Partly allowed

Amaraiah M Hiremath v. Dr R Mahabaleshwar Reddy

Karnataka HC12 Oct 2023CRL.RP/100090/2014

Case brief

AI extract

What is this about?

In this Criminal Revision, the High Court considered an appeal against conviction and sentence under Section 138 of the Negotiable Instruments Act. The court upheld the conviction but quashed the sentence of two years imprisonment. It enhanced the fine penalty to 20 lakhs with one year of simple imprisonment in default, distributing the fine as compensation to the complainant due to the elapsed ti

What did the court decide?

Conviction confirmed. Sentence of imprisonment set aside; fine enhanced to Rs. 20 lakhs (payable as compensation) with default imprisonment of one year.

Amaraiah M Hiremath Vs Dr R Mahabaleshwar Reddy — Cheque Dishonour | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 12^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 REVISION PETITION NO. 100090 OF 2014

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BETWEEN:

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AMARAIAH M. HIREMATH S/O. MUDDAIAH HIREMATH, AGE: 54 YEARS, OCC: CLASS-I CONTRACTOR, R/O. AKSHAYA NILAYA, SANGAMESH NAGAR, SHAHAPUR-585223, DISTRICT: YADGIR.

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…PETITIONER

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(BY SRI. A. P. MURARI, ADVOCATE)

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AND:

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ANNAPURNA CHINNAPPA DANDAGAL

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Digitally signed by ANNAPURNA CHINNAPPA DANDAGAL

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DR. R. MAHABALESHWAR REDDY, S/O. LATE R. BASAVA REDDY, AGE: 63 YEARS, R/O. BASAVA SADANA, COLLEGE ROAD, HOSPET, DISTRICT: BELLARY. …RESPONDENT (BY SRI. K. L. PATIL, ADVOCATE) THIS CRIMINAL REVISION PETITION IS FILED U/S 397 R/W 401 OF CR.P.C. PRAYING THIS COURT TO, CALL FOR AND EXAMINE THE RECORDS OF C.C. NO.3282/2010 OF THE ADDITIONAL CIVIL JUDGE AND J.F.M.C, HOSPET AND CRIMINAL APPEAL NO.50/2013 OF THE III ADDITIONAL DISTRICT AND SESSIONS JUDGE, BELLARY, SITTING AT HOSPET, AS TO THE CORRECTNESS, LEGALITY AND PROPRIETY OF THOSE FINDINGS AND SENTENCED AWARDED TO THE ACCUSED-PETITIONER, AND SET ASIDE THE JUDGMENT AND

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ORDER DATED 13.03.2014 IN CRL.A.NO.50/2013 PASSED BY THE III-ADDL. SESSIONS JUDGE, BELLARY, SITTING AT HOSPET, CONFIRMING THE JUDGMENT AND ORDER OF CONVICTION AND SENTENCE PASSED BY THE ADDL. CIVIL JUDGE & J.M.F.C, HOSPET, AND SET ASIDE THE JUDGMENT AND ORDER DATED 04.03.2013 PASSED BY THE ADDL. CIVIL JUDGE & JMFC HOSPET, CONVICTING THE ACCUSED/ PETITIONER AND SENTENCING HIM TO UNDERGO SI FOR TWO YEARS AND TO PAY A FINE OF RS.5000/- AND IN DEFAULT, TO UNDERGO FURTHER S.I FOR TWO MONTHS, AND ALSO PAY AN AMOUNT OF RS.15,00,000/- AS COMPENSATION TO THE COMPLAINANT U/S 357(3) CR.P.C.

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THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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Being aggrieved by his conviction and sentence imposed by the trial Court in C.C.No.3282/2010, which came to be confirmed by the Sessions Court in Criminal Appeal No.50/2013, the accused is before this Court in this petition filed under Section 397 r/w 401 of the Code of Criminal Procedure, 1973 (for short, “Cr.P.C”).

