Dismissed

Mr Srinivas v. Vs Mr H L Lakshmikantha

Karnataka HC4 Dec 2023CRL.A/70/2018

Case brief

AI extract

What is this about?

On a criminal reference under Section 378 Cr.P.C. regarding acquittal in a cheque bounce case, the Court held that the presumption under Section 139 of the N.I. Act was rebutted by an agreement of sale showing payment was made to another party, not the accused. The appeal was dismissed.

What did the court decide?

The criminal appeal was dismissed; the acquittal of the respondent/accused was upheld.

Mr Srinivas v Vs Mr H L Lakshmikantha — Cheque Dishonour | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^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.70/2018

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BETWEEN:

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MR. SRINIVAS .V, S/O VENKATASWAMAPPA, AGED ABOUT 37 YEARS, R/AT.NO.32/B, 2^ND MAIN, NGOS COLONY, VRUSHUBAVATHINGAR, KAMAKSHIPALYA, BENGALURU-560 079.

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….APPELLANT

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

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AND:

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MR. H.L. LAKSHMIKANTHA, S/O H.S. LAKSHMAIAH, AGED ABOUT 48 YEARS, R/AT.NO.32, 2^ND CROSS, RAJAJINAGAR HOUSING SOCIETY LAYOUT, ANNAPOORNESHWARINAGARA, NAGARABAVI, BENGALURU-560 091.

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ALSO AT:

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NO.31/2, 2^ND MAIN, NGOS COLONY, NEAR JAGATHGURU SCHOOL, VRUSHUBAVATHINAGAR, KAMAKSHIPALYA, BENGLURU-560 079.

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…. RESPONDENT

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(BY SRI. N.R. NAIK, ADVOCATE)

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THIS APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT DATED: 10.11.2017 PASSED BY THE XXII A.C.M.M., BENGALURU IN C.C.NO.2334/2017-ACQUITTING 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 23.11.2023, COMING ON FOR ‘PRONOUNCEMENT OF JUDGMENT’ THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This revision is filed by the appellant/complainant under Section 378(4) of Code of Criminal Procedure, 1973 (hereinafter referred to as 'Cr.P.C' for short) challenging the judgment of acquittal passed by the XXII Additional Chief Metropolitan Magistrate, Bangalore, in C.C.No.2334/2017, dated 10.11.2017.

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

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The brief fractual matrix leading to the case are that the complainant and accused are friends and in the third week of July-2014, the accused approached and

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narrated the complainant that he and his friend S.B.Honnappa formed the residential layout in Anekal and insisted the complainant for purchasing the site for a sum of Rs.13,20,000/-. It is alleged that complainant with an intention of purchasing the site, paid Rs.11,50,000/- in four installments and said S.B.Honnappa on 07/08/2014 had executed an agreement of sale in his favour and thereafter, agreement for an extension of time came to be executed. However, neither the S.B.Honnappa nor the accused have executed any agreement and hence, complainant has lodged a complaint before the jurisdictional police, wherein accused has undertaken to execute the Sale Deed or return the amount along with S.B.Honnappa, but did not do so and later on he has issued three cheques for Rs.4,00,000/- each towards discharge of the said amount along with interest. The said cheques were presented and were returned as ‘payment stopped by the drawer’ and a legal notice came to be issued but it was returned as door locked. Hence, complainant has lodged a complaint under Section 200 of Cr.P.C. alleging that accused has committed an offence

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under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’).

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The learned Magistrate has taken cognizance of

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the offence and issued a process against the accused. Accused has appeared through his counsel and was enlarged on bail. The plea under Section 138 of the N.I. Act is framed against the accused and same is read over and explained to the accused. He pleaded not guilty.

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The complainant was got examined himself as PW1 and placed reliance on 17 documents marked at Ex.P1 to Ex.P17. Then the 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 and he was also got examined himself as DW1 and placed reliance on Ex.D1.

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The learned Magistrate after appreciating the oral and documentary evidence acquitted the

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accused/respondent herein for the offence punishable under Section 138 of the N.I. Act. 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 respondent. Perused the records.

