Allowed

Smt Rathnamma v. M/S Akarshak Realty Private Limited

Karnataka HC18 Dec 2023CRL.A/36/2018

Case brief

AI extract

What is this about?

Criminal Appeal against acquittal in a Section 138 NB case. The High Court held the trial court's acquittal perversely erroneous, disregarding evidence of the complainant's joint title and the accused's inconsistent defenses, and convicted the accused. A fine and default sentence were imposed.

What did the court decide?

Impugned judgment of acquittal set aside; accused convicted; fine of Rs.3,50,000/- imposed; Rs.3,40,000/- to complainant as compensation; default imprisonment of six months.

Smt Rathnamma Vs M/S Akarshak Realty Private Limited — Cheque Dishonour | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^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.36/2018

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BETWEEN:

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SMT. RATHNAMMA, D/O LATE MUNIYELLAPPA, W/O SHANKARAPPA, AGED ABOUT 53 YEARS, RESIDENT OF GATTAHALLI VILLAGE, SARJAPURA HOBLI, BENGALURU, ALSO RESIDING AT 6^TH CROSS, BEHIND LEELA PALACE HOTEL, KODIHALLI, BENGALURU-560 008.

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….APPELLANT

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(BY SRI. MAHANTESH .S HOSMATH, ADVOCATE)

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AND:

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M/S. AKARSHAK REALTY PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE COMPANY’S ACT, HAVING IT’S REGISTERED OFFICE AT NO.10, VITTAL MALYA ROAD, BENGALURU-560 001, REPRESENTED BY IT’S M.D. MR. B.M. KARUNESH.

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MR. B.M. KARUNESH, THE MANAGING DIRECTOR TO M/S. AKARSHAK REALTY PRIVATE LIMITED, OFFICE AT NO.10, VITTAL MALYA ROAD, BENGALURU-560 001.

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…. RESPONDENTS

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(BY SRI. VIPIN KUMAR JAIN, 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 DATED 25.07.2017 PASSED BY THE LVIII ADDL.C.M.M., MAYOHALL UNIT, BENGALURU IN C.C.NO.54500/2014-ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/UNDER SECTION 138 OF N.I. ACT.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 11.12.2023, 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 dated 25.07.2017 passed by the 68^th Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru, in CC No.54500/2014.

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For the sake of convenience, the parties herein

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are referred with the original ranks occupied by them before

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the trial Court.

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The brief factual matrix leading to the case are that, Accused No.2-B.M. Karunesh is the Managing Director of Accused No.1-M/s.Akarashak Realty Pvt. Ltd. (for short 'Company’) and the Accused No.2 purchased the schedule property bearing Sy. No.120/1 and other properties situated at Gattahalli Village, Sarjapur Hobli, Bengaluru, from the

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complainant-Smt. Rathnamma, daughter of late Sri. Muniyellappa and other family members, for a consideration of Rs.24.00 Lakhs. It is alleged that Accused No.2, as Managing Director, on behalf of Accused No.1/Company, issued a Cheque bearing No.603039 dated 28.06.2013 for a sum of Rs.3.00 Lakhs drawn on Indian Bank, Richmond Circle Branch, Bengaluru, in favour of the complainant towards part of consideration. When the said cheque was presented, it was dishonoured on the ground of ‘Insufficient Funds’. The complainant issued statutory notice to the accused demanding the amount and Accused No.2 has given evasive reply to the notice.

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4. Therefore, the complainant filed a complaint

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under Section 200 of Cr.P.C. against the accused alleging that they have committed offence under Section 138 of Negotiable Instruments Act, 1881 (for short, ‘N.I. Act’). After recording the sworn statement, the learned Magistrate has taken cognizance of the offence and issued summons to accused. The Accused No.2 appeared for himself and for Accused No.1 through his counsel and was enlarged on bail.

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The plea under Section 138 of the N.I. Act was framed against Accused No.2 and the same was read over and explained to Accused No.2 and he pleaded not guilty.

