Dismissed

Mr Charles Harry v. Sri Praveen Jain

Karnataka HC1 Sept 2023CRL.A/862/2012

Case brief

AI extract

What is this about?

In three criminal appeals under Section 378 CrPC, the High Court rejected the complainant's challenge to acquittals in cheque dishonour cases. The court held the complainant failed to prove lending capacity and the accused successfully rebutted the NI Act presumption.

What did the court decide?

Appeals dismissed; impugned acquittals and Sessions Court order confirmed; records remanded to trial courts.

Mr Charles Harry Vs Sri Praveen Jain — Cheque Dishonour | Karnataka HC (2023)

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CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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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

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BEFORE

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

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CRIMINAL APPEAL NO.862 OF 2012 C/W

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CRIMINAL APPEAL NO.280 OF 2012 CRIMINAL APPEAL NO.281 OF 2012

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IN CRIMINAL APPEAL NO.862 OF 2012

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BETWEEN:

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MR CHARLES HARRY S/O GEORGE ANTHONY, AGED ABOUT 33 YEARS, RESIDING AT NO 18,1 ST CROSS, KRISHNAPPA LAYOUT, SRINAGAR, BANGALORE-560050.

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…APPELLANT

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(BY SRI. RAGHAVENDRA C., ADVOCATE)

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AND:

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SRI PRAVEEN JAIN S/O SRI SANTHOSH KUMAR JAIN, AGE MAJOR, RESIDING AT NO.14, FIRST FLOOR, CASTLE STREET, ASHOKNAGAR, BANGALORE-560025.

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…..RESPONDENT

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(BY SMT.V. GANGA BAI, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET-ASIDE THE JUDGEMENT DATED 26.06.2012, PASSED IN CRIMINAL APPEAL NO.107/2012, BY THE FAST TRACK (SESSIONS) JUDGE - V, BANGALORE BY CONFIRMING THE JUDGMENT OF

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CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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CONVICTION AND SENTENCE PASSED IN C.C. NO.6597 OF 2009 DATED 16.01.2012 PASSED BY THE 16TH A.C.M.M., BENGALORE AND PASS SUCH OTHER ORDERS AS THIS HON'BLE COURT SHALL DEEM FIT IN THE INTEREST OF JUSTICE.

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CRIMINAL APPEAL NO.280 OF 2012

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BETWEEN:

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MR CHARLES HARRY, S/O GEORGE ANTHONY, AGED ABOUT 33 YEARS, R/A NO.18, 1ST CROSS KRISHNAPPA LAYOUT, SRINAGAR, BANGALORE-560050.

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…APPELLANT

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(BY SRI. RAGHAVENDRA C., ADVOCATE)

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AND:

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SRI SANTHOSH KUMAR JAIN S/O LATE KASTUR CHAND, AGED ABOUT 62 YEARS, R/A NO.14, FIRST FLOOR, CASTLE STREET, ASHOKNAGAR, BANGALORE-560025

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…..RESPONDENT (BY SMT.V. GANGA BAI, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET ASIDE THE ORDER OF ACQUITTAL DATED 13.01.2012 PASSED IN C.C. No.6596/2009 BY THE XVI ADDL. CMM., BANGALORE AND PASS SUCH OTHER ORDERS AS THIS HON'BLE COURT SHALL DEEM FIT IN THE INTEREST OF JUSTICE.

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CRIMINAL APPEAL NO.281 OF 2012

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BETWEEN:

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MR CHARLES HARRY, S/O GEORGE ANTHONY,

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CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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AGED ABOUT 33 YEARS, R/A NO.18, 1ST CROSS KRISHNAPPA LAYOUT, SRINAGAR, BANGALORE-560050.

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…APPELLANT

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(BY SRI. RAGHAVENDRA C., ADVOCATE)

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AND:

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SMT. PRIYA, W/O PRAVEEN JAIN, AGE:MAJOR RESIDING AT NO.14, FIRST FLOOR, CASTLE STREET, ASHOKNAGAR, BANGALORE - 560025.

