Allowed

Mr Deepak D Monterio v. Mr Ronald D Souza

Karnataka HC19 Mar 2024CRL.A/797/2014

Case brief

AI extract

What is this about?

Complainant appealed against the Sessions Court's acquittal of the accused for cheque dishonour under Section 138 NI Act. Holding the accused took mutually conflicting defences and failed to rebut presumption, the High Court found the Sessions judgment perverse, set it aside and restored the trial Court's conviction and sentence.

What did the court decide?

Appeal allowed; Sessions Court acquittal set aside; trial Court's conviction and sentence restored, to be executed.

Mr Deepak D Monterio Vs Mr Ronald D Souza — Cheque Dishonour | Karnataka HC (2024)

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CRL.A No. 797 of 2014 NC: 2024:KHC:11224

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 19^TH DAY OF MARCH, 2024

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BEFORE

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THE HON'BLE MS JUSTICE J.M.KHAZI

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CRIMINAL APPEAL NO.797 OF 2014

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BETWEEN:

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MR. DEEPAK D MONTERIO S/O LATE GILBERT MONTERIO AGED ABOUT 46 YEARS R/O MUDU, JEPPU HOUSE POST ULALBETTU GURUPURA, MANGALURU TALUK D K DISTRICT - 574 145

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…APPELLANT

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(BY SRI. A SHIVARAMA, ADVOCATE)

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AND:

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Digitally signed by REKHA R Location: High Court of Karnataka

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MR RONALD D'SOUZA S/O LATE JON D'SOUZA AGED ABOUT 45 YEARS R/O TWINKLE STAR COMPLEX OPP. SRA CONVENT, VAMANJOOR POST MANGALURU - 574 508 D K DISTRICT

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…RESPONDENT

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(BY SRI. ABHISHEK MARLA, ADVOCATE)

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THIS CRL.A IS FILED UNDER SECTION 378(4) OF CR.P.C PRAYING TO a) SET ASIDE THE ORDER DATED 02.09.2014 IN CRL.A NO.293/2008 ORDER PASSED BY THE VI HON'BLE COURT OF THE DISTRICT AND SESSIONS JUDGE, MANGALURU AND CONFIRM ORDER OF THE V J.M.F.C DATED 05.08.2008; b) ALLOW THE APPEAL AS PRAYED FOR AND c) GRANT SUCH OTHER RELIEF/S AS THIS HON'BLE COURT DEEMS FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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CRL.A No. 797 of 2014 NC: 2024:KHC:11224

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JUDGMENT

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This appeal is by the complainant challenging the acquittal of respondent/accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short 'N.I. Act'), by the Sessions Court, by reversing the conviction imposed by the trial Court.

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For the sake of convenience, parties are

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referred to by their rank before the trial Court.

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It is the case of complainant that he and accused are co-brothers having married sisters. Complainant is a Seaman working in a Merchant Ship. In the first week of August 2004, accused requested the complainant for a hand loan of Rs.7 lakhs to meet his urgent financial commitments. Complainant agreed for the same. In the month of August 2004, complainant arranged payment of Rs.5 lakhs to the accused through his sisterin-law. In the month of November 2004, he paid Rs.1,31,000/- to the accused through his brother Ronald Monterio. Remaining Rs.69,000/- was paid by the

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complainant to the accused in the month of November 2004. All these payments were made through cheques. Accused promised to repay the same with interest before the end of December 2005.

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3.1 However, accused failed to repay the hand loan. Upon persistent request and demand, accused issued cheque dated 29.12.2006 for a sum of Rs.9,38,082/towards principle of Rs.7 lakhs and interest in a sum of Rs.2,38,082/-. He assured due payment on presentation. However, when complainant presented the cheque for encashment, it was dishonoured with endorsement "insufficient funds".

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3.2 Complainant got issued legal notice dated 04.01.2007. It is duly served on the accused on 06.01.2007. Instead of paying the amount due under the cheque, with an intention to evade payment, accused has sent an evasive reply, referring to some dealings which are totally false and unconnected with the present transaction and hence the complaint.

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After due service of summons, accused

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appeared before the trial Court and contested the case by pleading not guilty.

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In order to prove the allegations against

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accused, complainant has examined himself as PW-1 and his brother Ronald Monterio as PW-2. He has relied upon Ex.P1 to 9.

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During the course of his statement under Section 313 Cr.P.C, accused has denied the incriminating evidence led by the complainant.

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On the other hand, accused has examined himself as DW-1, Manager of the drawer bank as DW-2 and one Yathiraj Shetty as DW-3. He has relied upon Ex.D1 to 6.

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The trial Court accepted the contention of the

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complainant and convicted the accused and sentenced him

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to pay fine of Rs.10 lakhs, in default to undergo simple imprisonment for six months. The entire fine amount is

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ordered to be paid to the complainant by way of compensation.

