Allowed

Jagadeesh C K v. Pratheesh K H

Karnataka HC15 Sept 2023CRL.RP/499/2016

Case brief

AI extract

What is this about?

Income-tax Revisionist Criminal Revision. The High Court set aside convictions under Section 138 of the Negotiable Instruments Act, acquitting the accused. The bench held the complainant failed to prove a legally enforceable debt or that the cheque was signed by the accused, as the signature was disputed and no steps were taken to verify it.

What did the court decide?

Judgment of conviction and sentence set aside; petitioner acquitted; bail cancelled and liberty granted; trial court directed to return deposit.

Jagadeesh C K Vs Pratheesh K H — Cheque Dishonour | Karnataka HC (2023)

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Crl.R.P. No.499/2016

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 15^TH DAY OF SEPTEMBER, 2023

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BEFORE

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THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR CRIMINAL REVISION PETITION NO. 499/2016

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BETWEEN:

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JAGADEESH C. K. S/O. KRISHNA MURTHY AGED ABOUT 36 YEARS, R/O. TAMIL COLONY, A.K. ROAD, SANTHE MAIDANA, CHIKKAMAGALURU-577101.

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…PETITIONER

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(BY SRI. RAVINDRA B. DESHPANDE, ADVOCATE)

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AND:

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PRATHEESH K. H. S/O. HIRIYANNA GOWDA, AGED ABOUT 35 YEARS, R/O. KALLAHALLI VILLAGE, MALALUR POST, TQ AND DIST. CHIKKAMAGALURU, PIN CODE-577101.

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…RESPONDENT

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(BY SRI. SHOWRI H. R, ADVOCATE)

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THIS CRIMINAL REVISION PETITION FILED U/S. 397 R/W. 401 CR.P.C PRAYING THIS COURT TO, SET ASIDE JUDGMENT AND ORDER OR CONVICTION AND SENTENCE DATED 22.06.2015 PASSED BY THE III ADDL. CIVIL JUDGE AND JMFC AT CHIKKAMAGALURU IN C.C. NO. 39/2012 CONFIRMED BY THE JUDGMENT AND ORDER DATED 17.02.2016 PASSED BY II ADDL. S.J. CHIKKAMAGALURU IN CRL.A.NO.94/2015 AND ACQUIT THE PETITIONER OF CHARGES LEVELED AGAINT HIM.

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THIS CRIMINAL REVISION PETITION, COMING ON FOR FURTHER ARGUMENTS ON 11.08.2023 AND THE SAME HAVING

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Crl.R.P. No.499/2016

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BEEN HEARD AND RESERVED FOR PRONOUNCEMENT OF ORDER, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner has assailed the judgment of

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conviction and sentence passed against him by the III Addl. Civil Judge and JMFC, Chikmagalur, in C.C.No.39/2012 dated 22.06.2015 which is affirmed by the II Addl. Sessions Judge, Chikmagalur, in Crl.A.No.94/2015 dated 17.02.2016 by filing this revision petition under Sections 397 and 401 of Cr.P.C.

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The petitioner was an accused and respondent

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was complainant before the trial Court. For the purpose of convenience, they are referred to as per their rank before the trial Court.

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The complainant filed a private complaint under Section 200 of Cr.P.C. alleging that, towards payment of

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purchase of ginger from him accused issued a cheque bearing No.947830 dated 21.03.2011 for Rs.84,000/-

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drawn on ICICI Bank Limited, Shivamogga branch. Complainant presented the said cheque initially on

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23.03.2011 through his banker M/s. Corporation Bank,

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Chikmagalur. It was returned un-encashed. Thereafter as per the request of the accused, he re-presented the same through his banker. But, the said cheque was dishonoured as per the endorsement dated 03.05.2011 with an endorsement “funds insufficient” and “drawer’s signature incomplete/differs”. Even thereafter, after intimating the accused to pay the cheque amount, he did not pay the same. Therefore, complainant had issued legal notice on 20.05.2011 by registered post but it was returned with an endorsement dated 15.06.2011 as ‘not claimed’, returned to sender. As accused has committed the offence punishable under Section 138 of the Negotiable Instruments Act (for short ‘the Act), therefore complainant filed the complaint before the trial Court.

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The learned Magistrate has followed all the formalities of private complaint as contemplated under Section 200 of CrP.C.

