Accused convicted under Section 138 NI Act for dishonoured cheques of Rs.45,00,000 issued under an MOU towards refund of advance after cancellation of a sale agreement. Revisional court held accused failed to rebut statutory presumptions; no perversity in concurrent findings; revision dismissed and conviction upheld.
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NC: 2024:KHC:39135 CRL.RP No. 1239 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF SEPTEMBER, 2024
BEFORE
THE HON'BLE MR JUSTICE PRADEEP SINGH YERUR CRIMINAL REVISION PETITION NO. 1239 OF 2015
BETWEEN:
SMT. PRAFULLA SRINIVAS @ PRAFULLA MUKHI W/O SRINIVAS KASHI AGED ABOUT 57 YEARS R/AT NO.1791, 9TH CROSS 5TH MAIN, VIJAYANAGAR BANGALORE-560 040
…PETITIONER
(BY SRI. M.B.RAVIKUMAR, ADVOCATE)
AND:
Digitally signed by SHAKAMBARI Location: HIGH COURT OF KARNATAKA
SRI. RAJANNA S/O NANJUNDAIAH AGED ABOUT 40 YEARS R/AT NO.2991, M.K.K.ROAD MARIYAPPANAPALYA RAJAJINAGAR BANGALORE-560 010
…RESPONDENT
(BY SRI. GOVINDARAJ K. JOISA FOR SRI. RAJESHA SHETTIGARA, ADVOCATES)
THIS CRL.RP IS FILED U/S.397 R/W 401 OF CR.P.C PRAYING TO SET ASIDE THE ORDER DATED 20.10.2014 PASSED BY THE XIII A.C.M.M., BANGALORE IN C.C.NO.21833/2011 AND CRL.A.NO.1270/2014 DATED 03.11.2015 ON THE FILE OF LIX ADDL. CITY CIVIL AND S.J. (CCH-60), BANGALORE AND ACQUIT THE PETR. FOR THE OFFENCE P/U/S 138 OF N.I. ACT.
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THIS PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE PRADEEP SINGH YERUR
ORAL ORDER
This petition is filed by the accused challenging the judgment of conviction and order of sentence in C.C.No.21833/2011 dated 20.10.2014 the XIII Addl. Chief Metropolitan Magistrate, Bengaluru, whereby the said Court convicted the accused for the offence punishable under Section 138 of N.I. Act sentenced the accused to pay Rs. 45,10,000/- in default of payment of the said fine amount, the accused was ordered to undergo Simple Imprisonment for One year. Out of the said amount, Rs. 45,00,000/- was ordered to be paid to the complainant as compensation and Rs.10,000/- to be remitted to the State towards its expenses.
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order dated 03.11.2015 the LXI Addl. City Civil & Sessions Judge, Bangalore City dismissed the said appeal and confirmed the judgment of conviction and the order of sentence passed by the learned Magistrate. Petitioneraccused is before this Court questioning the legality, correctness, validity of the said order rendered by both the Courts.
counsel Sri Ravikumar.M.B. representing the accused that the judgment rendered by the both the Courts is illegal, arbitrary, perverse and there is a patent error committed by both the Courts. He further contends that both the Courts have not appreciated the oral and documentary evidence adduced and without taking into consideration the materials placed on record have mechanically passed an order without application of mind. He further contends that the Courts have failed to take into consideration the date, contents and the signature in Exs.P1 to P4 with different handwritings and the ink used in the said
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cheques. It is also contended by learned Counsel that the evidence of defendant witness DW.1 has been
conveniently ignored by both the Courts, wherein DW.1 has denied the transaction and has produced documents to show that the cheques so claimed to have been given by the complainant to the accused has infact been dishonoured to an extent of Rs.10,00,000/-. Therefore, there is a clear case of rebuttal to this extent proved by the accused.
counsel that prior to the presentation of the cheques to the Bank itself the accused-petitioner has got issued legal notice at Ex.D1 dated 06.12.2007 wherein, it is clearly averred that Rs.10,00,000/- got issued by way of two cheques have been dishonoured, due to which the petitioner cancelled the agreement of sale. Under the circumstances, the question of there arising any legal debt or liability would not arise.
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for the petitioner that as per Ex.P14, which is a MOU relied by the respondent-complainant, cannot be taken into consideration as it is a concocted and created document in which MOU the name of one Shivakumar, Vijay Enterprises is mentioned. Nevertheless, the complainant has not examined the said Shivakumar to prove the genuineness of the transaction or to show the existence of a legally recoverable debt. It is the contention of learned counsel for the petitioner that the said Shivakumar collected blank cheques from the petitioner which has been misused by the respondent-complainant. Therefore, the cheques in question were never issued to the respondentcomplainant. Hence, there is no legally enforceable debt or liability as against the respondent- complainant.
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respondent- complainant and the cancellation of the sale transaction, there is no legally recoverable debt existing between the petitioner and the respondent and pursuant to cancellation of the cheque, the advance amount came to be forfeited, thereby, the question of any liability towards respondent stands cancelled by issuance of cancellation agreement by the petitioner. All these relevant aspects have been mentioned in the evidence of DW.1 and has produced Exs.D1 to D7 to substantiate the same, thereby, the trial Court ought to have dismissed the complaint but has failed to take into consideration these crucial aspects which has been affirmed by the Appellate Court without proper application of mind. On these grounds, he contends that there is illegality, perversity and patent error committed by both the Courts, hence, he seeks to allow this petition, set aside the judgments rendered by both the Courts and consequently, acquit petitioner-accused of all charges for the offence punishable under Section 138 of N.I. Act.