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…..RESPONDENT

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(BY SMT.V. GANGA BAI, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET ASIDE THE ORDER OF ACQUITTAL, DATED 13.01.2012 PASSED IN C.C. NO.6595 OF 2009 BY THE XVI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BANGALORE; AND PASS SUCH OTHER ORDERS AS THIS HON'BLE COURT SHALL DEEM FIT IN THE INTEREST OF JUSTICE.

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THESE CRIMINAL APPEALS HAVING BEEN HEARD AND RESERVED ON 19TH JULY 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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In these appeals, complainant has challenged the acquittal of respondent/accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘N.I.Act’).

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4 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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In Crl.A.Nos.280/2012 and 281/2012,

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challenge is to the impugned judgment and order of the trial Court acquitting the respondent/accused, whereas in Crl.A.No.862/2012, challenge is to the order of the Sessions Court, which reversed the conviction of respondent/accused and acquitted him.

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For the sake of convenience, in these appeals, the appellant is referred to as complainant and respondents are referred to by their names prefixed by the term accused.

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The complainant prosecuted these accused in C.C.Nos.6595/2009, 6596/2009 and 6597/2009.

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Accused Priya Jain and accused-Santosh Kumar Jain are the wife and father of accused Praveen Jain.

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Since complainant is common, the accused

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are related to each other and the cheques are allegedly issued by accused towards repayment of loan borrowed by accused-Praveen Jain and involve common

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5 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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discussions, these appeals are clubbed and disposal of by common order.

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It is the case of the complainant that he and accused Praveen Jain are friends. During February 2006, for his financial needs i.e to meet his business exigency, accused Praveen Jain borrowed a sum of Rs.6,80,000/from the complainant, promising to repay the same with interest at 5% per month, within one year. However, he did not keep up his promise and on repeated request and demand, he got issued a cheque for Rs.2,00,000/- from his wife i.e., accused-Priya Jain, a cheque for Rs.1,10,000/- from his father i.e., accused-Santosh Kumar Jain and he also issued three separate cheques for Rs.2,00,000/-, Rs.20,000/- and Rs.1,50,000/-. When complainant presented them for realization, all the cheques were dishonoured for want of sufficient funds in the respective accounts. Therefore complainant got issued separate notices to all the accused. Instead of complying with the said notice, the accused have sent untenable reply. Therefore complainant has filed three separate complaints.

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6 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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After due service of notice, accused have

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appeared through counsel and contested the cases. They have pleaded not guilty to the charges and claimed trial.

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In order to prove the allegations against the accused, in all the complaints, complainant has examined himself as PW-1. In C.C.No.6595/2009 and C.C.No.6596/2009, he has relied upon Ex.P1 to 10 each. In C.C.No.6597/2009, he has relied upon Ex.P1 to 15.

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During the course of their statements under Section 313 Cr.P.C., the accused have denied the incriminating evidence.

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In all the three complaints, the accused have examined themselves as DW-1. In C.C.No.6597/2009, the accused has also examined income tax officer as DW2. He relied upon Ex.D1 to 14.

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Vide the impugned judgment and orders, the trial Court acquitted accused Priya Jain and accusedSantosh Kumar Jain. However, the trial Court convicted Praveen Jain and sentenced him to pay a fine of

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7 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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Rs.5,50,000/- in default to undergo simple imprisonment for six months.

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Aggrieved by his conviction and sentence, Praveen Jain filed Crl.A.No.107/2012. Vide the impugned judgment and order, the Sessions Court allowed the appeal and acquitted him.

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Aggrieved by the acquittal of all the accused, complainant is before this Court contending that in the light of the fact that accused admitted that the respective cheques were drawn by them on their account maintained with the banker, it was obligatory on the part of the Courts below to draw presumption under Section 118 and 139 of N.I. Act that the Cheques were issued towards repayment of any legally recoverable debt or liability and thereby placing the burden on the accused to rebut the same. In the present case, the accused have failed to rebut the presumption and this fact is not appreciated by the Courts below. The trial Court has also not appreciated the evidence of the income tax officer who is examined as DW-2 in C.C.No.6597/2009. Viewed

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8 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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from any angle the impugned judgments and orders are

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not tenable and calls for interference by this Court.