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To prove the guilt of the accused, complainant himself entered the witness box as PW-1 and got marked

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Ex.P.1 to Ex.P.5 and closed his evidence. To rebut the evidence of the complainant, accused himself entered the witness box as DW-1 and got marked Ex.D.1 to Ex.D.3 and closed his evidence. Both PW-1 and DW-1 are thoroughly cross-examined.

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The learned trial Court after hearing the arguments and on perusal of the records found the accused guilty of the offence punishable under Section 138 of the Act and sentenced him to pay a fine of Rs.1,000/and in default of payment of fine, accused was directed to undergo simple imprisonment for a period of one year. The trial Court also directed the accused to pay a sum of Rs.92,400/- as compensation within three months from the date of order and in default of payment of the same, accused was ordered to undergo further simple imprisonment for one year.

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This judgment of conviction and sentence passed by the trial Court was challenged by the accused before the II Addl. Sessions Judge, Chikmagalur in Crl.A.No.94/2015. The learned Sessions Judge on

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securing the records and on hearing the arguments affirmed the judgment of conviction and sentence passed by the trial Court. This is how the revision petitioner is before this Court challenging both the judgments.

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Sri Ravindra B. Deshpande, learned counsel for the petitioner/accused with all force would submit that complainant is not known to the accused. There was no any transaction in between the accused and the complainant. He never purchased ginger worth Rs.84,000/- as alleged by the complainant. He would submit that, when the accused had been to a canteen along with two cheque leaves, kept in a diary, while coming from the canteen, he forgot to bring it. Thereafter, after noticing the same, he went to the canteen but he could not get his diary containing two cheque leaves. Immediately he went to his banker and submitted a letter stating that, he has lost his two cheque leaves and they may be misused by the person who had

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taken the said diary and cheque leaves. He requested the banker not to honour or encash the said cheques. He

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further submits that, the complainant having got the said cheque leaf has misused the same by creating a transaction in between himself and accused. Thus, according to him, no offence under Section 138 of the Act was committed by him as there was no legally enforceable debt to the complainant by him. In support of his evidence, he relied upon various evidence spoken to by PW-1 and the documents so produced by him. He prays to allow the revision petition and dismiss the complaint of

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the complainant.

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As against this submission, the learned counsel for the respondent/complainant would submit that, there was a transaction of purchase of ginger from him by the accused. Towards the sale consideration, accused has issued the cheque. On request of the accused, when the cheque was presented for the second time, it was dishonoured for want of sufficient funds and mismatch of the signature of the accused. Therefore, offence under

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Section 138 of the Act is complete. His evidence clinchingly establishes the guilt of the accused. He further

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submits that, the learned trial Court as well as the first

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Appellate Court have rightly come to the conclusion and have found the accused guilty. These factual findings of both the Courts below cannot be interfered in this revision petition. He further submits that, the accused has taken a false defence which cannot be accepted at any stretch of imagination. Therefore, he prays to dismiss this revision petition.

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Having given my anxious consideration to the materials placed on record and the arguments advanced by both the side, the following points arise for

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consideration:

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a. Whether the learned trial Court and first Appellate Court have committed any illegality

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or perversity in finding the accused guilty as there was no business transaction between

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the accused and the complainant of purchase of ginger from the complainant as contended by the accused?

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b. What order?

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So far as offence under Section 138 of the Act

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is concerned, it is the bounden duty of the complainant to prove the offence with legal and factual evidence. He has to comply the provisions of the Act. Following are the strict provisions of the Act with regard to the proof of offence under Section 138 of the Act.

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a. a cheque drawn for the payment of any amount of money to another person,

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b. the cheque is drawn for the discharge of the ‘whole or part’ of any debt or other liability.’ Debt or other liability’ means legally enforceable debt or other liability and

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c. the cheque is returned by the bank unpaid because of insufficient funds.

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12. PW-1 has stated in line with the contents of the

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complaint in his evidence on oath. In support of his evidence, he relies on Ex.P.1, the so-called alleged cheque

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dated 21.03.2011 drawn on ICICI Bank Limited, Shivamogga branch, for Rs.84,000/-. Name of the complainant is mentioned as a drawee. Ex.P.2 is an endorsement dated 03.05.2011 issued to the complainant by his banker stating that funds insufficient and drawer’s

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signature incomplete/differs. In view of the dishonour of

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the said cheque, accused has issued a legal notice on 28.05.2011 within the stipulated time as contemplated under the provisions of the Act. The said notice is marked Ex.P.3. Ex.P.4 is the returned postal cover. Relying on these documents, it is submitted that there is compliance of the provisions of Section 138 of the Act.

