Act comes into play and such presumption has not been rebutted by any legally tenable defence.

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CRL.A No. 2534 of 2013

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In the present case also issuance of chequeEx.P.1 with the signature of accused on the account maintained by him is admitted. The material elicited during the cross-examination of PW.1 cannot be accepted as rebuttal evidence to displace the statutory presumption available in favour of complainant in terms of Section 118 and 139 of N.I.Act.

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The trial Court by ignoring this legal position merely on the basis of non production of passbook evidencing loan transaction for withdrawal of money has erroneously recorded finding that the complainant has failed to prove that the cheque-Ex.P.1 was issued for lawful discharge of debt. The complainant by virtue of evidence of PW.1 and the documents at Exs.P.1 to P.5 has proved that cheque-Ex.P.1 was issued for lawful discharge of debt. When the accused has failed to place rebuttal evidence during the cross-examination of PW.1 or on the documents relied by the complainant or by placing his own evidence to displace statutory presumption available in favour of the complainant, it will have to be held that the

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complainant has proved that accused has committed offence under Section 138 of the N.I.Act.

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The question now remains is imposition of sentence. Looking to the evidence on record and the purpose for which loan was taken and the cheque was issued for lawful discharge of debt so also attending circumstances, in my opinion if the accused is sentenced to pay a fine of Rs.2,05,000/- and in default of payment of fine to undergo simple imprisonment for three months is imposed would meet the ends of justice. Consequently, proceed to pass the following:

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ORDER

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Appeal filed by the appellant/complainant is allowed.

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The judgment of acquittal recorded by trial Court in C.C.No.435/2009 dated 07.11.2012 for the offence punishable under Section 138 of N.I.Act is hereby set aside.

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Consequently, the respondent/accused is convicted for the offence punishable under Section 138 of the N.I. Act and the accused is sentenced to pay a fine of

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CRL.A No. 2534 of 2013

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Rs.2,05,000/-, in default to pay the said fine amount, he has to undergo simple imprisonment for six months.

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Out of the said fine amount, an amount of Rs.2,00,000/- is ordered to be paid to the complainant as compensation. The remaining amount of Rs.5,000/- shall be confiscated to the State towards litigation expenses.

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The registry is directed to transmit the records with the copy of this judgment to trial Court.

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(Sd/-) JUDGE

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AM/-

Dharmanna S/O. Paris Deyagond v. Raghavendra S/O. Krishnaji Kulkarni

Case brief

What is this about?

What did the court decide?

Dharmanna S/O. Paris Deyagond v. Raghavendra S/O. Krishnaji Kulkarni

Case brief

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What did the court decide?

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