Dismissed

Sri. Shankar B S, v. Sri. K N Parthasarathy

Karnataka HC1 Sept 2023CRL.A/668/2011

Case brief

AI extract

What is this about?

This is a criminal appeal under Section 378(4) CrPC by a complainant against a Sessions Court order quashing his conviction for cheque dishonour. The High Court held that while the accused rebutted the presumption under Section 139 of NI Act by claiming cheque theft, the complainant failed to prove the legal recovery of the loan. Consequently, the appeal was dismissed and the Sessions Court order

What did the court decide?

The criminal appeal is dismissed and the impugned judgment and order dated 08.06.2011 is confirmed.

Sri. Shankar B S, Vs Sri. K N Parthasarathy — Cheque Dishonour | Karnataka HC (2023)

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CRL.A NO. 668 OF 2011

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 1^ST DAY OF SEPTEMBER, 2023 BEFORE

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THE HON'BLE MS.JUSTICE J.M.KHAZI

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CRIMINAL APPEAL NO. 668 OF 2011

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BETWEEN:

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SRI. SHANKAR B.S., S/O LATE K. SUBBA RAO, R/O "MADHU NIVAS", KRS AGRAHARA, KUNIGAL TOWN, KUNIGAL, TUMKUR.

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…APPELLANT

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(BY SRI. R.B.SADASIVAPPA, ADVOCATE)

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AND:

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SRI. K.N. PARTHASARATHY, S/O LATE K.L. NARASIMHAIAH, PROP: OF PRABHA SERVICE STATION, BUS STAND, KUNIGAL, R/O "RAMAKRISHNA" SANTHE BEEDHI, KUNIGAL, TUMKUR.

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(BY SRI. A.N.RADHAKRISHNA, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET ASIDE THE JUDGMENT DATED 08.06.2011 PASSED BY THE FAST TRACK COURT-1 AT TUMKUR IN CRL. APPEAL NO.112/2009 AND BE PLEASED TO CONFIRM THE JUDGMENT OF THE TRIAL COURT DATED 07.09.2009 IN C.C.NO.618/2003 PASSED BY THE COURT OF THE PRL. CIVIL JUDGE (JR.DVN.) AND JMFC, KUNIGAL AND ETC.

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2 CRL.A NO. 668 OF 2011

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THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED ON 17.07.2023, 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 the impugned judgment and order of the Sessions Court, reversing the conviction and sentence of respondent accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘N.I.Act’), complainant is before this Court in an appeal filed under Section 378(4) of 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 and accused are businessmen helping each other at the time of their financial needs. Likewise, at the request of accused, complainant advanced hand loan of Rs.10 lakhs. Accused promised to repay the same as and when demanded. When complainant demanded for return of the said money, accused issued a cheque dated

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25.05.2003 for Rs.10 lakhs. When complainant presented it for encashment, the same was returned dishonoured on the ground “funds insufficient”. Complainant got issued a legal notice dated 09.06.2003. It is duly served on the accused on 11.06.2003. However, accused has neither sent any reply nor complied with the notice. Without any alternative, complainant has filed the complaint.

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

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In order to bring home guilt to the accused, the complainant has examined himself as a PW-1, one witness as PW-2. He has relied upon Exs.P1 to 6.

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During the course of his statement under Section 313 Cr.P.C, the accused has denied the incriminating evidence.

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Accused has not chosen to lead defence

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evidence, but got marked his account statement through PW-2 as Ex.D1.

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Vide the judgment and order dated 07.09.2009, the trial Court convicted the accused and sentenced him to pay a fine of Rs.15 lakhs and in default to undergo simple imprisonment for one year. Out of the fine amount recovered, a sum of Rs.14,95,000/- is ordered to be paid to the complainant by way of compensation.

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Aggrieved by the same, accused filed Crl.A.No.112/2009 before the Sessions Court. Vide the impugned judgment and order, the Sessions Court allowed the appeal filed by the accused and set aside the order of conviction.

