Dismissed

Sri Vasudevan Sampath Kumar v. Smt Shaila Mathias

Karnataka HC3 Oct 2023CRL.RP/1156/2021

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed a criminal revision petition challenging the conviction under Section 138 of the Negotiable Instruments Act. The Court upheld the conviction, rejecting the accused's claim that the cheque was obtained under duress by police officers, noting the accused admitted issuing the cheque and failed to rebut the statutory presumption.

What did the court decide?

Criminal Revision Petition dismissed; accused convicted under Section 138 of NI Act.

Sri Vasudevan Sampath Kumar Vs Smt Shaila Mathias — Cheque Dishonour | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3^RD DAY OF OCTOBER, 2023

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BEFORE

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THE HON'BLE MRS JUSTICE M G UMA

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CRIMINAL REVISION PETITION NO. 1156 OF 2021

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BETWEEN:

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SRI. VASUDEVAN SAMPATH KUMAR AGED ABOUT 56 YEARS DIRECTOR, M/S MAYAN ESTATE PVT. LTD., DODDAIAH LAYOUT BABUSABPALYA BENGALURU - 560 043.

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…PETITIONER

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(BY SRI: SHRIDHARA .K., ADVOCATE)

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Digitally signed by PAVITHRA N Location: High Court Of Karnataka

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AND:

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SMT. SHAILA MATHIAS W/O. LATE N.C. MATHIAS AGED ABOUT 66 YEARS R/AT APARTMENT NO.004 ASHOKA PARKVIEW - 42 DAVIS ROAD, RICHARDS TOWN BENGALURU - 560 084.

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…RESPONDENT

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(BY SRI: MANJUNATH PRASAD .H.N., ADVOCATE)

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THIS CRL.RP IS FILED UNDER SECTION 397 READ WITH SECTION 401 OF CR.PC PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF CONVICTION DATED 07.06.2019 IN C.C.NO.50613/2017 ON THE FILE OF THE LVII A.C.M.M., MAYO HALL UNIT, BENGALURU FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE N.I ACT AND ALSO SET ASIDE THE ORDER DATED 11.08.2021 PASSED IN CRL.A.NO.25177/2019 ON THE FILE OF THE LXXIII ADDL.CITY CIVIL AND SESSIONS JUDGE, AT BENGALURU WHERE THE PETITIONER COURT HAS CONFIRMED THE ORDER OF CONVICTION.

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THIS CRL.RP COMING ON FOR ADMISSION THIS DAY, THE COURT PASSED THE FOLLOWING:

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O R D E R

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The accused in CC No.50613 of 2017 on the file of the learned LVII Additional Chief Metropolitan Magistrate, Mayohall Unit, Bengaluru (hereinafter referred to as 'the Trial Court' for brevity), is impugning the judgment of conviction and order of sentence dated 07.06.2019, convicting the accused for the offence punishable under Section 138 of Negotiable Instruments Act (for short 'NI Act') and sentencing to pay fine of Rs.5,000/- in default, to undergo simple imprisonment for a period of three months and to pay compensation of Rs.29,91,000/- to the complainant, in default to undergo simple imprisonment for a period of one year, which was confirmed vide judgment dated 11.08.2021 passed in Criminal Appeal No.25177 of 2019 on the file of the learned LXXIII Additional City Civil and Sessions Judge, Mayohall Unit, Bengaluru (CCH-74) (hereinafter referred to as 'the First Appellate Court' for brevity), by dismissing the appeal.

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Brief facts of the case are that, the complainant filed the private complaint in PCR No.50081 of 2017 against the accused alleging commission of the offence punishable under Section 138 of NI Act. It is contended that the complainant

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had filed the suit OS No.4172 of 2014 and OS No.4178 of 2014 on the file of the City Civil Court, Bengaluru, seeking recovery of sum of Rs.25,00,000/- each against the accused. The complainant and the accused before the Trial Court compromised the matter and the accused agreed to pay a sum of Rs.28,00,000/- and had issued the post dated cheque bearing No.856644 dated 17.07.2016, after paying Rs.22,00,000/- by way of demand draft.