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The contention of the learned counsel for

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appellant is that the cheques belong to the accused and the signature of the accused are undisputed and defence of accused regarding obtaining the cheques by force is not established. Hence, he would contend that initial presumption under Section 139 of the N.I. Act is in favour of the complainant and the same has not been rebutted and hence, he would contend that the learned Magistrate has failed to appreciate this oral and documentary evidence in proper perspective and sought for allowing the appeal by convicting the accused. Hence, this appeal.

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Per contra, the learned counsel for respondent would support the judgment of acquittal passed by the learned Magistrate. He would contend that the evidence clearly discloses that the allegations were regarding financial transaction between complainant and accused but records disclose that no such transaction has taken place and cheques were obtained by force and a complaint was also lodged in this regard and the undertaking given by the complainant clearly establishes this aspect. He would contend that the presumption can be drawn only in the case of legally enforceable debt, but in the instant case, no such evidence is forthcoming and hence, he would seek for dismissal of the appeal.

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

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“Whether the judgment of acquittal 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

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that he has entered into an agreement of sale as per Ex.P1 at the instance of the accused and he paid amount of Rs.11,50,000/- to the accused under Ex.P1. But on perusal of Ex.P1, it is evident that it is an agreement of sale entered between Rajarajeshwari Land Developers and Builders through its partner Honnappa and complainant. Accused is not a signatory to this agreement, but he is only shown to be a witness. Merely witnessing this document does not amount that accused is liable to pay the amount which is paid to Rajarajeshwari Land Developers and Builders.

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Ex.P2 is the agreement pertaining to extension of

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time, but it is again executed by Honnappa and accused is only a witness. Merely because accused has endorsed as a witness, no legal liability can be fastened on the accused. In agreement Ex.P1 or Ex.P2, there is no condition that the accused has undertaken to reimburse the sale price in case sale deed is not executed.

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Ex.P4 to Ex.P6 are the disputed cheques. There

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is no serious dispute of the fact that the cheques belong to the accused and they bear their signature. As such, the learned counsel for appellant would contend that initial presumption is in favour of the complainant under Section 139 of the N.I. Act. No doubt, under Section 139, initial presumption is in favour of the complainant regarding the issuance of cheque in favour of complainant towards a legally dischargeable debt. On this point, learned counsel for appellant has placed reliance on decision of the Apex

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Court in 2019 (3) KCCR 2126 (SC) [ ANSS RAJASHEKAR vs AUGUSTUS JEBA ANANTH ]. In the said decision, the Hon’ble Apex Court has dealt regarding the provisions of Sections 138 and 139 and presumption, but it is clearly observed that the said presumption is a rebuttable presumption and it is not a conclusive presumption. He has further placed reliance on a decision reported in AIR 2019 SC 1983 [ BASALINGAPPA v. MUDIBASAPPA ]. There also the Hon’ble Apex Court has dealt regarding rule of presumption and in view of the admission of signature on the cheque presumption shall

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be raised that the cheque was issued in discharge of debt or liability. Absolutely, there is no dispute regarding the said proposition of law laid down by the Apex Court. But it is not a conclusive presumption and the presumption, available is a statutory presumption which is rebuttable one.

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The accused is at liberty to rebut the presumption by leading any evidence, or cross examining the complainant or by relying on the evidence or documents relied by the complainant himself. In this regard, the decision of the Apex Court reported in 2023 Livelaw (SC) 46 [ RAJARAM S/O SRIRAMULU NAIDU VS. MARUTHUCHALAM ] is relevant. The Hon’ble Apex Court in the said decision had an occasion to consider the standard of proof for rebutting the presumption and it is observed that the presumption is required to be rebutted on the basis of preponderance of probabilities. In the said decision, the Hon’ble Apex Court has observed as under:

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“Negotiable Instruments Act, 1881; Section 139 - The standard of proof for rebutting the presumption is that of preponderance of probabilities - once the execution of cheque is admitted, Section 139 of the N.I. Act mandates

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a presumption that the cheque was for the discharge of any debt or other liability - The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities - To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence - Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. Referred to Baslingappa v.Mudibasappa (2019) 5 SCC 418 (Para 12-20)”

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Further, the Apex Court has clearly held that adjudication in civil matters is based on preponderance of probabilities, where the adjudication in criminal cases is based on the principle that the accused is presumed to be innocent and guilt of the accused should be proved to the hilt and the proof should be beyond all reasonable doubt.

