Allowed

Sri.Chikkanna@Prem v. Srinivasa

Karnataka HC11 Aug 2023CRL.RP/1252/2019

Case brief

AI extract

What is this about?

This revision petition challenged the conviction under Section 138 NI Act for a bounced cheque. The High Court held that the complainant failed to prove he could advance the alleged loan of Rs. 3 Lakhs, especially given his admitted involvement in unregistered money lending, and accordingly allowed the petition, quashing the conviction.

What did the court decide?

Revision petition allowed; conviction and sentence set aside; accused acquitted; bail bonds cancelled; amount refunded.

Sri.Chikkanna@Prem Vs Srinivasa — Cheque Dishonour | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 11^TH DAY OF AUGUST, 2023

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BEFORE

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THE HON’BLE MR. JUSTICE RAJENDRA BADAMIKAR

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CRIMINAL REVISION PETITION NO.1252 OF 2019

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BETWEEN:

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SRI. CHIKKANNA @ PREM S/O SRI. GANGAPPA, AGED ABOUT 37 YEARS, H.Q. CREATIVE WORKS, NO.7/13, 8^TH MAIN ROAD, ‘B’ BLOCK, WARD NO.122, K.P. AGRAHARA, BENGALURU-560 023, R/AT NO.823, ‘NANDA DEEPA’, 6^TH CROSS, 4^TH MAIN ROAD, M.C. LAYOUT, VIJAYANAGAR, BENGALURU-560 4040.

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….PETITIONER

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(BY SRI. VISHWANATH R. HEGDE, ADVOCATE)

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AND:

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SRINIVASA S/O LATE MUNIKRISHNAPPA, AGED ABOUT 45 YEARS, RESIDING AT NO.9/1, ‘B’ STREET, 10^TH CROSS, MAGADI ROAD, BENGALURU-560 023

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...RESPONDENT

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(BY SRI. CHANDRAPPA .K.N, ADVOCATE)

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THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W 401 OF CR.P.C PARYING TO SET ASIDE

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THE JUDGMENT DATED 30.08.2019 IN CRL.A.NO.2110/2018 ON THE FILE OF THE LII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT BENGALURU AND THE JUDGMENT DATED 22.09.2018 IN C.C.NO.15892/2017 ON THE FILE OF THE LEARNED JUDGE, COURT OF SMALL CAUSE(SCCH-9) AND XXVI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE AT BENGALURU PASSED BY THE COURT BELOW AND DISMISS THE COMPLAINT FILED BY THE RESPONDENT.

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THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 03.08.2023, COMING ON FOR ‘PRONOUNCEMENT OF ORDER’ THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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This revision petition is filed by the accused

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under Section 397 r/w. 401 of Cr.P.C. challenging judgment of conviction and order of sentence dated 22.09.2018 passed by the Court of Small Causes and XXVI

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ACMM, Bengaluru, in CC No.15892/2017 and confirmed by the LII Additional City and Sessions Judge, Bengaluru, in Criminal Appeal No.2110/2018 vide judgment dated 30.08.2019.

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

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The brief factual matrix leading to the case are

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that, the complainant-Sri. Srinivasa and accused-Sri.

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Chikkanna are neighbourers. The accused approached the complainant during the 4^th week of September 2016 seeking financial assistance of Rs.3.00 Lakhs for his urgent personal requirements and in that regard, the accused issued a post-dated cheque for Rs.3.00 Lakhs and when the complainant presented the said cheque for encashment, it was bounced for ‘Insufficient Funds’. The complainant then got issued a legal notice, which is served on the accused. The accused did not respond to the legal notice. Hence, the complainant lodged a complaint.

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On the basis of the complaint, the learned Magistrate has taken cognizance and issued process against the accused. The accused appeared through his counsel and was enlarged on bail. He has also denied the accusation.

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Before the trial Court, the complainant was examined as PW.1 and he placed reliance on Nine

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documents marked at Exs.P1 to P9. After conclusion of the evidence of the complainant, the statement of accused under Section 313 of Cr.P.C. was recorded to enable the accused to explain the incriminating evidence appearing against him in the case of complainant. The case of accused is of total denial. The accused himself has got examined as DW.1 and he has also placed reliance on Exs.D1 to D4.

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Having heard the arguments and after

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appreciating the oral and documentary evidence, the learned Magistrate has convicted the accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 ( ‘N.I. Act’ for short) by imposing fine of Rs.3,30,000/- with default clause of six months of Simple Imprisonment. Being aggrieved by this judgment of conviction and order of sentence, the accused has filed an appeal on the file of the LII City Civil and Sessions Judge, Bengaluru, in Crl.A. No.2110/2018. The learned Sessions Judge after re-appreciating the oral and documentary evidence, has dismissed the appeal by confirming the

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judgment of conviction and order of sentence. Being aggrieved by these concurrent findings, the petitioner is before this Court by way of this revision petition.