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The punishment imposed by the trial Court is as under:

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“Acting under Section 255(2) of Cr.P.C. the accused is hereby convicted for the offence punishable under Section 138 of N.I. Act.

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The accused is sentenced to undergo S.I. for 2 years and to pay fine of Rs.5,000/- in default of payment of fine he shall undergo simple imprisonment for 2 months.

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Acting under Section 357(3) of Cr.P.C. the accused is hereby directed to pay an amount of Rs.15,00,000/as a compensation to the complainant within 3 months from the date of this order, failing which, the complainant is at liberty to recover the said amount as a fine, by following due process of law.

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Supply free copy of the judgment to the accused immediately.

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Bail bonds and surety bonds stands cancelled.”

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For the sake of convenience, the parties are

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referred to by their rank before the trial Court.

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It is the case of the complainant that accused is his friend since 15 years. Accused was introduced by complainant’s brother-in-law Sanganabasappa S.Patil of Shorapur. Accused is Class-I Contractor at Shahapur of Yadagiri District. On account nature of his work, accused used to frequently borrow hand loans from complainant

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now and then and repay the same promptly. This is going

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on since 10 years.

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In the above fashion accused availed hand

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loans on several occasion and was due in sum of Rs.15 lakhs. Towards repayment of the same, he issued cheque No.980040 dated 21.03.2010 for a sum of Rs.15 lakhs. When complainant presented it on 24.03.2010, it was dishonoured due to insufficient funds. Therefore, complainant got issued a legal notice dated 10.05.2010. Though it is duly served, accused neither paid the amount due nor sent any reply. Without any alternative, complaint was filed.

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Accused appeared and contested the matter setting up a defence that the brother-in-law of complainant namely viz. Sanganabasappa S.Patil along with one Basavaraj and Ramesh were running a finance. Accused used to borrow loan from them and in this regard he had given 8 blank cheques and he handed over one of

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such cheque to the complainant and got filed the complaint.

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In support of his case, complainant examined himself as P.W.1 and got marked Exs.P.1 to 10.

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

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Accused has examined himself as D.W.1. No documents have marked on his behalf.

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Vide the judgment and order dated 04.03.2013,

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the trial Court convicted the accused and sentenced him to undergo simple imprisonment for 2 years and to pay fine of Rs.5,000/- and in default of payment of the same to undergo simple imprisonment for 2 months. The trial Court has also directed the accused to pay compensation in sum of Rs.15 lakh.

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The appeal filed by the accused before the Sessions Court came to be dismissed.

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Aggrieved by the same, the accused is before this Court contending that the impugned judgment and orders are contrary to law and facts and as such liable to be set aside. Both Courts have erred in not appreciating the oral and documentary evidence in right perspective resulting in great injustice to the accused. They have failed to appreciate the defence of the accused that the cheque in question was one out of the 8 blank cheques given by the accused to Sanganabasappa S.Patil while borrowing loan from finance run by him. The findings of the both Courts are based on surmises and conjectures. Viewed from any angle, the impugned judgment and orders are not sustainable. The punishment imposed is also on the higher side and prays to allow the petition, set aside the impugned judgement and orders and acquit the accused.

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On the other hand, learned counsel for the complainant supported the impugned judgments and orders and submitted that in the light of the presumption under Sections 118 and 139 of Negotiable Instruments Act

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(for short, “N.I.Act”) and the oral and documentary evidence placed on record, the trial Court as well as the Sessions Court have rightly held that the accused guilty and in the absence of the accused leading any substantial evidence to prove his defence, both Courts are justified in holding that the allegations made against accused are proved and this is not fit case to interfere with the concurrent findings while exercising powers under Section 397 of Cr.P.C. and prays to dismiss the petition.

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In support of his arguments, learned counsel for the complainant has relied upon the decision of Hon’ble Supreme Court in C.C.Alavi Haji Vs. Palapetty Muhammed and another (C.C.Alavi Haji)¹ .

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15. Heard arguments and perused records.