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It is contended that the accused had paid a sum of Rs.8,00,000/- and had taken back the cheque bearing No.856644 from the complainant and issued fresh cheque bearing No.856651 dated 17.08.2016 for a sum of Rs.20,00,000/-. The said cheque was presented for encashment, but it was dishonored as funds insufficient. The complainant issued the legal notice informing the accused about dishonor of cheque and calling upon him to repay the cheque amount. The notice was served on the accused without any demur. Thereby, the accused has committed the offence punishable under Section 138 of NI Act. Accordingly, he prayed the Trial Court to take cognizance of the offence and to initiate legal action against the accused.

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The Trial Court took cognizance of the offence and summoned the accused to appear before the Court. The accused appeared before the Court in response to the summons and pleaded not guilty for the accusations made against him. The complainant examined herself as PW1 got marked Exs.P1 to P11 in support of her contention. The accused has denied all the incriminating materials on record in his statement recorded under Section 313 of Cr.P.C. and examined himself as DW1. The Trial Court after taking into consideration all these materials on record, came to the conclusion that the complainant is successful in proving the guilt of the accused beyond reasonable doubt and convicted and sentenced the accused as stated above.

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Being aggrieved by the same, the accused has preferred Criminal Appeal No.25177 of 2019. The First Appellate Court on re-appreciation of the materials on record dismissed the appeal by confirming the impugned judgment of conviction and order of sentence passed by the Trial Court.

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Being aggrieved by the same, the accused is before this Court.

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Heard Sri K Shridhara, learned counsel for the revision petitioner and Sri H N Manjunath Prasad, learned counsel for the respondent. Perused the materials including the Trial Court records.

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Learned counsel for the revision petitioner contended that the dispute between the parties is of civil nature. The claim of the complainant is barred by limitation as the transaction referred to by the complainant is of the year 2016. There was no legally enforceable debt or liability in favour of the complainant, as even according to the complainant, the money was due to his son and son-in-law. The complainant is a stranger to the transaction. Moreover, even according to the complainant, the son and son-in-law of the complainant had paid the amount in favour of M/s Mayan Estates (P) Ltd., a Company. There is no compliance of Section 141 of NI Act. Under such circumstances, the Trial Court and the First Appellate Court have committed an error in convicting the accused.

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Learned counsel further submitted that the cheque

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Ex.P1 was obtained by the complainant in the police station.

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It was under threat and duress, the cheque in question was got issued. Therefore, the offence under Section 138 of NI Act could not have been made out against the accused. Hence, he prays for setting aside the impugned judgment of conviction and order of sentence passed by the Trial Court and confirmed by the First Appellate Court, in the interest of justice and to acquit the accused.

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Per contra, learned counsel for the complainant - respondent opposing the revision petition submitted that the investment of Rs.50,00,000/- was by the son and son-in-law of the complainant during 2007-2008. Since they were residents of United States of America, the complainant being the general power of attorney holder was looking after the investment and also recovery of the amount. The complainant in her capacity of general power of attorney holder filed the suits OS No.4172 of 2014 and OS No.4178 of 2014 on the file of the City Civil Court, Bengaluru, seeking recovery of sum of Rs.25,00,000/each against the accused. During the pendancy of the suits, the accused came forward and comprised the matter. As a result, the compromise petition as per Exs.P6 and 8 came to filed. As per the terms of compromise, the accused had taken

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back the original title deeds from the complainant and had issued the post dated cheque as referred to in the compromise petition. However, the accused taken back the said cheque by executing Ex.P11 and issuing the cheque - Ex.P1 in favour of the complainant. On presentation of the cheque - Ex.P1, the same was dishonored. Even after service of legal notice, the accused had neither replied nor complied with the demands made therein. Thereby, it is a clear case of commission of offence under Section 138 of NI Act. The Trial Court and the First Appellate Court on considering the oral and documentary evidence placed before it, rejected the contention taken by the accused and accordingly, the accused was convicted and sentenced as stated above. No grounds are made out to entertain the revision petition. Hence, he prays for dismissal of the revision petition.

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In view of the rival contentions urged by learned counsel for both the parties, the point that would arise for my consideration is:

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"Whether the impugned judgment of conviction and order of sentence passed by the Trial Court, which was confirmed by the First

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Appellate Court suffers from infirmities and calls for interference by this Court?"