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the trial Court has taken into consideration, all the documents both oral and evidentiary value of the documents and the evidence of PW.1 and DW.1 and being satisfied with the same has convicted the accused for the offence punishable under Section 138 of N.I. Act. The
Appellate Court on re-appreciation and re-analyzing the entire materials placed on record having not found favour with the petitioner dismissed the appeal and confirmed the
judgment of the trial Court which does not call for interference. Accordingly, he seeks dismissal of the petition.
(ii) What order?
complainant and the accused along with one Lakshmikanth.V entered into Memorandum Of Understanding on 09.09.2010. It is agreed as per the terms of the MOU that accused would refund Rs.45,00,000/- to the complainant towards refundable advance along with one Lakshmikanth.V. It is also stated in the MOU that there was an agreement of sale entered into between the complainant and the accused dated 27.09.2007 agreed to sell the property bearing Sy.No.14, new Sy.No.214 towards which, as part performance of the agreement Rs.40,00,000/was paid. In view of cancellation of the said agreement of sale stated herein above, the accused issued the above mentioned four cheques amounting to Rs.45,00,000/- in favour of the respondent-complainant. When the said cheques were
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presented, the same came to be dishonoured with an endorsement "Funds Insufficient" on 05.02.2011. The complainant got issued legal notice on 05.03.2011. Despite issuance of the legal notice no payment was made by the accused neither any reply sent. Hence, left with no other option complainant filed a complaint under Section 200 of Cr.P.C. for the offence punishable under Section 138 of N.I. Act. On summons being issued, the accused appeared before the Court and was enlarged on bail.
complainant got examined himself as PW.1 and got marked Exs.P.1 to P.14 and thereafter, statement of accused was recorded under Section 313 of Cr.P.C., wherein the accused denied the incriminating material against him and claimed to be tried and accordingly, he was tried. The accused thereafter, led his evidence DW.1 and got marked Exs.D1 to D7.
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Court, the trial Court convicted the accused for the offence punishable under Section 138 of N.I. Act and sentenced to
pay fine of Rs.45,10,000/- in default of payment to undergo Simple Imprisonment for One year and ordered to pay Rs.45,00,000/- as compensation to the complainant and Rs.10,000/- to defray the State expenses. Upon issuance of the legal notice, since no payment was made the complaint came to be registered under Section 200 of Cr.P.C. by the complainant and on fulfillment of the necessary ingredients contemplated under Section 138(b) technically the offence under Section 138 is made out on filing the complaint. Pursuant thereafter, the presumption under Section 139 of N.I.Act comes into play, Section 139 of N.I. Act reads as under:
" 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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issuance of the cheques is admitted, signature is admitted, Section 118 of N.I. Act would also come into play, which states that, once a cheque has been drawn, indorsed, accepted by the accused there is a presumption that it was drawn for consideration. Therefore, when these presumptions are ingrained in the statute, it is for the accused to prove and rebut to the contrary and establish that there was no such transactions or the claim so made by the complainant is frivolous by cogent material evidence of rebuttal.
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disputed with regard to sale agreement executed in the year 2007 for purchase of the property, so also, Ex.P.14-MOU executed by the accused so also not rebutted for denial. What is contended by the accused is that the cheques in question Exs.P.1 to 4 was not issued to the respondent-complainant but it was given to one Shivakumar as a signed blank cheque who has in turn handed over the same to the complainant which has been misused by the complainant. When this being the case, the issuance of the signed cheques is not disputed except
for making a statement that it was misused by the complainant having obtained from one Shivakumar. The agreement is not disputed which is of dated 27.09.2007. The MOU is not disputed by which the cheques have been issued to the complainant.
complainant did not have the capacity, capability to make such payment and hence, the agreement of sale came to be cancelled. Therefore, the complainant did not possess
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the financial capacity to make such payment warranting the accused to issue cheques in favour of the complainant.
I am afraid such a contention of the petitioner-accused cannot be accepted for the reasons already stated herein above with regard to the admission of execution of the sale agreement in 2007. The issuance of the signed cheques have been given, the execution of MOU-Ex.P.14. Merely stating that the complainant did not possess the financial capacity or capability itself would not establish rebuttal or having proved to the contrary the case made
out by the complainant. While rebutting the presumption in favour of the complainant something more will have to be done by the accused rather than the mere statement of denying the financial capacity and capability and the cheques being misused that also in fact would not come to the aid of the accused for the reason that Section 118 of the Act is a presumption again that the instrument is drawn for the consideration and a holder is a holder in due course.
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materials on record. However, having perused the materials placed before the Court the impugned judgment rendered by both the Courts, the submissions of the learned counsel for the petitioner and respondent, I do not find any material irregularity or perversity or any patent error in the judgments rendered by both the Courts. There is no good ground made out by the petitioneraccused to interfere with the well considered judgments of conviction and order of sentence of the trail Court and the same being confirmed by the Appellate Court. The petitioner-accused has not made out any ground to show illegality or perversity committed by both the Courts. Therefore, I answer the above Point No.1 in the negative.
ORDER
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confirmed by the Appellate Court in Crl.A.No. 1270/2014 dated 03.11.2015 passed by LXI Additional City Civil and Sessions Judge, Bengaluru, is hereby upheld.
(iii) The petitioner has deposited Rs.11,27,500/before the trail Court. The same shall be permitted to be withdrawn by the respondent-complainant, if already not withdrawn.
Ordered accordingly.
Sd/(PRADEEP SINGH YERUR) JUDGE
PSJ, List No.: 1 Sl No.: 48
2 issues framed by the court
Whether the accused rebutted presumptions under Sections 118 and 139 of the NI Act regarding legally enforceable debt.
Whether there was illegality or perversity in concurrent conviction by trial and appellate courts under Section 138 NI Act.
4 provisions across 2 enactments
Smt. Prafulla Srinivas @ Prafulla Mukhi
Sri. Rajanna
Pradeep Singh Yerur
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