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Having regard to the fact that accused admit that the cheque in question is drawn on his account maintained with his banker and it bears his signature, as

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1 2007 AIR SCW 3578

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held by the Hon’ble Supreme Court in Rangappa vs Sri Mohan (Rangappa)² , presumption under Section 118 and 139 of N.I. Act comes into operation that it is issued towards repayment of any legally recoverable debt or liability and thereby placing the burden on the accused to rebut the presumption and to prove the circumstances in which the cheque has reached the hands of complainant. Only after the accused rebut the presumption the burden would shift on the complainant to prove his case. Ofcourse, it is sufficient for the accused to discharge the burden placed on him by preponderance of probabilities, whereas the complainant is required to prove his case beyond reasonable doubt. Ofcourse, this situation would arise only after the accused rebut the statutory presumption.

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At the outset for maintaining a complaint u/sec.200 Cr.P.C. for the offence punishable u/sec.138 of N.I. Act, issue of legal notice is one of the essential

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2 (2010) 11 SCC 441

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ingredients. In the present case, the complainant has issued legal notice as per Ex.P4 which is office copy of the legal notice maintained by learned counsel for complainant. According to the complainant, it is duly served on the accused as per the acknowledgement at Ex.P5. However having regard to the fact that the acknowledgment does not bear his signature, the accused disputed the said fact. However the accused has not disputed his address to which the legal notice is sent.

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As per Sec.27 of the General Clauses Act, “where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression “serve” or either of the expressions “give” or “send” or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at

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which the letter would be delivered in the ordinary course of post.”

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19. In the light of this provision, it shall be deemed

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that the service is effected when the notice was sent by properly addressing, prepaying and posting by registered post, a letter containing the document to have been effected at the time at which the letter would be delivered in the ordinary course of post, unless the contrary is proved. Ofcourse accused has neither pleaded nor proved that he is not residing at the address to which the legal notice was sent. Infact as per Ex.P7 the complainant has addressed a letter to the postmaster ascertaining the date on which the notice is served on the accused. The postmaster has sent reply as per Ex.P8 stating that the post is delivered on 14.05.2010. In the light of the above discussion, the mandatory requirement of issuing legal notice is complied with.

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20. Ofcourse, the accused has not sent any reply to

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the said notice. In this regard, the learned counsel for

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respondent/accused has relied upon the decision in C.C.Allavi Haji V/s Pallapetti Muhammed reported in 2007

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AIR SCW 3578 ≡ (2007) 6 SCC 555, wherein the Full Bench of the Hon’ble Supreme Court held that the object of issuing notice under proviso (b) and (c) of Section 138 is to afford an opportunity to the accused to pay the amount due under the cheque and thereby avoid unnecessary hardship to an honest drawer. At para 17, the Hon’ble Supreme Court observed that the requirement of giving of notice under the provisions of Sec.138 of N.I. Act is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the Court in respect of the complaint u/sec.138 of N.I. Act may make payment of the amount due under the cheque and submit to the Court that he has made payment of the cheque amount and therefore the complaint is liable to be rejected. However in the present case, the accused has not opted to do so, since he is

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disputing that he has borrowed hand loan from complainant and issued the subject cheque towards repayment of the same.

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Now coming to the merits of the case. Since the accused admit that the cheque in question is drawn on his account maintained with his banker and it bears the signature, the presumption u/sec.118 and 139 of N.I. Act comes into picture and it is for the accused to rebut the same. Admittedly the complainant came to acquainted with the accused through his brother-in-law Sanganabasappa S.Patil and they used to visit each others residence, attended the marriage and other functions of each other family. It is also admitted by the accused that in his capacity as a Class-I contractor and having regard to the fact there used to be delay in passing of bills at the government level, he was in constant need of funds and used to borrow loan from Sanganabasappa S.Patil and his two friends who were running a finance.