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My answer to the above point is in the 'Negative' for the following:

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REASONS

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It is the specific contention of the complainant that he had filed the suit OS No.4172 of 2014 and OS No.4178 of 2014 on the file of the City Civil Court, Bengaluru, seeking recovery of sum of Rs.25,00,000/- each against the accused, which ended in compromise, where the accused agreed to pay a sum of Rs.28,00,000/- and had issued the post dated cheque bearing No.856644 dated 17.07.2016, apart from paying Rs.22,00,000/- by way of DD. It is also his contention that the accused paid an additional sum of Rs.8,00,000/- and taken back the cheque bearing No.856644 dated 17.07.2016 for Rs.28,00,000/- and issued cheque bearing No.856651 dated 17.08.2016 for Rs.20,00,000/-. The same came to be dishonored on presentation and the accused has not replied nor repaid the cheque amount on service of legal notice. Therefore, the accused has committed the offence punishable under Section 138 of NI Act.

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Filing of the suit OS No.4172 of 2014 and OS

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No.4178 of 2014 on the file of the City Civil Court, Bengaluru, seeking recovery of sum of Rs.25,00,000/- each against the accused, before the City Civil Court at Bengaluru, is not in dispute. Entering into compromise between the complainant and the accused as per Exs.P6 and P8 and drawing the decrees as per Exs.P7 and 9 are also not in dispute. There is reference to the cheque bearing No.856644 dated 17.07.2016 in Exs.P6 and 8 drawn by the accused as the defendant in the suit for Rs.28,00,000/-. Ex.P11 is the letter dated 15.07.2016 written by the accused addressed to the complainant, where he refers to the cheque bearing No.856644 dated 17.07.2016, which was issued for Rs.28,00,000/- towards final settlement and also states that due to some administrative problems, he would like to defer the payment and therefore, paid Rs.8,00,000/- by way of cheque bearing No.856650 dated 15.07.2016. It is also stated that for the balance amount of Rs.20,00,000/-, he issued the cheque bearing No.856651 dated 17.08.2016. He also endorsed that he is bound by all the terms of settlement dated 17.04.2016.

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14. The accused examined himself as DW1. During

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cross examination, he has taken a defence that during 2014 police had called him, threatened with dire consequences and forced him to issue the blank signed cheque in favour of the complainant and accordingly, he issued the blank signed cheque in the police station. However, he asserts that he had paid Rs.8,00,000/- to the complainant during 2016 or 2017. During cross examination, witness admitted that he is a party in the suit OS No.4172 of 2014 and OS No.4178 of 2014 on the file of the City Civil Court, Bengaluru, as a Director of the Company, but he never raised the defence that he is not liable to pay any amount to the plaintiff therein. He admits that both the suits were ended in compromise as per Exs.P6 and 8, which bears his signature. He also admits the terms and conditions of the compromise and also states that the said compromise was without any force, coercion or undue influence. He entered into the compromise voluntarily. Witness admits that he had issued DD for Rs.22,00,000/- in his personal capacity, in favour of the complainant as referred to in Ex.P6. However, he contends that he was forced to pay the said amount by the complainant in Hennur Police Station.

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Admittedly, the accused has not complained against the complainant or against the police official of Hennur Police Station before the higher officers. He has never issued stop payment instructions to his banker to stop the payment in respect of the cheque referred to in Ex.P6. Interestingly, he has not issued any reply to the legal notice Ex.P3. Even though learned counsel for the petitioner tried to contend that the legal notice was never served on the accused, learned counsel for the complainant drew my attention to the evidence of the accused who is examined as DW1, where he categorically admits the receipt of legal notice, which is as per Ex.P3.

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It is pertinent to note that the accused admits Ex.P1 as the cheque belongs to his bank account and it bears his signature. He also admits his signature found on Ex.P11. However, he contends that he has only signed the said document. But the fact remains that the cheque bearing No.856644 dated 17.07.2016 for Rs.28,00,000/-, which was referred to in Ex.P6 was never presented for encashment by the complainant. Ex.P11 explains as to why the said cheque was not presented for encashment and under what

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circumstances, Ex.P1 came to be issued by the accused in favour of the complainant.