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The complainant-Smt. Rathnamma was got examined herself as PW.1 and placed reliance on Exs. P1 to P6. After conclusion of the evidence of the complainant, the statement of Accused No.2 under Section 313 of Cr.P.C. was recorded and the case of accused is of total denial. Accused No.2-B.M. Karunesh was got examined himself as DW.1 and placed reliance on nine documents marked at Exs.D1 to D9.

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After hearing the arguments and after appreciating the oral and documentary evidence, the learned Magistrate has acquitted accused for the offence under Section 138 of the N.I. Act, on the ground that the complainant is not the owner of the disputed property. Being aggrieved by this judgment of acquittal, the complainant is before this Court.

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Heard the arguments advanced by the learned

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counsel for the appellant/complainant and

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accused/respondents. Perused the records.

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Learned counsel for the appellant/complainant would contend that there is no dispute of the fact that the cheque belongs to the accused and it bears signature of Accused No.2. It is further asserted that Accused No.2 has initially taken defence that the amount due under cheque is paid by way of cash to the brother and mother of the complainant and interestingly, even after execution of the sale deed, he pleads ignorance that the complainant is the joint owner though the sale deed was also executed by her. He would further contend that from Clause (f) of the sale deed produced at Ex.P5, it is evident that the consideration amount of Rs.3.00 Lakhs was paid to the complainant by way of the present disputed cheque, which is now dishonoured. It is contended that before the Court Accused No.2 has taken a different stand that the complainant is not the owner of the schedule propertay and there was a decree in favour of one Smt. Saraswathamma and he got executed

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the sale deed from her. It is contended that no such

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defence is raised and the decree relied by the accused discloses that complainant was not a party to said decree and the compromise decree though was set aside, but by that time, the property was already alienated and the purchasers were not the parties and it is an ex-parte decree and hence, since the title was transferred before set setting aside the decree, the said decree does not bind the complainant-Smt.Rathnamma. It is also asserted that, before getting executed the sale deed by paying consideration to Smt.Saraswathamma, Accused No.2 has not even courtesy to issue notice to the complainant and the cheque was not returned on the ground of stop payment and it has returned for ‘insufficiency of funds’ and hence he would contend that Accused No.2 is taking the lame excuses. Hence, he would contend that, only on the ground of ex-parte decree being passed in favour of Smt. Saraswathamma declaring her as the exclusive owner, the suit came to be decreed. But, other aspects have been completely ignored and hence, he

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would seek for allowing the appeal by convicting the accused.

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Per contra, the learned counsel for respondent

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would contend that the complainant had no title and she has admitted the same in the cross and Smt. Saraswathamma filed suit and it was decreed and the accused has also filed a suit against the complainant in 2016, which is still pending and the declaration suit having been decreed, the question of complainant claiming title of owner of Sy. No.120/1 does not arise at all. Hence, he would seek for dismissal of the appeal.

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Having heard the arguments and perusing the

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

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“Whether the judgment of acquittal passed by the learned Magistrate is perverse, arbitrary and erroneous, so as to call for any interference by this Court?”

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At the outset, it is evident that the cheque in

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question belongs to accused and it bears the signature of

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Accused No.2 and hence initial presumption is in favour of the complainant. This is again corroborated by Ex.P5, which is the sale deed executed by the complainant along with other joint family members. On perusal of Ex.P5 it is evident that, it is pertaining to Sy. No.120/1 measuring 4 acres 8 guntas and Sy. No.146/1 measuring 4 guntas. The complainant and other family members executed this sale deed.

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The Clause (f) of sale deed recitals at Page No.6 clearly disclose that accused have paid consideration of Rs.3.00 Lakhs to the complainant-Smt. Rathnamma through Cheque bearing No.603040 and this is an admitted fact. Hence, it is prima facie evident that the said cheque was issued towards sale consideration referred under Ex.P5 (Sale Deed), which is also produced at Ex.D1. Hence, prima facie there is sufficient material evidence to establish that the cheque was issued towards legally enforceable liability.