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However he has disputed that he used to borrow money from the complainant. He has claimed that he issued 8 blank cheques to Sanganabasappa S.Patil and utilizing one such cheque, he got filed the present complaint through the complainant. Though the accused has claimed that he has repaid the loan taken from Sanganabasappa S.Patil and his friends, admittedly he has not taken back the cheques which he has allegedly issued in blank to him. The accused has claimed that since 6 years he has no transaction with Sanganabasappa S.Patil and Basavaraj. The accused has no explanation as to why he did not choose to take back the blank cheques given to them. If at all the said Sanganabasappa S.Patil, Basavaraj and Ramesh have refused to return the cheques, there was no impediment for him to bring it to the notice of his banker and give instructions for stop payment.

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According to the accused, he had taken loan of Rs.45 lakhs from the bank run by Basavaraj and he has repaid the same. The cross-examination of accused reveal

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that Canara Bank has filed suit against him for recovery of loan amount. State Bank of Hyderabad has issued paper notification regarding loan due from the accused. One Mahesh has filed complaint for the offence punishable u/sec.138 of N.I. Act as per Ex.P10. These facts indicate that the accused was in the habit of borrowing loan from different persons and failed to repay the same. Having failed to send reply to the legal notice, the accused has not only failed to avail the opportunity to pay the amount due under the cheque, but also lost an opportunity to put forth his defence at the earliest.

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Anyhow taking into consideration the oral and documentary evidence placed on record, the trial Court as well as Sessions Court have come to the correct conclusion that the accused has failed to rebut the presumption u/sec.118 and 139 of N.I. Act. On the other hand, complainant has proved that the subject cheque was issued towards repayment of legally recoverable debt or

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liability. This Court finds no justifiable grounds to interfere

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with the said conclusions arrived at by both Courts.

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Alternatively the learned counsel for accused submitted that if this court refused to interfere in exercise of power u/sec.397 Cr.P.C., the sentence of imprisonment may be set aside. On the other hand, learned counsel for respondent/complainant submitted that in the event of this Court reducing or setting aside sentence of imprisonment, the fine may be enhanced as for all these 13 years, the accused has unnecessarily dragged the complainant from one Court to the other.

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The offence u/sec.138 of N.I. Act is more of a civil nature. Though it prescribes punishment of imprisonment which may extend to 2 years, discretion is given to the Courts either to impose sentence of imprisonment which may extend to 2 years or with fine which may extend to double the cheque amount or with both.

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It appears at one point of time there was cordial relationship between the accused, complainant, Sanganabasappa S.Patil, Basavaraj and Ramesh. When the accused faced bad time, he has failed to repay the hand loan taken from various persons and also banks and other financial institutions and facing the consequences. Taking into consideration these aspects, this Court is of the considered opinion that sentencing the accused to undergo imprisonment is harsh and therefore the order of the trial Court imposing sentence of imprisonment is liable to be set aside. However taking into consideration the fact that the case is of the year 2010 and by now 13 years have lapsed, it is necessary to enhance the fine. Taking into consideration the facts and circumstances of the case, sentencing the accused to pay fine of Rs.20 lakhs in default of payment of the same to undergo imprisonment for 1 year would be reasonable, adequate and would meet the ends of justice. The entire sum of Rs.20 lakhs shall be paid to the complainant by way of compensation. To this

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extent, the impugned judgments and orders are liable to be modified and accordingly, the following:

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ORDER

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Petition filed u/sec.397 r/w 401 Cr.P.C. is

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allowed in part.

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The impugned judgment and order dated 04.03.2013 in C.C.No.3282/2010 convicting the accused for the offence punishable u/sec.138 of N.I. Act, which is confirmed by the Sessions Court in Crl.A.No.50/2013 dated 13.03.2014 is confirmed.

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However order sentencing accused to undergo imprisonment for 2 years and pay compensation of Rs.15,00,000/- is set aside.

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The accused is sentenced to pay fine of Rs.20 lakhs instead of Rs.5,000/- and in default to undergo simple imprisonment for 1 year.

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