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According to the learned counsel for the accused, the accused was summoned to Hennur Police Station on 17.07.2016 and the cheque in question was obtained by him. It is pertinent to note that the civil suit referred to above were compromised on 17.04.2016 before the City Civil Court. But the accused has not raised his objection regarding the complainant taking the blank cheque with his signature in the Police Station through force. If at all, the complainant had taken the cheque in question forcibly in the Police Station, there is absolutely no reason as to why the accused agreed for compromise within 10 days. The accused could have informed the Court about such high handed acts of the complainant and he could have refused to sign the compromise petition. Interestingly, the settlement agreement dated 17.04.2016 entered into between the parties produced as per Ex.P10 bears the endorsement of the accused for having taken the original title deed from the complainant in the presence of his advocate as per the terms of compromise.

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There is absolutely no explanation for any of these facts and circumstances. Therefore, the contention taken by the accused

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that he was forced to issue blank cheque with his signature to the complainant by Hennur Police Station after summoning him to the Police Station, cannot be accepted.

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Learned counsel for the petitioner contended that

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the dispute between the parties is of civil nature. But the compromise petition entered into between them in civil suit ended in issuance of post dated cheque, which was later withdrawn by the accused and issued Ex.P1 as per Ex.P11. Under such circumstances, this contention of the accused cannot be accepted.

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The other contention taken by the accused that the claim of the complainant was barred by limitation since the transaction is of the year 2008 and that there is no legal enforceable debt by the complainant against the accused, also cannot be accepted in view of admitted proceedings before the

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Trial Court and entering into compromise by executing the settlement agreement and issuing the cheque in question pursuant to Ex.P11.

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Learned counsel for the petitioner also tried to contend that the requirement of Section 141 of NI act is not

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complied with. Ex.P1 the cheque was issued by the accused in his personal capacity and not as a Director of the Company. He also admits that he had made part payment before the Civil Court in his individual capacity and not in his capacity as Director of the Company. Therefore, none of the contention raised by the accused could be accepted as a legal defence.

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The materials on record disclose that the accused admits issuance of cheque - Ex.P1 with his signature. He admits his signature on Ex.P11. He admits filing of the civil suit by the complainant before the Trial Court and entering into compromise as per Exs.P6 and 8. He admits receiving of the original documents from the complainant in terms of the compromise petition. The only defence raised by the accused is that Ex.P1 - cheque was obtained by the complainant by force through Hennur Police Station. The said defence is rejected as not acceptable. There is also no reason as to why he has not issued any reply to Ex.P3. Therefore, it is to be held that the accused has not probablised his defence.

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When the accused admits issuance of cheque - Ex.P1 with his signature, the presumption under Sections 118

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and 139 of NI Act arises and the burden shift on the accused to rebut the presumptions. When the accused failed to probablise his defence and to rebut the presumption, he is liable for conviction.

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It is relevant to refer to the decision of the Hon'ble Apex Court in M/s Kalamani Tex and another Vs P Balasubramanian¹ , wherein, the Hon'ble Apex Court recorded its various decision including the Basalingappa (supra) and held in paragraphs 15 and 17 as under:

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"15. No doubt, and as correctly argued by Senior Counsel for the appellants, the presumptions raised under Sections 118 and Section 139 are rebuttable in nature. As held in M.S. Narayana Menon v. State of Kerala, which was relied upon in Basalingappa, a probable defence needs to be raised, which must meet the standard of “preponderance of probability”, and not mere possibility. These principles were also affirmed in Kumar Exports, wherein it was further held that a bare denial of passing of consideration would not aid the case of accused.

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17. Even if we take the arguments raised by the appellants at face value that only a blank

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1 (2021) 5 SCC 283

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cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite Bir Singh v. Mukesh Kumar, where this court held that:

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“36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.”

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(emphasis supplied)

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In view of the above, position of law is very well

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settled and the burden is on the accused to rebut the presumption under Section 139 of NI Act. Even though the standard of proof required is only a preponderance of probabilities, the accused is not successful in probablising his defence. Under such circumstances, is to be held that the complainant is successful in proving the guilt of the accused beyond reasonable doubt and therefore the accused is liable for conviction.

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I have gone through the impugned judgment of

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conviction and order of sentence passed by the Trial Court, which was confirmed by the First Appellate Court. Both the Courts have considered all the materials on record in a proper perspective and arrived at a right conclusion in convicting and sentencing the accused for the above said offence. I do not find any reason to interfere with the same. Hence, I answer the above point in the 'Negative' and proceed to pass the following:

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ORDER

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