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Admittedly the cheque was dishonoured for ‘insufficient funds’ and the cheque was not dishonoured on the ground of stop payment or other reasons. The legal

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notice came to be issued on behalf of the complainant, which is an undisputed fact. The copy of the legal notice is at Ex.P4. Ex.P6 is the reply notice of Accused No.2, which is also an undisputed fact. Interestingly, in the reply notice, Accused No2 has set-up a plea regarding ignorance of joint title of the complainant. This strange defence was raised though the sale deed was executed by the complainant jointly along with her mother and others and Accused No.2 is the beneficiary under the sale deed. Apart from that subsequently another defence was set up in the reply notice that the amount due towards the disputed cheque-Ex.P1 is paid to one Smt.Papamma, who is the mother of complainant and her brother Sri. Srinivas. When the cheque was already issued, question of payment of amount by way of cash and asking them to return the cheque does not arise at all. Even as to why the amount was paid to Smt. Papamma and Sri. Srinivas is not explained as they are not the Power of Attorney Holders of the complainant and the complainant has not authorized them to receive her amount. The cheque belongs to Accused No.2 and as such he should have paid the amount to the complainant or he

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could have seen that the cheque is honoured. But, instead of doing the same, now he has initially set-up the defence of payment to the brother and mother of the complainant which is a lame excuse and same cannot be accepted at any stretch of imagination.

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However during trial, the accused has raised a new defence that the complainant is not the owner of the schedule property and placed reliance on Ex.D5, which is the decree obtained by Smt. Saraswathamma pertaining to Sy. No.120/1, wherein it is declared that the compromise decree entered in OS No.74/2019 dated 22.08.1990 is null and void and not binding on the complainant. However, the records especially the recitals at Ex.P5 and Ex.D1 disclose that the schedule property was sold by Sri. Lakshmanappa in favour of Sri. Muniyellappa ie., the father of the complainant in the year 1994 on the basis of acquiring title under the compromise decree in O.S. No.74/1990 and OS No.380/2006 (Old No.309/2001), which was filed in the year 2001 and that was filed against only Sri. Lakshmanappa and others. But the purchaser from Sri.

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Lakshmanappa by name Sri. Muniyellappa was not made as a necessary party in the said suit, though the title was passed in favour of Sri. Muniyellappa in 1994 itself under registered sale deed on 16.09.1994. Interestingly since Sri. Lakshmanappa has already sold the schedule property, he did not contest the matter and the suit was decreed exparte. No doubt, the ex-parte decree is having force in law. But since neither the plaintiff nor her ancestors were parties to the said suit, the sale deed was executed in favour of the father prior to suit and father was not being party to the said proceedings, the said judgment and decree does not bind the complainant in any way.

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Apart from that, Accused No.2 now all along asserted that they have got executed the sale deed pertaining to the schedule property from Smt. Saraswathmma subsequently. Before getting executed the sale deed, the accused has no courtesy to issue notice to the complainant also. Hence, it is evident that the accused is now giving the lame excuses. Apart from that, now Accused No.2 asserts that he has filed OS No.380/2006.

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The sale deed said to have been executed by Smt. Saraswathamma under Ex.D9 is dated 28.06.2014 and it is not executed by Smt. Saraswathamma alone, but along with others. But, the decree declares that only Smt. Saraswathamma is an exclusive owner.

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Accused No.2 appeared in Criminal Case on 29.12.2005 and as observed above, the reply notice as per Ex.P5 was issued on 05.11.2013. Subsequently, the sale deed came to be executed. Accused No.2 before getting the sale deed executed, did not thought it fit to consult the complainant in this regard, as complainant was not the party to the suit filed by Smt. Saraswathamma.

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Apart from that, the cheque was not dishonoured on account of stop payment and it is dishonoured for insufficient funds and admittedly the cheque was issued towards legally enforceable debt. When the said cheque was presented, there was legally enforceable debt and subsequently Accused No.2 has taken inconsistent stand.