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Aggrieved by his conviction and sentence,

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accused approached the Sessions Court in appeal. Vide the impugned judgment and order, the Sessions Court allowed the appeal and acquitted the accused.

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Challenging the acquittal of accused,

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complainant has filed this appeal, contending that the impugned judgment and order of the Sessions Court is not maintainable either in law or on facts and liable to be set aside. Since the accused has allowed the dishounour of cheque by not maintaining balance in his account, he has committed the offence punishable under Section 138 of N.I. Act. Rightly the trial Court convicted and sentenced him. However, the Sessions Court has set aside the same.

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The order of the Sessions Court is illegal, vague and without application of mind. Without going through the oral and documentary evidence placed on record and the

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judgment and order of the trial Court, the Sessions Court

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has acquitted the accused.

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10.1 The observation of the Sessions Court at para No.14 that complainant did not give any amount to the brother and sister-in-law of complainant is contrary to the facts and circumstances and admissions given by the accused. The Sessions Court has erred in reversing the findings of the well reasoned judgment and order of the trial Court. Having admitted receipt of the loan amount, the accused has failed to prove discharge and in the circumstances, the Sessions Court has erred in reversing the judgment and order of the trial Court. Viewed from any angle, the impugned judgment and order of the Sessions Court is not sustainable and pray to allow the appeal, set aside the impugned judgment and order of the Sessions Court and restore judgment and order of the trial Court.

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On the other hand, learned counsel for accused has supported the impugned judgment and order of the

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Sessions Court and submitted that through the oral and documentary evidence placed on record, the accused has rebutted the presumption and the burden shifted on the complainant to prove his case. However, the complainant has failed to prove the charge leveled against the accused beyond reasonable doubt and therefore, the Sessions Court is justified in interfering with the judgment and order of the trial Court and sought for dismissal of the appeal.

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Heard elaborate arguments of both sides and perused the record.

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Thus, it is the definite case of complainant that accused borrowed a sum of Rs.7 lakhs and complainant managed to pay the said amount to the accused through cheques for Rs.5 lakhs issued by his sister-in-law, Rs.1,31,000/- issued by his brother Ronald Monterio and Rs.69,000/- by him. When accused failed to repay the same with interest and on request and demand made by the complainant, he issued the subject cheque for

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Rs.9,38,082/- which includes upto date interest. However,

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when presented for realization, the cheque came to be dishonoured for insufficient funds. After receipt of legal notice, instead of paying the amount due the accused has sent evasive reply and therefore complaint is filed.

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Accused admit that the cheque in question belongs to him drawn on his account and it bears his signature. Therefore, presumption under Section 139 of N.I Act comes into play in favour of the complainant that the subject cheque was issued towards repayment of any legally recoverable debt or liability, placing the initial burden on the accused to rebut the presumption and prove the defence taken by him.

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In the reply notice at the earliest available opportunity, the accused has taken up a defence that at the instance of complainant, accused advanced loan of Rs.2 lakhs to one Yathiraj Shetty and in this regard agreement dated 31.07.2004 was entered into between them and later on, the said Yathiraj Shetty sold his land

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and paid Rs.4 lakhs and odd to the complainant. In the reply notice the accused has also claimed that at instance of complainant, he purchased half cent of land through sale deed dated 19.08.2004 and the sale consideration

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was paid by complainant and by way of security, complainant had taken the subject blank cheque in the month of August 2004. Later, at the instance of complainant, he sold the said land to the complainant's brother Ronald Monteiro through sale deed dated 02.07.2005 without consideration. However, complainant failed to return the blank cheque and utilising the same he has filed the false complaint.

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Having regard to the fact that accused admit that the subject cheque is drawn on his account, maintained with his banker and it bears his signature, the initial burden is on him to rebut the same, after which the burden would shift on the complainant to prove his case. Of course, it is sufficient for the accused to prove his defence by preponderance of probabilities, whereas

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complainant is required to prove his case beyond reasonable doubt.

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The evidence led by the complainant prove the

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fact that earlier he was working as a Seaman in Merchant Ship and used to remain on the wild sea most of the time, and therefore he used to send money to his brother and in turn his brother used to keep it in the account of his wife. In fact, the accused has also deposed to this effect. It appears for this reason, according to the complainant when accused sought financial assistance of Rs.7 lakhs, he got Rs.5 lakhs through cheque issued by his sister-in-law, Rs.1,31,000/- through cheque issued by his brother Ronald Monterio and he paid Rs.69,000/- through cheque. Complainant has also examined his brother Ronald Monterio as PW-2.

