Dismissed

Narendra Patel v. Jayantha M Uchil

Karnataka HC17 Mar 2023CRL.RP/889/2014

Case brief

AI extract

What is this about?

High Court dismissed a criminal revision petition challenging conviction for cheque dishonour under Section 138 NI Act. The court held that the accused failed to rebut the statutory presumption of debt liability, affirming the trial and appellate court's finding of no factual or legal error.

What did the court decide?

The criminal revision petition filed under Sections 397 read with 401 of Cr.P.C. was dismissed, and the impugned judgments were affirmed.

Narendra Patel Vs Jayantha M Uchil — Cheque Dishonour | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 17^TH DAY OF MARCH, 2023

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BEFORE

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THE HON’BLE MR. JUSTICE RAMACHANDRA D.HUDDAR CRIMINAL REVISION PETITION No.889/2014

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BETWEEN:

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Narendra Patel, Major, Proprietor, M/s Karthik Wood Industry, St.Anne School, Patel Compound, 4^th Cross, Neermarga, Mangalore, D.K. District - 575012.

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… Petitioner

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(By Sri G.Ravishankar Shastry, Advocate)

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AND: Jayantha M.Uchil, S/o Manjappa Uchil, Aged 74 years, R/at Flat No.F2, Attavar Palace, B.C.Road, Attavara, Mangalore, D.K.District - 575 001.

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… Respondent

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(By Smt.P.V.Kalpana Shivareddy, Advocate)

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This Criminal Revision Petition is filed under Section 397 read with Section 401 of Cr.P.C., praying to set aside the judgment dated 13.08.2014 in Criminal

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Appeal No.228/2013 passed by the court of the I Addl. District and Sessions Judge, D.K.Mangalore and also the judgment dated 28.05.2013 in C.C.No.4726/2012 passed by the court of the JMFC (IV Court) Mangalore and petitioner be acquitted from the alleged offences punishable under Section 138 of the Negotiable Instruments Act in the interest of justice. This Criminal Revision Petition having been heard and reserved on 10.02.2023, coming on for pronouncement of orders, this day, the Court made the following:

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O R D E R

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The present Criminal Revision Petition is filed by the revision petitioner-accused under Section 397 read with Section 401 of Cr.PC assailing judgment of his conviction and sentence passed by the JMFC Court, Bengaluru in CC No.4726/2012 dated 28.5.2013 affirmed by the I Addl.District and Sessions Judge, D.K.Mangaluru in Criminal Appeal No.228/2013 dated 13.8.2014.

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Parties to this revision are referred to as per their status before the trial Court.

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Brief and relevant parts leading upto this revision petition are as under:

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That complainant/respondent filed a complaint under Section 200 of Cr.PC alleging offence against accused of committing offence under Sec.138 of NI Act. He states in the complaint that he is senior citizen had come in contact with the accused as the complainant was the member of Jeernodhara Committee of Shree Bhagavathi Kshetra, Adka. As accused was acquainted with the complainant, he requested the complainant to lend a loan of Rs.2,00,000/- towards his business. Considering the request of the accused, complainant advanced a loan of Rs.2,00,000/- out of the sale proceeds of his house on 8.12.2010. Accused towards payment of the said amount, issued a cheque bearing No.119150 dated 24.11.2011 for Rs.1,00,000/- drawn on Corporation Bank, Padavu Branch, Mangaluru. He assured that on presentation of the said cheque, it will be encashed.

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When complainant presented the said cheque it was dishonoured for want of sufficient funds. Therefore, complainant got issued a statutory notice on 20.12.2011

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and called upon the accused to pay the cheque amount. The said notice was duly served upon the accused on 23.12.2011. Even after that, accused did not pay the amount. Therefore, complainant filed a complaint before the JMFC V Court alleging the aforesaid offences.

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After filing the complaint, the learned trial Court took the cognizance of the offence, recorded the sworn statement of the complainant. Thereafter, issued process against the accused person to appear before the Court. Accordingly, he appeared before the Court and was enlarged on bail.

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Substance of accusation was framed and read over to the accused in the language known to him for the offence Under Section 138 of NI Act. Accused pleaded not guilty and claimed to be tried.

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To prove the guilt of the accused, complainant entered the witness box as PW. 1 and got marked Ex.P1 to P5 on his behalf and closed his evidence. After closure of

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the complainant’s evidence, accused was questioned under Section 313 of Cr.PC so as to enable him to answer the incriminating circumstances appearing in the evidence of the complainant. He denied his complicity in the crime and did not choose to lead any defence evidence on his behalf.