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The above said decision clarifies that the rebuttal

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can be done by the accused even on the basis of material submitted by the complainant himself. In the instant case, the complainant relied on Ex.P1, but on perusal of Ex.P1, it is evident that agreement of sale was executed by

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Rajeshwari Land Developers and Builders by its partner S.B.Honnappa in favour of complainant. Under the said agreement, amount is said to have been received by Honnappa. The accused was only a witness and no joint liability was fastened on the accused. Same is position with Ex.P2. But quite contrary to the same, the complainant in his evidence all along asserted that he paid the amount to accused. Ex.P1 clearly establishes that amount was paid to one Honnappa. No steps were taken against the said Honnappa. When the oral evidence is in contradiction with the recitals of the documentary evidence, as in the present case as per Ex.P1, then the Rule under Section 91 of Evidence Act mandates that the documentary evidence shall prevail. Ex.P1 is undisputed document and under Ex.P1, the amount was paid to Honnappa. Further, there is no evidence to prove that accused is a partner of Rajarajeshwari Land Developers and Builders. Under such circumstances, under what capacity the amount is sought from accused is not at all forthcoming.

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It is much argued by the learned counsel for appellant that since cheques have been admitted, the presumption needs to be drawn against the accused under Section 139. Though the presumption is initially available, but under Ex.P1, the recitals clearly disclose that payment was made to Honnappa and hence, the accused has established through the document of complainant itself that the amount was paid to Honnappa and not to him and as such, there is no legally enforceable debt as alleged by the complainant.

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Further, records clearly disclose that both the parties have approached the Police and certain endorsements were taken by the Police. The records also disclose that accused has also lodged a complaint against complainant regarding forcibly taking cheques from him and complainant giving an undertaking of returning the cheques provided his amount is being paid. Though, no much importance can be given to these documents, as they are said to have been executed by Police, but the basic rule is

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that the complainant must prove that there existed legally enforceable debt, but Ex.P1 itself clearly establishes that there is no legally enforceable debt. No amount was paid by complainant to the accused. Hence, the principles enunciated in the decisions referred above relied by the learned counsel appellant will not come to his aid though the presumption is in his favour. But in view of the decision reported in Rajaram’s case referred above, presumption stands rebutted in view of the written agreement of sale Ex.P1.

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Further, the Hon’ble Apex Court in Rajaram’s case itself has observed that unless the High Court found that the appreciation of the evidence is perverse, it could not have interfered with the finding of acquittal recorded by the trial Court. In the instant case also the evidence on record does not substantiate the claim of the complainant so as to establish that the appreciation of the evidence is perverse.

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Further, as per the decision relied by the appellant himself in Basalingappa’s case when the complainant has not satisfactorily explained contradiction of the complaint and in his evidence, question of drawing presumption in his favour does not arise at all. The learned counsel for appellant has also placed reliance on decision reported in 2023(3) KLR 560 (SC) [ RAJESH JAIN VS. AJAY SINGH]. But it is again drawing presumption and rebuttal of presumption and once accused discharge his onus of rebutting the presumption, then question of conviction does not arise at all. It is observed in the said decision that if the Court finds that the essential burden placed on accused has been discharged, the complainant would be expected to prove the said fact independently without taking aid of the presumption but no such evidence is forthcoming in the instant case on behalf of the complainant. Hence, the principles enunciated in the above cited decision would not come to the aid of the appellant/complainant, but it will assist the accused. Considering these facts and circumstances, it is evident that the learned Magistrate has

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appreciated the oral and documentary evidence in proper perspective and has rightly acquitted the accused. No perversity is found in the judgment so as to call for interference by this Court. As such, the appeal being devoid of any merits, does not survive for consideration. Accordingly, I answer the point under consideration in the negative and 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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Mr Srinivas v. Vs Mr H L Lakshmikantha

Case brief

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Mr Srinivas v. Vs Mr H L Lakshmikantha

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