Dismissed

Sri Somanath Mestha v. Sri G Sainath Shet

Karnataka HC27 Oct 2023CRL.A/667/2012

Case brief

AI extract

What is this about?

In an appeal against acquittal for cheque dishonour under Section 138 NI Act, the High Court upheld the trial court's decision. The court found the accused had rebutted the presumption under Sections 118 and 139 NI Act by demonstrating the cheque was filled up after being taken blank due to false allegations of kidnapping. The appeal was dismissed.

What did the court decide?

The criminal appeal filed by the appellant was dismissed and the impugned judgment of the trial court acquitting the accused was confirmed.

Sri Somanath Mestha Vs Sri G Sainath Shet — Cheque Dishonour | Karnataka HC (2023)

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CRL.A.No.667 of 2012

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 27^TH DAY OF OCTOBER, 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.667 OF 2012

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BETWEEN:

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SRI SOMANATH MESTHA S/O LAXMANA MESTHA R/O GUJJADY KUNDAPURA TALUK UDUPI DISTRICT

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…APPELLANT

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(BY SRI. MAHESH KIRAN SHETTY, ADVOCATE )

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AND:

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SRI G SAINATH SHET S/O KRISHNA SHET R/AT RAMANNA SHETTY COMPOUND MARUTHI VEETHIKA UDUPI, UDUPI DISTRICT

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…..RESPONDENT

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(BY SRI. GANESH SHET.N, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CODE OF CRIMINAL PROCEDURE PRAYING TO a) SET ASIDE THE JUDGMENT DATED 21.04.2012 PASSED IN THE C.C.NO.363/2002 ON THE FILE OF THE LEARNED ADDL. CIVIL JUDGE AND JMFC, KUNDAPURA; c) ALLOW THE COMPLAINT FILED BY THE APPELLANT IN C.C.NO.363/2002 ON THE FILE OF THE LEARNED ADDITIONAL CIVIL JUDGE AND JMFC, KUNDAPURA AND TO FURNISH THE RESPONDENT IN ACCORDANCE WITH LAW FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENT ACT; d) TO COMPENSATE THE APPELLANT SUITABLE IN THE INTEREST OF JUSTICE AND EQUITY.

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CRL.A.No.667 of 2012

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THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED ON 25.07.2023, 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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Being aggrieved by dismissal of complaint filed by him under Section 200 Cr.P.C alleging offence punishable under Section 138 of N.I. Act against the respondent accused, appellant/complainant is before this Court under Section 378 Cr.P.C.

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For the sake of convenience, the parties are referred to by their rank before the trial Court.

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It is the case of the complainant that he knows the accused since five years. Accused for his personal necessity borrowed loan of Rs.78,000/- to do jewellery business and promised to repay it on demand. Towards repayment of the said loan, accused issued cheque dated 05.09.2001, with a promise to arrange funds for payment of the same. However, when complainant presented for encashment, it was

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dishonoured on the ground ‘Funds insufficient’ and

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CRL.A.No.667 of 2012

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returned with the memo dated 24.09.2001. Complainant got issued a legal notice dated 28.09.2001 and it is duly served on the accused on 04.10.2001. However, accused has sent reply making false allegations. Therefore, the present complaint is filed.

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After due service of summons, accused appeared through counsel and contested the matter. He pleaded not guilty and claimed trial.

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In support of his case, complainant got himself examined as PW-1 and got marked Ex.P1 to 11.

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During the course of his statement under Section 313 Cr.P.C, accused has denied incriminating evidence brought on record by the complainant.

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In fact, he has chosen to examine the Managing Partners of Ekadanta Finance and Nisarga Finance, of which complainant is partner, as DWs-1 and 2. Accused is examined as DW-3. He has relied upon Ex.D1 to 13.

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CRL.A.No.667 of 2012

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Vide the impugned judgment and order the trial Court dismissed the complaint and acquitted the accused.

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Being aggrieved by the same, the complainant

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has come up with this appeal contending that the impugned judgment and order of the trial Court is against law, facts and probabilities of the case and as such it is liable to be dismissed. The presumption under Section 118 and 139 of N.I. Act is clearly in favour of the complainant and as such burden is on the accused to rebut the said presumption. The trial Court has failed to raise this presumption. The trial Court has erred in not appreciating the facts and circumstances of the case in right perspective. Though the accused has entered into the witness box and lead oral and documentary evidence, he has failed to rebut the presumption. In the absence of specific defence being taken by the accused, he has failed to rebut the presumption. Viewed from any angle the impugned judgment and order is not sustainable and

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prays to allow the appeal, convict the accused and sentenced him appropriately.