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Apart from that, the decree in the suit at Ex.D6 filed by Smt. Saraswathamma is pertaining to Sy. Nos.120/1, 146/3 and 169/3. The right of Smt. Saraswathamma was declared to the extent of 9 guntas in Sy. No.120/1. But, sale deed executed by complainant in favour of accused was also pertaining to Sy. No.146/1. Admittedly, Smt. Saraswathamma has not claimed any title in respect of Sy. No.146/1. Under such circumstances, the contention of Accused No.2 that, the complainant has no title , holds no water, as the complainant being the joint owner of Sy. No.146/1, has got vested right. Even on that count, the liability of Accused No.2 cannot be ignored and under the guise of Ex.D6, Accused No.2 cannot escape from his entire liability.

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Though Accused No.2 claims to have filed suit in OS No.881/2016 as per Ex.D7 and D8 seeking relief that he is not liable to pay the amount under the cheque, no relief of injunction was sought till today. The suit was filed in 2016. But the cheque was bounced in 2013 itself. Hence, now it cannot lie in the mouth of accused that, he is not

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liable to pay any amount towards sale consideration. The joint title of complainant in Sy No. 146/1 is unchallenged and as observed above, the complainant was not a party to suit filed by Smt. Saraswathamma under Ex.D5. Hence, the said decree is also not binding on her since prior to filing of the suit itself the property was sold to the father of the complainant and the complainant should have been made as a party by Smt. Saraswathamma. The learned Magistrate has ignored all these aspects and in a mechanical way only on the basis of decree in favour of Smt. Saraswathamma gone to the extent of holding that there is no legally enforceable debt and also ignored the above referred legal issues including the title of the complainant to Sy. No.146/1 and she not being a party to the suit filed by Smt. Saraswathamma. Hence, the entire approach of learned Magistrate is erroneous and arbitrary and as such the impugned judgment suffers from perversity. As such, the judgment of acquittal passed by the learned Magistrate calls for interference by this Court.

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The cheque amount is Rs.3.00 Lakhs and the Accused No.2 is taking untenable and inconsistent defences and even after having got executed the sale deed, when the cheque was presented and it was bounced for insufficient funds. Later on he has taken an inconsistent defences of payment by way of cash. Considering this conduct of the accused, he is liable to be convicted for the offence under Section 138 of N.I. Act.

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The offence under Section 138 of N.I. Act is

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punishable with imprisonment which may extend to two years or fine extending up to double the cheque amount or both. Considering the nature of transaction, this is not a fit case, wherein the sentence of imprisonment is warranted. But, considering the civil litigations between the parties, in my considered opinion, it is just and proper to impose fine of Rs.3,50,000/- to the accused/respondent herein with default sentence, which would serve the purpose. Hence, the point under consideration is answered in the affirmative and accordingly I proceed to pass the following:

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ORDER

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i) The appeal is allowed .

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ii) The impugned judgment of acquittal dated 25.07.2017 passed by LVIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru, in CC No.54500/2014, is set aside.

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iii) The accused are convicted for the offence under Section 138 of N.I.Act.

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iv) Accused are sentenced to pay fine of Rs.3,50,000/-, in default Accused No.2 shall undergo simple imprisonment for a period of six months.

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v) Out of fine amount, Rs.3,40,000/- shall be paid to the complainant by way of compensation and Rs.10,000/- shall be appropriated to the State towards the expenses incurred in prosecuting the matter.

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The Registry is directed to send back the records of trial Court along with a copy of this judgment with a direction to secure the presence of Accused No.2 and recover the fine amount.

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SD/JUDGE

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KGR*

Smt Rathnamma v. M/S Akarshak Realty Private Limited

Case brief

What is this about?

What did the court decide?

Smt Rathnamma v. M/S Akarshak Realty Private Limited

Case brief

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What did the court decide?

What the court decided

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