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The learned trial Magistrate having heard the arguments and on perusal of the records, found the accused guilty of committing the offence under Sec.138 of NI Act and sentenced him to pay a fine of Rs.1,05,000/with default sentence and out of the fine amount, it is ordered to pay compensation of Rs.1,04,000/- to the complainant and Rs.1,000/- to be collected towards fine amount.

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This judgment of conviction and sentence was challenged by the accused before the learned I Addl.District and Sessions, D.K.Mangaluru in Crl.Appeal No.228/2013. The learned I Addl.District and Sessions Judge having secured the records of the trial court and after hearing the arguments have passed the judgment

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dated 13^th August 2014 confirming the judgment so passed in CC No.4726/2012 dated 28.5.2013 by the JMFC IV Court, D.K.Mangaluru.

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It is this judgment that has been challenged by the revision petitioner/accused on the following grounds:

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That the judgments of the trial Court is opposed to law and facts of the case. The learned trial Court and I first appellate Courts have failed to take note of rebutting the presumption under Section 118 of the NI Act. The inferences that have been drawn by the trial Court and the appellate Court are erroneous.

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It is further stated that the complainant has failed to pay the capacity of lending the loan of Rs.2,00,000/- it is stated that the loan was given in the railway station out of the sale proceeds of his house. No documents are produced to show that complainant has sold his house for Rs.20,00,000/-

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As per the say of the complainant, loan was given on 8.12.2010 whereas, cheque was issued on 24.11.2011. As

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per the admission of PW.1 there was no agreement or document to prove the transaction in between the accused and complainant. Therefore, the story of the complainant cannot be accepted. The complainant has not approached the court with clean hands. There were admissions of the complainant and it is stated by the complainant himself that accused was doing a timber business and he had taken loan of Rs.1,00,000/- only. There is reliance regarding amount of alleged loan. The signature on the postal acknowledge is not of an accused. A demand notice was not served on the accused. No offence under Section 138 of NI Act has been committed. It is further contended that towards supply of timber, a cheque was issued as a security for Rs.1,00,000/- and the same has been misused by the complainant being the Treasurer of Shree Bhagavathi Kshetra, Adka. Amongst other grounds, it is prayed to allow the revision and set aside the impugned judgments.

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After filing of this revision, this Court, vide order dated 25.4.2015, allowed I.A.I/2014 subject to deposit of Rs.25,000/- before the trial Court within six weeks from then, and suspended the order of the court below. Further, this Court ordered the petitioner to be released on bail on his executing a personal bond for a sum of Rs.10,000/with one solvent surety for the likesum to the satisfaction of the trial Court. On 13.01.2017, this revision came to be admitted. Pursuant to the notice, complainant respondent appeared through his counsel. Trial Court records are secured. Heard the arguments on both sides.

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As could be seen from the allegations made in the complaint, complainant advanced a loan of Rs.2,00,000/- to the accused on 8.12.2010. He paid the said loan amount out of the sale proceeds of his house wherein he sold his house for Rs.20 lakhs. According to the complainant, towards repayment of the loan amount on 24.11.2011, accused issued a cheque for Rs.1 lakh drawn on M/s.Corporation Bank, Padavu Branch, Managaluru. It

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is assured by the accused that on presentation, it will be encashed. When presented, the cheque was dishonoured for want of `sufficient funds’. Thereafter, within stipulated time, complainant got issued a statutory notice which was duly served on the accused. Despite service of notice accused has not paid the amount. Therefore, a complaint came to be filed by the complainant.

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These assertions/allegations are reiterated by the complainant in his evidence on oath. In support of his evidence, he relies upon Ex.P1 the cheque, Ex.P2 the memo issued by the Banker. Ex.P3, the statutory notice dated 28.12.2011 and postal receipt and acknowledgement as per Exs.P4 and P5. These documents show that on presentation of said cheque Ex.P1, it was dishonoured for want of sufficient funds as per endorsement Ex.P2. Thus, statutory notice came to be issued as per Ex.P3.

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The defence of the accused is that, accused used to supply the timber to the Shree Bhagavathi Temple,

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Adka and towards supply of the timber, he has taken Rs.1 lakh. Towards payment of the same, as a a security he has issued a cheque. To that effect, certain cross examination is directed to this PW.1. This complainant PW.1 admits that he is Treasurer of Shree Bhagavathi Kshetra, Adaka and working in the said capacity since from 2010. From 2010, he knows accused. According to him, he has sold his house situated at Adka and he has got documents for having sold the same for Rs.20 lakhs. It is suggested to PW.1 that complainant has not sold his house. Except this suggestion, there is no other suggestion about the selling of the house by the complainant. It is denied by this PW.1 towards supply of timber by way of security, two cheques were given by the accused to the complainant. But, the suggestion is flatly denied by the complainant-PW.1.