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PW-1 in the cross-examination stated that, he

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is a graduate in LLB. He has stated that, in the said notice he has not mentioned about the quantity of the ginger sold to the accused. For the first time, he has stated in the cross-examination that, he sold 60 kgs of ginger in 42 bags. He had no difficulty to mention the same in the notice. Further, he has stated that he knows the accused for the last 8 to 10 years. He had not produced any documents to show that he had grown ginger in his landed property. He had no difficulty to produce the documents for having sold the ginger. According to him, on 20.02.2011, he sold ginger to the accused. At that time, the said ginger was valuing to Rs.2,000/- per K.G. He had

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sold 60 kgs. of ginger. According to him, he had sold the said ginger near his landed property situated at Maladur village and accused transported the said ginger in Tata Ace vehicle. According to him, accused was his classmate when he was studying in degree classes. He has not produced any receipt for having purchased the ginger seeds. He has denied all other suggestions.

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On reading the evidence of PW-1, in the complaint, he has simply stated that, he has sold the ginger to the accused. He has deposed that, he sold the ginger near his landed property itself. To show that, he has really grown the ginger in the landed property situated at Maladur village, except his self serving testimony there is no other evidence. It is the specific evidence spoken in the cross-examination that, accused transported the said ginger in Tata Ace vehicle.

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When there is a denial of purchase of the ginger

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by the accused from the complainant, to prove that, really he has sold the same, the complainant has to adduce acceptable evidence. He has not examined the driver or

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the owner of the said Tata Ace vehicle to show that, really accused has transported the ginger having purchased the same from the complainant.

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When he has stated that, accused was his

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classmate and both knew each other, he has to produce certain documents for having studied together. There is specific denial by the accused about such a relationship. Further, he has not mentioned or stated about the purchase of the ginger seeds to show that, he has really grown the ginger crop. These are all the factual lacunas with regard to the relationship pointed out by the learned counsel for the accused in the course of his arguments.

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When the cheque was dishonoured for want of

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sufficient funds and mismatch of the signature of the accused, no steps have been taken by the complainant requesting the accused to rectify his signature or there was no request to issue a fresh cheque. There is no such evidence at all brought on record by the complainant. Even there is no pleading to that effect in the complaint. Therefore, in a case of present nature, the heavy burden is

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on the complainant to prove his case of issuance of a cheque by the accused towards legally enforceable debt. Except the self serving evidence of PW-1 coupled with 2-3 documents produced by him, there is no other evidence. The lacunas pointed out by the accused have not been satisfied by the complainant by adducing acceptable evidence.

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To rebut the evidence of complainant, accused

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has come before the trial Court and deposed that, complainant is a stranger to him. He specifically states that, in the diary owned by him, he had kept the death certificate of his mother and the pass book. He has also kept two cheque leaves drawn on ICICI bank bearing Nos.947829 and 947830 in the said diary. He had gone to Shobha canteen along with his diary. There he forgot to take his diary with him while coming outside from the said canteen. It is stated that, when he went back to get the diary to the said canteen, he could not get it. Thereafter,

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he went to his banker and informed that, he has lost two cheques and requested the banker not to honour the said

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cheques. To that effect, the banker has given an endorsement which is marked Ex.D.1. At the time of marking the said document, no little finger was raised by the complainant. It is his further evidence that, one Chandrashekhar presented cheque No.947829 to the Corporation Bank account for encashment. He met the said Chandrakshekhar and it was informed that, the said cheque was given to one Ratish. Even the cheque presented by Chandrashekhar was not encashed and the said Chandrashekar has returned the cheque to him. He has not done any transaction with regard to the ginger with the complainant or even with others. He was crossexamined at length. He has specifically stated in his cross examination that, with regard to losing of cheque book, he has not filed any complaint with the police. He has given an explanation that, as he has lodged a complaint before the banker, he did not file complaint with the police. In between 11.00 a.m. and 11.30 a.m. he had been to Shobha canteen with his diary containing two cheques and death certificate of his mother. When he visited the police, it was informed to him that, on payment of Rs.15/-

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he will get a death certificate. He admits that, he is having a bank account with ICICI Bank, M.G. Road Branch. He further states that, initially he was having a bank account with ICICI Bank, Shivamogga branch but when he gave evidence he was not having any account with the said branch. He states that, the said cheques were transmitted to his banker during 2009-2010. He has studied upto BA and he knows about the cheque transactions. Except this evidence, there is no other evidence brought on record by the accused by directing effective cross-examination.