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In support of his arguments, the learned

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counsel for complainant has relied upon the following decisions.

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(i) M/s. Kalamani Tex and Anr Vs. P. Balasubramanian (M/s. Kalamani Tex)¹

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(ii) Sumeti Vij Vs. M/s Paramount Tech Fab Industries (Sumeti Vij)²

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(iii) Rohitbhai Jivanlal Patel Vs. State of Gujarat & Anr (Rohitbhai Jivanlal Patel)³

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(iv) T.P.Murugan (Dead) Thr. LRs. Vs. Bojan (T.P.Murugan)⁴

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On the other hand, learned counsel

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representing the accused has supported the impugned judgment and order and sought for dismissal of the appeal.

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1 (2021) 5 SCC 283

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2 AIR 2021 SC 1281

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3 (2019) 18 SCC 106

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4 AIR 2018 SC 3601

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CRL.A.No.667 of 2012

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In support of his arguments, the learned counsel for respondent has relied upon the following decision:

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(i) Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel and Anr (Dashrathbhai)⁵

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Heard arguments of both sides and perused the record.

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Accused has disputed that he borrowed hand loan of Rs.78,000/- from the complainant and towards repayment of it, he has issued the cheque in question. He has taken up a specific defence that complainant is a

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partner of Ekadantha Finance and Nisarga Finance. Accused has availed loan of Rs.10,000/- from Ekadantha Finance and Rs.20,000/- from Nisarga Finance. At the time of granting loan the subject cheques was taken blank from him except his signatures. His brother is Guarantor to both the loans. Though he was able to pay certain sums, thre was still balance to be paid. Since he

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5 AIR 2021 SC 1281

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CRL.A.No.667 of 2012

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was harassed endlessly for repayment of the said loan and due to financial difficulties, he is shifted to Udupi on 13.09.2001.

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Somnath Mestha and Purusha Mestha, under the guise of settlement took him to Kundapura and in the lawyer’s office, his signatures were taken to blank stamp papers. However, immediately on the next day, he sent a legal notice to both Finances. Therefore, instead of utilising the stamp papers and as the limitation for recovery of loans granted by the Finances was over, utilising the blank cheque, through the complainant, a false complaint is filed. Accused has also taken up a specific defence that complainant is not having financial capacity to lend and he never had the necessity of borrowing Rs.78,000/- from the complainant and has sought for dismissal of the complaint.

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At the outset, it is relevant to note that accused admitted that the subject cheque is drawn on his account maintained with his banker and it bears his signature. Hence, as held in M/s Kalamani Tex,

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Sumeti Vij, Rohitbhai Jivanlal Patel and TP

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Murugan , the presumption under Sections 118 and 139 of the N.I.Act that the cheque in question was issued towards repayment of any legally recoverable debt or liability is attracted and the burden is on the accused to rebut the presumption. While rebutting the presumption, it is for the accused to establish the circumstances under which the subject cheque reached the hands of the complainant and that it was not issued for discharge of any legally recoverable debt or liability. Only after the accused discharges the burden placed on him, the complainant would be called upon to prove his case. Of course it is sufficient for the accused to rebut the presumption by preponderance of probabilities, whereas complainant is required to prove his case beyond reasonable doubt.

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As already noted DWs-1 and 2, who are the witnesses examined for the accused are no other than the Managing Partners of Ekadantha Finance and Nisarga Finance of which complainant is one of the partner.

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Through the cross-examination of PW-1, DWs-1 and 2 the accused has proved that he had borrowed Rs.10,000/- and Rs.20,000/- respectively from these two Financial and as on 13.09.2001, he was still due to them. Of course the complainant has denied that in this connection on 13.09.2001, complainant and one Purusha Mehta tried to kidnap him. Though the public aborted their attempt, later on he was taken to Kundapura to an advocate's office and his signatures were taken to blank stamp papers. Since immediately on the next day, accused issued a legal notice, making these allegations and also filed a private complaint, the complainant did not choose to utilise the blank stamp papers containing his signatures and on the other hand used the blank cheques to file the complaints.