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For the first time, it is suggested that some body have signed the acknowledgement but, receipt of the statutory notice has not been denied by him. Though intensive cross examination is directed to this PW.1, but,

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nothing worth is elicited so as to disbelive his version given in the examination. It was suggested cheque so issued by way of security has been misused by the complainant but this suggestion is denied. When suggestion is denied it has no evidentiary value.

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The learned trial Court as well as the First Appellate Court have given the factual finding that there was loan transaction in between the complainant and accused and towards payment of the loan amount, accused has issued the impugned cheque Ex.p1 which came to be dishonoured for want of sufficient funds in the account of the accused. Thus, it is observed by the trial Court and first appellate Court that, evidence on record clearly establishes that the cheque was not issued for security. Though it is argued by the counsel for the accused that the loan transaction is not only proved but, the evidence of the PW.1 clinchingly establishes the loan transaction and issuance of the cheque towards the loan by the accused.

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Both the courts have considered the evidence on record and have come to the conclusion that the provision of Sec.118 are applicable so also the presumptions which are available under the said provision as well as provisions of Sec.139 of NI Act are applicable with regard to the transaction between the complainant and the accused.

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When the both the courts have given a factual finding with regard to the said loan transaction, the revisional court cannot sit as an appellate Court and interfere with such a finding of fact.

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Counsel for the complainant submits that, as issuance of cheque is admitted, then the presumption which is available under the provisions of Sec.139 of NI Act is attracted. Section 139 of the NI Act states:

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“ 139 . Presumption in favour of holder : It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability.”

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With regard to the presumption which is available under the NI Act, the Hon’ble Supreme Court of India in Birsingh vs. Mukesh Kumar (2019) 4 SCC 197 ,

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after discussing the settled line of precedents, has held:

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“33. A meaningful reading of the above provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.

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If a singed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.

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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

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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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Even the said view was reiterated by the Hon’ble Supreme Court of India in three-Judge Bench in Kalamani Tex vs. P. Balasubramanian reported (2021) 5 SCC 283. Thus, a drawer who signs a cheque and hands it over to the payee, he is presumed to be liable unless the drawer adduces evidence to rebut the presumption that the cheque has been issued towards payment of a debt or in discharge of the liability. The presumption arises under Section 139 of NI Act.

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This Section 139 of the Act mandates that it shall be presumed, unless, the contrary is proved, that, the holder of a cheque received it, in discharge, in whole or in part, of a debt, or liability. The expression `unless the contrary is proved’ indicates that the presumption under Section 139 of the Act is rebuttable. It is a reverseonus clause. The test of proportionality must guide the

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determination. In catena of judgments, the Hon’ble Supreme Court of India has held that “ in the absence of compelling justifications, reverse-onus clauses usually impose an evidentiary burden and not a pursuasive burden. It is settled position that when an accused has to rebut the presumption, the presumption under Sec.139, the standard of proof for doing so is that of preponderance of probabilities .”

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If the aforesaid principles and ratio so laid down are applied to the present facts of the case, issuance of a Cheque Ex.P1 is not denied by the accused. Dishonour of the said cheque by way of endorsement by the Bank vide Ex.P2 for want of sufficient funds and receipt of the statutory notice as per ExP3 is not denied by the accused. The defence of the issuance of said cheque is not duly proved in accordance with law. Therefore, the presumptions which are available under the provisions of NI Act and Indian Evidence Act are aptly applicable which are not rebutted by the accused. The learned trial Court

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and the first appellate Court have properly appreciated the oral and documentary evidence lead by the complainant, appreciated the cross-examination in proper perspective directed to PW.1 and based upon that, the accused was found guilty.

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I do not find any factual or legal error in arriving at such conclusion of finding of guilty of accused. Therefore, no acceptable grounds have been made out to interfere into the judgments of trial and first appellate court.

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The revision filed by the accused is devoid of any merits and is liable to be dismissed.

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Resultantly, I pass the following:

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ORDER

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The Revision petition filed by the petitioner under Sec.397 Cr.PC read with 401 of Cr.PC is dismissed.

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Judgment dated 28.05.2013 in C.C.No.4726/2012 passed by the court of the JMFC (IV Court) Mangalore and

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affirmed vide Judgment dated 13.08.2014 in Criminal Appeal No.228/2013 passed by the Court of I Addl. District and Sessions Judge, D.K.Mangalore, are affirmed.

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Send back the trial court records and the first appellate court records forthwith with a copy of the order passed in this revision.

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Sd/JUDGE

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SK/-

Narendra Patel v. Jayantha M Uchil

Case brief

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Narendra Patel v. Jayantha M Uchil

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