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Heard arguments advanced by the learned

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counsel for the petitioner and the learned counsel for the respondent. Perused the records.

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Learned counsel for the revision

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petitioner/accused would contend that the complainant has not pleaded as to how and on which date the loan was advanced and in the evidence, it is asserted that, it was paid on 24.09.2016. He would contend that, since the accused has disputed the financial status of the complainant to advance such a huge amount and considering his crossexamination, it is evident that the complainant has no financial capacity to advance the such a huge loan and the defence raised by the accused becomes more probable. He would also contend that, Ex.P9 (Statement of Account) does

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not assist, as it is not pertaining to the alleged date of advancement of loan and the source of funds is not

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disclosed by the complainant Hence, he would contend that the defence of the accused is more probable regarding availment of loan of Rs.15,000/- and Rs.35,000/-, and hence he would contend that, both the courts below have not properly appreciated the oral and documentary evidence in proper perspective. Hence, he would contend that the revision needs to be allowed by setting aside the impugned judgment of conviction by both the Courts below.

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Per contra, the learned counsel for respondent/complainant asserts that, the accused has taken a specific defence regarding availment of loan of Rs.35,000/- and Rs.15,000/- and repayment of the same. According to him, the cheque was issued as security for the said loan transactions. In that event, he could have issued an intimation to the Bank for stop payment, which he has not done. He would also deny that the complainant was doing money lending business. He would also contend that the documents relied by the accused would not assist him and hence, he disputed the claim and sought for dismissal of the revision petition.

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10. Having heard the arguments and after perusing

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the records, now the following point would arise for my consideration:-

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“Whether the impugned judgment of conviction and order of sentence passed by the trial Court and confirmed by the First Appellate Court are perverse, arbitrary and illegal so as to call for any interference by this Court?”

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11. It is the specific contention of the complainant

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that, he is well-conversant with the accused and in the 2^nd week of September 2016, the accused has approached him for advancement of loan of Rs.03.00 Lakhs and on 24.09.2016, he advanced a sum of Rs.03.00 Lakhs in cash and in discharge of the said debt, the cheque under Ex.P1 came to be issued, which was returned for Insufficient Funds, when presented. There is no dispute of the fact that Ex.P1-Cheque belongs to the accused and it bears his signature. Hence, the initial presumption under Section 139 of the N.I. Act is in favour of complainant, that the cheque was issued towards legally enforceable debt. It is for the

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accused to rebut the said presumption on the basis of the preponderance of probabilities.

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The complainant was examined as PW.1 and in

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his examination-in-chief, he has reiterated the complaint allegations. In the cross-examination, the complainant admitted that, he is an employee of BEL and also admits that the salary would be credited to his account. He also admits that, he availed cheque book facility and he is an income-tax assessee. He also admits that he has not shown the source and mode payment of Rs.3.00 Lakhs to the accused in his income-tax returns. He further admits that there are no documents to show that as on 24.09.2016 he had sufficient bank balance in his account. He undertakes to produce the bank statement pertaining to the relevant period.

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In further cross-examination, he has also

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admitted that he has also advanced loan to one Sri. T.G.

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Rajashekar and he lodged a complaint against him for cheque bounce in CC No.22175/2016 as per Ex.D1. He has

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also admitted that, he has given evidence as per Ex.D2. In the further cross-examination, he admitted that, the accused was doing carpentry piece work job. It is suggested to the complainant that, in September 2016, he

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was not possessing sufficient balance in his account to advance loan of Rs.3.00 Lakhs, but he denied the said suggestion. He placed reliance on Ex.P9. But, on perusal of Ex.P9 it is evident that, it is a bank statement for the period from 05.06.2016 to 10.06.2016 and it is not pertaining to the period of September, 2016.

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14. Learned counsel for the respondent tried to

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impress upon the Court that, from Ex.P9 it is evident that the complainant has withdrawn Rs.4,00,000/on 08.06.2016 and the same was with him and he paid it to the accused in 4^th week. If that is the case, when there was demand in 2^nd week, he could have paid it then only. But, he paid it in 4^th week and no explanation is forthcoming in this regard. It is hard to accept that the complainant has

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presumed regarding demand from accused in June itself and withdrawn the said amount. He did not explain as to

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why he has not obtained the statement for the month of September, 2016 from the Bank.