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

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(i) M/s Bethal Products (India) Vs. Jayakumar ( M/s Bethal )¹

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On the other hand, the learned counsel appearing for accused has supported the impugned judgments and orders and prays to dismiss the appeals.

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Heard arguments of both sides and perused the record.

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It is not in dispute that accused-Priya Jain is

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the wife and accused-Santosh Kumar Jain is the father of complainant-Praveen Jain. It is the definite case of the complainant that Praveen Jain borrowed a sum of Rs.6,80,000/- with a promise to repay the same with interest at 5% per month within a period of one year.

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1 Crl.A.No.1060/2010 Dt.19.11.2020

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9 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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However, when he failed to repay the same as promised, and on being insisted upon by the complainant, he got issued one cheque each from his wife and father and for the balance amount, he issued three cheques of his own. However, all of them were dishonoured for want of sufficient funds, and despite service of notice when the accused failed to repay the amount due, they are being prosecuted in these complaints.

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Though the accused admit that the cheques in question belongs to them, and they bear their signature, they have disputed that these cheques were issued towards repayment of any legally recoverable debt or liability. On the other hand, in the reply notice they have specifically contended that for his business exigency, complainant had taken blank signed cheques of the accused and misusing the same he has filed false complaints against them. In the reply notices, the accused have specifically pleaded that at the relevant point of time when the complainant has allegedly advanced Rs.6,80,000/- to the accused, he had no

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10 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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financial capacity. In the light of the specific defence taken by the accused, it is necessary to examine whether the allegations against accused are proved beyond reasonable doubt.

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Having regard to the fact that the accused admit that the cheques in question are drawn on their respective accounts maintained with their bankers and they bear their signatures, presumption under Section 118 and 139 of N.I Act is attracted and is operating in favour of the complainant that the said cheques were issued towards repayment of any legally recoverable debt or liability. Therefore, the burden is on the accused to rebut the presumption, in which event the burden shifts on the complainant to prove that he had advanced Rs.6,80,000/- and the cheques in question was issued towards repayment of the same. Of course it is for the complainant to prove that, he had the financial capacity to lend Rs.6,80,000/- at the relevant point of time.

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As discussed earlier, since the accused admit

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that the respective cheques belongs to them and bears

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11 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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their signatures, and they are drawn on an account maintained with their banker, the presumption under Section 118 and 139 of N.I.Act is operating in favour of the complainant and against the accused that the cheques were issued towards repayment of any legally recoverable debt or liability. Therefore the burden is on the accused to rebut the presumption. After receipt of legal notice, at the earliest available opportunity, the accused have denied and disputed the allegations that accused Praveen Jain borrowed a sum of Rs.6,80,000/and towards repayment of the same the subject cheques are issued. Of course the accused have disputed the financial capacity of the complainant and that accused Praveen Jain had the necessity to borrow a huge sum of Rs.6,80,000/-. Therefore, it is for the complainant not only to prove that he had the financial capacity, but also to establish that the relevant point of time accused Praveen Jain had the necessity of borrowing Rs.6,80,000/-.

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12 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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Except stating that accused Praveen Jain had

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exigency of borrowing Rs.6,80,000/-, the complainant has not disclosed what was the necessity of borrowing the said sum. In C.C.No.6596/2009, the accused has made an unsuccessful attempt to show that he had financial capacity to lend the amount in question. By producing Ex.P9 and 10 i.e., Income tax returns for the Assessment years 2005–06 and 2006–07, the complainant has made an unsuccessful attempt to prove his financial capacity. However, he has been crossexamined at length wherein the accused is able to elicit admissions that his PAN number is AAVPH7403B, whereas in the income tax returns, he has given different PAN number. Though he has claimed that it was a mistake, as admitted by him, he has not chosen to inform the Income tax department that there is mistake in specifying the PAN number. In fact, the accused have taken up a specific defence that intentionally he has quoted a wrong PAN number.