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At the outset, it is relevant to note that in the reply notice, the accused has not come up with any explanation with regard to the specific allegations that he has borrowed Rs.7 lakhs through 3 cheques issued by

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complainant, his brother and sister-in-law. During his cross-examination the complainant has denied that when accused purchased property measuring half cent, through his brother Ronald Monterio he had paid the sale consideration and at that time they have taken the subject blank signed cheque by way of security and misusing the same, the present complaint is filed. He has also denied that either through his brother or through complainant he had advanced hand loan of Rs.2 lakhs to Yathiraj Shetty and he has repaid the same to him.

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Complainant has also denied that in the sale deed, the property is under valued. Thus, through the reply notice and cross-examination of PW-1 the defence put forth by the accused is that Rs.2 lakhs given by complainant was used to purchase the property measuring half cent and it was sold back to his brother Ronald Monterio. However, Ronald Monterio who is examined as PW-2 has denied that for purchasing property measuring half cent in the name of accused he has paid the

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CRL.A No. 797 of 2014 NC: 2024:KHC:11224

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consideration in cash. PW-2 has also denied that when accused purchased the said property, he and complainant had paid the consideration and therefore while purchasing it from the accused in the name of Ronald Monterio no consideration was paid.

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During the course of his evidence accused has stated that while he purchased the property measuring half cent, the sale consideration was paid by the complainant, his brother and sister-in-law. In the next sentence he states that at that time the brother of complainant i.e., PW-2 Ronald Monterio gave him Rs.5 lakhs and for the security took a blank cheque at Ex.P1 and though he executed sale deed in respect of the said property in the name of Ronald Monterio, the blank cheque was not returned to him. This fact is not stated in the reply notice. It is forthcoming for the first time. It is pertinent to note that as evident from the sale deed at Ex.D2 accused had sold the said property for Rs.1,63,000/- and in fact during his cross-examination,

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the accused has stated that he has received the said sum

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i.e., sale consideration through cheque.

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Though the accused has claimed that the said property was under valued both in the sale deed executed in his favour and also in the sale deed executed by him in favour of Ronald Manetrio, there is no evidence led by the accused to establish the said fact. If that is the case, the accused is not having any explanation as to why Ronald Monterio gave him Rs.5 lakhs when he purchased property measuring half cent. If really the cheque was issued by way of security for Rs.5 lakhs received from Ronald Monterio, while executing the sale deed at Ex.D2, he could have insisted upon returning the same.

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Though during the course of his evidence Yathiraj Shetty who is examined as DW-3 has deposed to that effect, there is also no evidence to show that accused paid Rs.2 lakhs to Yathiraj Shetty on behalf of the complainant and he has returned the same to the complainant with interest by paying Rs.3,50,000/- and for

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this the said Yathiraj Shetty has sold his property for Rs.4 lakhs. At least he could have produced the sale deed to show that at the relevant point of time, he has disposed of his property for repaying the loan taken from complainant.

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During the cross-examination of DW-3, Ex.P8 is marked. It is a photocopy of an agreement between accused and DW-3 Yathiraj Shetty with regard to advancing of Rs.2 lakhs and issue of cheque No.561492. Though it bears the signature of the complainant as witness, that itself is not sufficient to establish that it was in fact a transaction between the complainant and Yathiraj Shetty. If that is the case there was no impediment to execute the said document between complainant and DW-3 Yathiraj Shetty. The alleged loan of Rs.2 lakhs advanced by accused to DW-3 Yathiraj Shetty is nothing to do with the complainant.

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Once again at para No.8 of his evidence i.e., during his cross-examination the accused has admitted that during August 2004 he has received hand loan of Rs.7

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lakhs from complainant's brother Ronald Monterio through

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3 cheques and he collected the proceeds through his account. With regard to the same the accused has claimed that out of Rs.7 lakhs received by him, he has sold half cent for Rs.5 lakhs and remaining Rs.2 lakhs was repaid through Yathiraj Shetty. If this is the explanation for repayment of Rs.7 lakhs, then there is no explanation for the accused for repayment of Rs.5 lakhs said to have been taken from PW-2 Ronald Monterio. Absolutely, the accused is not having any plausible and acceptable defence.

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If the financial assistance taken for purchasing property measuring half cent is repaid by selling the said property to Ronald Monterio, then the accused is having no explanation for repayment of Rs.5 lakhs allegedly taken from Ronald Monterio. Again he has claimed that Rs.5 lakhs taken from Ronald Monterio is repaid by selling the property to him. Once again he say that Rs.7 lakhs is repaid by selling property worth Rs.5 lakhs to Ronald

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Monterio and he has repaid remaining Rs.2 lakhs through

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Yathiraj Shetty.

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However, he is unable to state whether the

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entire Rs.7 lakhs was paid through the cheque of Ronald Monterio or whether cheque issued by complainant was also there. The accused has admitted that except the said Rs.7 lakhs, there was no transaction between him and Ronald Monterio. He has conceded that in his pass book at Ex.D3 there is no reference that the entire Rs.7 lakhs was paid by Ronald Monterio alone.