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Being aggrieved by the same, the complainant is before this Court contending that the impugned judgment and order of the Sessions Court is erroneous and unsustainable both in law and on facts and as such liable to be set aside. The Sessions Court has failed to

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CRL.A NO. 668 OF 2011

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note that after proper appreciation of oral and

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documentary evidence placed on record, the trial Court has convicted the accused. The Sessions Court has failed to appreciate the fact that accused has not denied that the cheque in question belongs to him, but only denied the transaction. In the light of presumption under Section 139 of N.I. Act, the findings of the Sessions Court that there was no legally recoverable debt or liability is incorrect. The Sessions Court has also not appreciated the fact that mere denial of passing of consideration is not sufficient to discharge or rebut the presumption. Viewed from any angle the order of the Sessions Court is not sustainable and prays to allow the appeal, set aside the impugned judgment and order and restore the order of the trial Court.

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In support of his arguments, learned counsel representing the complainant has relied upon the following decisions.

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(i) Sumeti Vij Vs. M/s Paramoung Tech Fab Industries ( Sumeti Vij )¹

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1 2021 (1) Kar.L.R.378 (SC)

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(ii) Rangappa Vs. Sri Mohan ( Rangappa )²

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(iii) T.Vasanthkumar Vs. Vijayakumari

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( T.Vasanthkumar )³

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(iv) Rohitbhai Jivanlal Patel Vs. State of Gurjarat & Anr. ( Rohitbhai )⁴

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(v) APS Forex Services Pvt. Ltd Vs. Shakti International Fashion Linkers and Ors. ( APS Forex )⁵

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On the other hand, learned counsel

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representing the accused supported the impugned judgment and order and prays to dismiss the appeal.

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In support of his arguments, learned counsel

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for accused has relied upon the following decisions:

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(i) John K. Abraham Vs. Simon C.Abraham & Anr. ( John )⁶

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(ii) Basalingappa Vs. Mudibasappa

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( Basalingappa )⁷

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(iii) Vijay Vs. Laxman and Anr. ( Vijay )⁸

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(iv) Veerayya Vs. G.K.Madivalar ( Veerayya )⁹

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2 (2010) 11 SCC 441

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3 (2015) 8 SCC 378

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4 AIR 2019 SC 1876

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5 AIR 2020 SC 945

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6 (2014) 1 SCC (Cri) 791: (2014) 2 SCC 236

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7 (2019) 2 SCC (Cri) 571: (2019) 5 SCC 418

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8 2013 (3)Crimes 246(SC)

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CRL.A NO. 668 OF 2011

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(v) Hanumanthappa Hanchinmane Vs. Agasanakatte A Basavarajappa ( Hanumanthappa )¹⁰

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Heard arguments of both sides and perused the record.

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Thus, it is the definite case of the complainant that accused borrowed a sum of Rs.10 lakhs for business purpose and when the cheque issued by him towards repayment of the same was presented to the Bank, it was dishonoured on the ground of "Funds insufficient". Though the accused admitted that the cheque in question belongs to him, drawn on his account maintained with his banker, he has disputed that it bears his signature. He has also denied of having borrowed a sum of Rs.10 lakhs and issued the cheque towards the repayment of the same.

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He has taken a specific defence that he was running a petrol bunk and complainant who was running the business of renting out cars, used to meet the drivers in the office of the petrol bunk belonging to the accused

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9 2012 (3) KCCR 2057

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10 Crl.A.No.1254/2010

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and has stolen the cheque in question and presented it by forging his signature. In fact, in his reply to the legal notice, the accused has taken up this defence. He has disputed that he had the legal necessity of borrowing Rs.10 lakhs and complainant had the financial capacity to lend such a huge sum. In the light of the specific contentions raised by the complainant as well as the accused, it is necessary to examine whether the Sessions Court is justified in interfering with the judgment and order of the trial Court.

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When a cheque is drawn on the account maintained with the Bank and bearing the signature of the drawer, as held in Rangappa , T.Vasanth Kumar, Rohitbhai, APS Forex , presumption under Section 139 of N.I.Act that the cheque was issued towards repayment of any legally recoverable debt or liability would arise. Of course, it is a rebuttable presumption and the burden is on the accused to rebut the same. As held in Basalingappa and Hanumanthappa , the accused may discharge this burden either by adducing evidence or he

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may rely upon the evidence placed on record by the complainant or through the cross-examination of the complainant and his witnesses. He is required to discharge this burden on preponderance of probabilities. When accused succeeds in rebutting the presumption, burden would shift on the complainant to prove his case beyond reasonable doubt. As held in Sumeti Vij, the proceedings under Section 138 of N.I.Act are quasijudicial in nature and therefore the principles which apply to acquittal in other criminal cases are not applicable in the case instituted under N.I.Act.