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It is the defence of the accused that, in 2008 he availed hand loan of Rs.15,000/- and Rs.35,000/- from the complainant i.e., totally to the tune of Rs.50,000/- and at that time, he had issued the cheque and he repaid the said amount. But, no documents are forthcoming to substantiate the said contention. But, at the same time, the presumption under Section 139 of N.I. Act cannot be made available when the financial status of the complainant itself is disputed and complainant is required to prove his financial status.

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The complainant has not produced any piece of document to show that, in the month of September 2016, he was possessing huge amount of Rs.3.00 Lakhs. Ex.P9 does not assist the complainant in this regard, as there is no question of he imagining demand by the accused in September, 2016. If he had money, he could have paid it in the 2^nd week of September itself when the demand was

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made. But, that was not done. Exs. D1 and D2 disclose that the complainant is doing money lending business as Ex.D1 discloses that he has advanced loan of Rs.8.00 Lakhs to one Rajashekar T.G. Ex.D2 is the evidence of the complainant made in the said case and this amount said to have been advanced in July 2014. It is hard to accept the conduct of the complainant regarding he advancing hand loan in huge quantity without charging any interest. This conduct definitely creates doubt regarding the genuineness of case of complainant. The complainant has not explained about the source of income and that was not pleaded in the complaint.

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Looking to the above facts and circumstances and considering the fact that the complainant has failed to prove his financial status, the presumption under Section 139 cannot be made applicable in favour of the complainant. On the contrary, the defence raised by the accused regarding he availing loan to the tune of Rs.50,000/- and issuing cheque as security, appears to be more probable, in view of the fact that the complainant is

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doing money lending business, which is evident from Exs.D1 & D2. The records disclose that the complainant is doing illegal money lending business and under the guise of money lending, he is obtaining cheques. In that context, the learned counsel for the revision petitioner has placed reliance on a decision reported in (2019) 5 SCC 418 [Basalingappa Vs. Mudibasppa], wherein the Apex Court has observed as under:-

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“B. Debt, Financial and Monetary Laws – Negotiable Instruments Act, 1881 – Ss. 139 and 138 – Rebuttal of presumption under S. 139 – If made out – Accused disputing financial capacity of complainant to pay amount and leading evidence to prove it – Held, accused led probable defence – Under such conditions, burden would be on complainant to establish his financial capacity, which he was unable to do – Hence, acquittal restored.”

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In the instant case also, the accused has disputed the financial status of the complainant. The accused is admittedly BEL employee and he had no source of income except salary. He claims to be an income-tax

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assesse. But, no documents were produced in that regard. But, he admitted that, the amount of Rs.3.00 Lakhs is not shown in income tax returns. On the contrary, Exs.D1 and D2 disclose that he is doing money lending transactions illegally. Hence, the presumption stands rebutted and the defence raised by the accused is more probable rather than the case of the complainant. The principles enunciated by the Apex Court in the case of Basalingappa cited supra are directly applicable to the facts and circumstances of the case in hand.

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19. Both the Courts below have failed to appreciate

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the oral and documentary evidence led by the parties in proper prospective and further failed to analise the admissions given by the complainant regarding his financial status. Both the Courts below, only on the ground of cheque and signature are being admitted, they proceeded to convict the accused. But the conduct of the complainant was not at all considered and Exs.D1 and D2 were not

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properly appreciated. Hence, the entire approach of both the Courts below is arbitrary and perverse, which has

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resulted in miscarriage of justice, as it establishes that cheque in question is not issued towards legally enforceable debt.

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20. Considering the above facts and circumstances,

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the judgment of conviction and order of sentence passed by

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both the Courts below are perverse, arbitrary and illegal and they call for interference of this Court. As such, the point under consideration is answered in the affirmative. In view of the same, the revision petition needs to be allowed

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and accordingly, I proceed to pass the following:

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ORDER

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i) The Revision Petition is allowed .

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ii) The impugned judgment of conviction and order of sentence dated 22.09.2018 passed by the Court of Small Causes and XXVI ACMM, Bengaluru, in CC No.15892/2017 and confirmed by the LII Additional City and Sessions Judge, Bengaluru, in Criminal Appeal No.2110/2018 vide judgment dated 30.08.2019, are set aside.

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iii) The accused stands acquitted of the charge for the offence under Section 138 of the N.I Act.

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iv) The bail bonds executed by the accused stand cancelled.

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iv) The amount if any deposited by the accused/revision petitioner before the Courts shall be refunded to him.

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Sd/- JUDGE

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KGR*

Sri.Chikkanna@Prem v. Srinivasa

Case brief

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Sri.Chikkanna@Prem v. Srinivasa

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