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Thus, accused claim that when he purchased property measuring half cent through sale deed dated 19.08.2004 Rs.2 lakhs was given by Ronald Monterio and his wife Saritha Monterio and with the same, he purchased the property and at that time, the subject blank cheque was taken by way of security. In the very next sentence, he states that at that time Rs.5 lakhs was given to him by Ronald Monterio and for the security of the same, the blank cheque at Ex.P1 was taken. He has no explanation

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whether he repaid Rs.5 lakhs to Ronald Monterio or Rs.2 lakhs allegedly paid for purchasing the said property was adjusted by selling the same property to Ronald Monterio. The accused himself is not sure whether the subject cheque was issued by way of security while purchasing property measuring half cent or when Ronald Monterio paid him Rs.5 lakhs. The examination of the entire evidence makes it clear that the accused has taken multiple defences which are mutually conflicting with each other. Of course he has failed to prove the defence taken by him.

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By examining DW-2 Srinath Aithal M.R, Officer of the Corporation Bank, Pandeshwara, the accused has proved that the cheque leaves including Ex.P1 was supplied to the accused on 27.04.2004. By this evidence the accused is trying to prove that the cheque at Ex.P1 was issued by him to Ronald Monterio during 2004 and it is being misused to file the present complaint. As held by

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the Hon'ble Supreme Court in T.Vasanthkumar Vs.

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Vijayakumari ( T.Vasanthkumar )¹ , mere fact that the cheque leaf printed before 2000 was issued for a transaction of 2007 by itself cannot be conclusive of the fact that the cheque was issued in 1999. On facts, it was held that the accused has failed to prove that the alleged debt was of the year 1999 or disproved that the loan was taken in 2006.

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Similar view was taken in Sri.Daneshwari Traders Vs. Sanjay Jain and Anr. ( Sri.Daneshwari Traders )² . In that case, the trial Court held that 2 cheques i.e., 2463 and 2480 are dated 18.08.2003, and 25.08.2003, whereas the subsequent cheque No.2497 is dated 08.08.2003 and it goes to suggest that cheque No.2497 was issued much more earlier to 18.08.2003 and it seems to be inconsistent and it would not have been in the normal course of business and that the said 3 cheques were already with the complainant and he has misused them and therefore, presumption under Section 139 of

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1 (2015) 8 SCC 378

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2 (2019) 16 SCC 83

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N.I. Act is not available to the complainant. The said view

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was affirmed by the High Court. Rejecting the said arguments and findings, the Hon'ble Supreme Court held that the Courts below did not keep in view the fact that the complainant has no control over the manner of issuance of cheques by the accused and how it was used. Merely because, later cheque No.2497 was said to have been issued by the accused at an earlier date i.e., 08.08.2003, it cannot be held that complainant has used blank cheques issued by the accused.

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In the light of the ratio in the above decisions and the facts established through the oral and documentary evidence placed on record, in the present case also the fact that the series of the cheques to which the subject cheque belong, were issued during 2004 would not raise a presumption that the subject cheque was misused during 2007.

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Certainly the complainant had no control over

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the cheque which was issued by the accused as he may

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not be aware of whether it is a old cheque and already

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cheques in that series are used. That itself would not make the case of the complainant doubtful, especially when the accused has failed to take a definite defence and prove it. Though accused has claimed that Ex.P1 cheque does not bear his handwriting, however the perusal of the same makes it evident that except the name of the payee the remaining writing is in the hand of accused.

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Considering the oral and documentary evidence placed on record, the trial Court has come to a correct conclusion that the allegations against accused are proved beyond reasonable doubt. However, without appreciating the oral and documentary evidence led by both the parties in right perspective, the Sessions Court has set aside the well reasoned judgment and order of the trial Court. Hence, it is perverse. Consequently, it is liable to be set aside and the judgment and order of the trial Court is to be restored. In the result, the appeal succeeds and accordingly, the following:

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ORDER

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i) Appeal filed by the complainant under Section 378(4) is allowed.

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ii) The impugned judgment and order dated 02.09.2014 in Crl.A.No.293/2008 on the file of IV Addl.District and Sessions Judge, D.K.Mangaluru is set aside.

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iii) The judgment and order dated 05.08.2008 in C.C.No.727/2007 on the file of V Addl JMFC, D.K.Mangaluru, is restored. The trial Court shall take steps to execute the order.

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iii) The Registry is directed to send back the trial Court as well as Sessions Court records along with copy of this judgment forthwith.

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Sd/JUDGE

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List No.: 1 Sl No.: 71

Mr Deepak D Monterio v. Mr Ronald D Souza

Case brief

What is this about?

What did the court decide?

Mr Deepak D Monterio v. Mr Ronald D Souza

Case brief

What is this about?

What did the court decide?

What the court decided

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