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Taking into consideration the principles enunciated in the above decisions, it is necessary to examine whether the accused has successfully rebutted the presumption and in that event whether the complainant has discharged the burden shifted on him.

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Though accused concede the fact that the cheque in question is drawn on his account maintained with the banker, he has disputed that it bears his signature. Unless complainant proves that the cheque in

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question bears the signature of the accused, the presumption under Section 139 of N.I Act would not operate in favour of the complainant, so as to call upon the accused to rebut the same. It is relevant to note that the cheque in question is not dishonoured on the ground that signature on the same does not tally with the specimen signature of the accused. In fact PW-2, who is the Manager of drawer Bank, has specifically deposed that the cheque is dishonoured for want of funds and not for any other reason. In fact, during his crossexamination, he has admitted that if there is any difference in the signature on the cheque, and it does not tally with his specimen signature, the cheque could not be passed.

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In the light of evidence of PW-2 and having regard to the fact that the cheque was not dishonoured on the ground that signature in the cheque is not tallying with the specimen signature of the accused, this Court is of the considered opinion that the complainant has proved that it bears the signature of accused.

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Consequently, the presumption under Section 139 of N.I. Act is operating in favour of the complainant and against the accused. Therefore, the burden is on the accused to

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rebut the said presumption.

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Now the next question would be whether the accused has succeeded in rebutting the presumption, in which event the burden would shift on the complainant to prove that the accused had the necessity of borrowing Rs.10 lakhs and he had the capacity to lend Rs.10 lakhs. Through the cross-examination of complainant, the accused has proved that earlier accused was running a petrol bunk and complaint was running car rental business and had five cars. Though the complainant has denied that complainant and the drivers of the said cars used to sit in the petrol bunk of accused and chitchat, having regard to the fact that as a businessman running car rental business, in all probabilities the complainant as well as his drivers were visiting the petrol bunk, if not for anything else, at least for getting the petrol for their cars.

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Consequently the contention of the accused that there was possibility of complainant laying his hands on the signed cheque belonging to the accused is proved on preponderance of probabilities and thereby the accused has rebutted the presumption under Section 139 of N.I.Act. Therefore the burden is shifted on the complainant to prove his case, including his financial capacity to lend Rs.10 lakhs to the accused.

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However, the complainant has failed to prove that accused had necessity of borrowing Rs.10 lakhs and complainant had capacity to lend such huge amount to him. In fact, at the earliest available opportunity accused in his reply notice has questioned the capacity of complainant to advance Rs.10 lakhs to him. On this aspect he has cross-examined the complainant in detail. Though the complainant has claimed that he had cash with him, he has failed to prove his means. Though the complainant has deposed that he is ready to produce income tax returns, the same are not produced.

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In the light of the fact that the accused having rebutted the presumption under Section 139 of N.I.Act and the complainant having failed to prove his means to lend huge sum of Rs.10 lakhs, the Sessions Court has come to a correct conclusion that the allegations against accused are not proved. Without appreciating the oral and documentary evidence placed on record in right perspective, the trial Court has come to a wrong conclusion. It has wrongly observed that accused has not sent any reply to the legal notice. The findings of the trial Court are perverse and therefore, interference by the Sessions Court was justified. As in the present case, in John, Vijay and Veerayya , on facts, it was held that the complainant had failed to rebut the presumption.

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Taking into consideration the oral and documentary evidence placed on record, the Sessions Court has rightly held that the complainant has failed to discharge the burden and therefore the judgment and order of conviction by the trial Court was interfered with. In the light of the same, this Court finds no justifiable

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grounds to interfere with the impugned judgment and

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order. In the result, the appeal fails and accordingly, the following:

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ORDER

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(i) The appeal filed by the complainant is dismissed.

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