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When accused denies his signature on the said cheque and when bank has issued an endorsement of “difference in signature” of the accused, the burden is on the complainant to prove that, the said signature belongs to the accused. When the signature is disputed, the complainant has to take proper steps to prove that, he has put all the efforts to rectify the signature of the accused or would have taken steps to get a fresh cheque from the accused. No doubt, difference in the signature of the

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drawer of the cheque also sometimes attracts provisions of Section 138 of the Act. It depends upon the facts of each case.

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The evidence adduced by the accused shows

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that, he submitted a letter/complaint to his banker on 10.03.2011. According to his evidence, he lost his diary containing cheques in between 09.03.2011 and 10.03.2011. Immediately, on 10.03.2011, he submitted a complaint through his banker mentioning the cheque leaves with number which he lost and requested the banker not to honour the said cheques. The bank has received the said complaint on 10.03.2011 itself.

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The said cheque bears the date as 21.03.2011 i.e., after submission of Ex.D.1 on 10.03.2011. The bank has issued endorsement on 03.05.2011. So this itself shows that, immediately after losing the said cheque leaves, accused has taken steps to inform his banker not to honour the cheques.

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It is his evidence that, the said cheque bearing No.947829 was also presented but the payment was stopped. The bank statement of the accused marked at Ex.D.2 shows that, one Chandrashekhar had presented the same and his bank account also shows that the cheque so presented by him through his banker on 03.05.2011 was returned as ‘insufficient funds’. This itself establish that accused has lost the cheques and immediately he informed his banker not to honour the cheques.

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It is the further case of the complainant that, he had grown ginger in his landed property. The same was sold to the extent of 60 kgs. to the accused. But, it is the defence of the accused that, the landed property so stated by the complainant is standing in the name of father of the complainant Hiriyanna Gowda as per Ex.D.3 and Ex.D.4 and Ex.D.5 standing in the name of the complainant. These exhibits D.3 to D.5 are the RTC extracts and in column No.12(9) of these RTC extracts, the crop so grown in the respective landed properties is shown as “paddy and potato”. Thus, there is no evidence

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adduced by the complainant to show that, he had really grown the ginger in the landed property. Thus, the evidence brought on record by the complainant cannot be accepted that he had sold ginger to the accused and towards sale consideration amount, accused has issued the cheque.

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Even during the course of 313 statement, it was the statement of the accused that, the cheque lost by him was misused by the complainant. This defence of the accused is corroborated by his evidence. No effective cross-examination is directed to DW-1 to disbelieve his version given in the examination-in-chief.

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So far as offence under Section 138 of the Act is concerned, it is complete only when the ingredients of the offence stated supra are complete. So to say, when a cheque is drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge of any debt, is returned by the bank unpaid either because the amount of money standing to the credit of that

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account is insufficient to honour a cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank. At first blush, it appears that, it is only in two situations that Section 138 of the Act is attracted; firstly, when there are insufficient funds available in the bank account of a person who is drawing a cheque and secondly, where it exceeds the arrangement. However, the provision has been interpreted by the Hon’ble Apex Court in a number of judgments in a manner so as to include within its ambit even in the cases where the dishonour of cheque has taken place for the reasons other than the aforesaid two reasons. The Hon’ble Apex Court in the case of LAXMI DYECHEM VS. STATE OF GUJARAT AND OTHERS¹ has categorically held that, “ even if there is a mismatch between signature on the cheque drawn and specimen available with the bank also invites the provisions of Section 138 of the Act. Thus, protection was very well available ”. But, however the protection also was available to a bonafide drawer to

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1 (2012) 13 SCC 375

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prove his defence. It is held in the said judgment that

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‘ such a dishonour to qualify for prosecution under

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Section 138 shall have to be preceded by a statutory notice where drawer is called upon and has opportunity to arrange payment of the amount covered by the cheque. It is only when the drawer despite receipt of such a notice and opportunity to make the payment within the time stipulated under the statute does not pay the amount, that it would

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be considered a dishonour constituting an offence, hence punishable’. It is further held that, even in such cases, the question whether or not there was a lawfully recoverable debt or liability for discharge would be a matter that the trial Court will examine keeping in view the statutory presumption that unless rebutted the cheque is presumed to have been issued for a valid consideration .”