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13 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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In C.C.No.6597/2009, accused Praveen Jain

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has chosen to examine the Income tax officer as DW-2 and through his evidence establish the fact that the Income tax returns filed by the accused is not cross verified by the department, as it was not randomly choose for scrutiny. As admitted by the accused, for the first time he has submitted the Income tax returns and subsequent to it also he had not submitted Income tax returns. As admitted by him in the Income tax returns, signatures of his auditor are not forthcoming. The accused have specifically contended that for the purpose of these complaints, the accused has filed Income tax returns with the self serving statement which are untrue. As admitted by him, he has not maintained any books of accounts. In fact, he has admitted that after depositing said amount with the Bank and based on it, he has submitted the Income tax return. As admitted by him even in the Income tax return, he has not specified the fees paid to the auditor. As conceded by him, the auditor has submitted returns only based on his representation

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14 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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and the contents therein are not supported by any bills or documents.

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In fact, in C.C.No.6595/2009, the complainant has admitted that he is doing money lending business. However, he has not maintained any records and admittedly, he has not received any documents from the accused or at least accused Praveen Jain for having lent Rs.6,80,000/-. After giving this admission, in the other two cases, the complainant has denied the suggestion that he is engaged in money lending, though in the complaint as well, as in the legal notice, he has claimed that accused Praveen Jain agreed to pay interest at the rate of 5% per month.

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The complainant has admitted that he is running a service station in a rented premises and except the same he is not having any other source of income. As admitted by him, the complainant is not having any documents to support the details forthcoming in his Income tax returns. It is also elicited during his crossexamination that during 2005-06, he has borrowed a

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15 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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sum of Rs.27,75,000/- from Bank to purchase immovable property and he was required to pay monthly installments.

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25. During his cross-examination, the accused has

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claimed that he is having six houses and at the relevant point of time he had mortgaged them and was in receipt of mortgage money from the tenants. However, he has not chosen to produce the mortgage deeds or any document to show that he was in receipt of Rs.6,80,000/-, which he has claimed to given to accused Praveen Jain. Despite the accused challenging the financial capacity of the complainant and his marathon cross-examination, the complainant has not led any reliable evidence to prove that at the relevant point of time he was in possession of Rs.6,80,000/- and paid the same to accused Praveen Jain, so as to probabalise his contention that the cheques in question were issued by accused Praveen Jain towards repayment of the said loan. By preponderance of probabilities, the accused have rebutted the presumption under Section 118 and

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16 CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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139 of N.I.Act. However, the complainant has failed to discharge the burden shifted on him.

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Appreciating the oral and documentary

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evidence placed on record the trial Court rightly acquitted accused Priya Jain and Santosh Kumar Jain. Similarly, on appreciation of the oral and documentary evidence placed on record, the Sessions Court has rightly set aside the conviction of Praveen Jain and acquitted him. This Court find no justifiable reasons to interfere with the impugned judgments and orders. In the result, the appeals fails and accordingly the following;

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ORDER

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(i) Appeals filed by the complainant are dismissed.

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(ii) The impugned judgment and order of the trial Court in C.C.Nos.6595/2009 and 6596/2009 and Sessions Court in Crl.A.No.107/2012 on the file of Fast Track (Sessions) Judge-5, Bangalore City are hereby confirmed.

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CRL.A.NO.862/2012 C/W CRL.A.NO.280/2012, CRL.A.NO.281/2012

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(iii) The Registry is directed to send back the trial

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Court and Sessions Court records along with

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copy of the Judgment forthwith.

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Sd/JUDGE

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RR/KGK

Mr Charles Harry v. Sri Praveen Jain

Case brief

What is this about?

What did the court decide?

Mr Charles Harry v. Sri Praveen Jain

Case brief

What is this about?

What did the court decide?

What the court decided

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