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Having regard to the fact that though the accused was due to repay the portion of the loan taken from both Finances, the complainant as well as other partners have not chosen to prosecute him for recovery of the amount due. In Ex.D11, the accused has clearly

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pleaded that he was still due to repay the loan to both Finances. Even though complainant is partner of these Finances, in his reply notice at Ex.D12, he has not chosen to either admit or deny the said contention of accused. During his cross-examination that PW-1 has admitted the loan taken by accused from these Finances, but expressed ignorance to the suggestion that he was still due in certain sums.

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However, during the cross-examination of the accused, the complainant has set up a defence that the amount due from the accused were subsequently paid as per Ex.D9, which is dated 29.09.2003 i.e, subsequent to the filing of the complaint. In fact, during his crossexamination, the accused has deposed that since his brother was a Guarantor to the loan taken from these two Finances, unable to bear the harassment, he has repaid the loan. Thus, as on 13.09.2001, the accused was still due to these two Finances and it supports his defence that to force him to repay amount due, an

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attempt was made to kidnap him and his signatures were taken to blank stamp papers. It probabalize defence of accused that because he choose to send legal notice on the very next day, partners of Finances were not able to utilise them and therefore making use of blank cheque available with them, they got filed the complaint through the complainant.

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The defence of the accused that Ex.P1 cheque was issued blank is supported by the fact that the signature of accused and rest of the contents are in different ink. In fact the evidence of accused prove the fact that he is semi-illiterate and the contents of Ex.P1 are not in his handwriting. It is pertinent to note that accused has sent a legal notice dated 27.09.2001 to both Ekadantha Finance and Nisarga Finance regarding his kidnap etc. The complainant has chosen to send legal notice at Ex.P3 specifying the date as 28.09.2001.

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However, as admitted by him it is posted on 03.10.2011 and the notices at Ex.D4 and 6 sent by accused are prayer in point of time to Ex.P3. Of course

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the complaint filed by the accused came to be dismissed on the ground that there is no sufficient material to frame charge. It probabalise the defence of accused. Moreover, in the complaint, the complainant has not stated the time when he advanced Rs.78,000/- to the accused. However, during his cross-examination, the complainant has stated that he lent the said amount to the accused about 6–7 months prior to the issue of Ex.P1 cheque. Ex.P1 is dated 05.09.2001. 6–7 months prior to it would be during February or March 2001.

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Having regard to the fact that accused was not regular in repaying the loan taken from both Finances of which Complainant is one of the partner and he had left the town and settled at Udupi and there is allegations that the partners of said Finances, including the complainant had to go in search of him, it creates doubt whether despite all these facts operating against the accused, the complainant would venture to advance him a substantial sum of Rs.78,000/-, that too without taking any supporting documents. Having regard to the

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fact that except the signature, the rest of writing in Ex.P1 is not in the handwriting of accused, it probabalise the defence of accused that the cheque was taken blank and later on it is filled up to suit the convenience of complainant. Thus through oral and documentary evidence placed on record and through the crossexamination of PW-1, DWs-1 and 2 the accused has rebutted the presumption under Sections 118 and 139 of N.I. Act and thereby shifting the burden on the complainant to prove his case beyond reasonable doubt.

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As noted earlier, the accused has taken up a specific defence that complainant is not having financial capacity to lend him Rs.78,000/-. In fact he has crossexamined the complainant on this aspect and elicited that complainant has taken loans for purchasing two boats and even after 10 years he is repaying the same. Though he has stated that he is having surplus income of Rs.1,00,000/- through all his ventures, admittedly, the complainant has not produced any proof that when he

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allegedly paid Rs.78,000/- to the accused, he had the said amount with him either in his account or otherwise.

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Despite his prolonged cross-examination regarding his capacity to lend Rs.78,000/- to the

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accused, complainant has not chosen to produce any evidence regarding his financial capacity. Taking into consideration the oral as well as the documentary evidence placed on record, the trial Court has come to a correct conclusion that the accused has rebutted the

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presumption and thereby shifting the burden on the complainant. However the complainant has failed to prove the allegations against accused beyond reasonable doubt. On re-appreciation of oral and documentary evidence placed on record, this Court finds no justifiable grounds to interfere with the conclusions arrived at by the trial Court. In the result, the appeal fails and accordingly the following:

CRL.A.No.667 of 2012

ORDER

(i) Appeal filed by the complainant is dismissed.

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(ii) The impugned judgment and order dated 21.04.2012 in C.C.No.363/2002 on the file of Addl.Civil Judge and JMFC, Kundapura, is confirmed.

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