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In this case, as stated supra, on losing the cheque leaves immediately accused informed the banker about the fact of losing the cheque and requested the

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banker not to honour the cheques. After 10 or 11 days of submitting such a letter to the banker, complainant presented the said cheque, as per his evidence. At that time, the cheque was returned with an endorsement ‘signature differs’ and there is no sufficient funds in the account. There was no initial issuance of the notice by the complainant as per his pleadings when for the first time the cheque was returned. Thereafter, as per the pleadings after presentation of the cheque for the second time, on receipt of the endorsement, he issued a notice but it was not claimed by the accused.

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When accused is disputing the very issuance of the cheque in discharge of the legally enforceable debt to the complainant and when the signature differs, the burden is on the complainant to prove that the signatures so found on Ex.P.1 cheque belongs to the accused. As the signature is disputed, no steps have been taken by the complainant to get it rectified or to get a cheque afresh.

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Simply, he filed a complaint. Even to prove the signature of the accused on the cheque Ex.P.1, no legal steps were

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taken by the complainant to compare the signature of the accused with admitted and disputed signatures. This is serious lacuna in the case of the complainant.

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A perusal of the entire records and even in the

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statutory notice sent by the complainant, there are no clear terms being used by the complainant that towards legally enforceable debt accused has issued the cheque in discharge of the debt. It is to be noted that, the cheque was returned for the reason that the signature of the drawer differs. As per the defence of the accused, complainant is a stranger to him and there was no transaction in between complainant and himself. When the cheque was returned for the reason that the signature differs, and the accused has taken a stand that the complainant is a stranger to him, it is for the complainant to establish the case that accused was known to him and there was a transaction of selling of ginger to him. But in this case complainant has failed to establish his case with

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acceptable evidence. If once, execution of cheque is proved, as stated supra, the presumption under Sections

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118 and 139 of the Act can be drawn and the accused has

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to rebut the presumption that there is no legally enforceable debt. Whereas in present case, accused has not issued cheque for legally enforceable debt and complainant has not established the execution of the cheque and selling of ginger to the accused.

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On reading the entire materials, the learned trial Court as well as the first Appellate Court being the fact finding Courts have wrongly appreciated the facts of the case and have wrongly drawn the presumptions available under Sections 118 and 139 of the Act. Such a finding of drawing presumption is erroneous. So therefore, if all these factual features coupled with the position of law is put together, the complainant has failed to prove his case with legal evidence of committing offence under Section 138 of the Act in the manner alleged in the complaint. Both the courts have committed error in arriving at a conclusion that accused has committed the offence under Section 138 of the Act.

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Hence, revision petition filed by the accused succeeds and

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deserves to be allowed.

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30. Resultantly, the following:

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ORDER

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i) Revision petition filed by the petitioner/accused under Sections 397 and 401 of Cr.P.C. is allowed,

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ii) The judgment of conviction and sentence passed in C.C.No.39/2012 vide order dated 22.06.2015 by the III Addl. Civil Judge and JMFC, Chikmagalur which is confirmed by the II Addl. Sessions Judge, Chikmagalur, in Crl.A.No.94/2015 vide order dated 17.02.2016 are set aside,

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iii) Consequentially, accused is acquitted of the charge under Section 138 of the Act. His bail bonds stand cancelled and he is set at liberty.

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iv) Learned trial Court is directed to return the deposit amount, if deposited by the accused to him digitally after collecting necessary documents of identification and proof.

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Registry is directed to intimate the final order to the

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trial Court as well as to the II Addl. Sessions Judge, Chikmagalur, by mail forthwith and transmit the trial Court records and Sessions Court records along with a copy of

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this judgment.

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Sd/JUDGE

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Jm/-

Jagadeesh C K v. Pratheesh K H

Case brief

What is this about?

What did the court decide?

Jagadeesh C K v. Pratheesh K H

Case brief

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What did the court decide?

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