Dismissed

Sri Suresh Babu C K v. Sri Basave Gowda

Karnataka HC14 Jun 2024CRL.RP/395/2023

Case brief

AI extract

What is this about?

The High Court dismissed two criminal revision petitions challenging convictions under the Negotiable Instruments Act. The court upheld the findings that cheques issued for chit fund repayments were drawn for legally enforceable debts, and payments toward a different transaction did not invalidate liability in separate cases.

What did the court decide?

Both criminal revision petitions filed by Sri Suresh Babu C.K. were dismissed.

Sri Suresh Babu C K Vs Sri Basave Gowda — Cheque Dishonour | Karnataka HC (2024)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 14^TH DAY OF JUNE, 2024

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BEFORE

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THE HON'BLE MR. JUSTICE H.P. SANDESH

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CRIMINAL REVISION PETITION NO.395/2023 C/W CRIMINAL REVISION PETITION NO.343/2023

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IN CRIMINAL REVISION PETITION NO.395/2023:

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BETWEEN:

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SRI SURESH BABU C.K., S/O PAITHAL NAIR, AGED ABOUT 48 YEARS, R/AT NO.54, “SHIVAMAYAM” SOMESHWARA LAYOUT, NEAR SAMBHRAM COLLEGE, CHIKKABETTAHALLI, VIDYARANYAPURA, BENGALURU-560 097. … PETITIONER

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(BY SRI DHARMAPAL, ADVOCATE)

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AND:

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SRI BASAVE GOWDA, S/O HANUME GOWDA, AGED ABOUT 40 YEARS, R/AT NO.69, NEAR PILLAPPA CIRCLE, ABBIGERE, BENGALURU. … RESPONDENT

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(BY SRI H.P.GANESH GOWDA, ADVOCATE)

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THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W 401 OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND CONVICTION ORDER DATED 14.01.2020

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PASSED BY THE XII ADDITIONAL C.M.M AT BANGALORE IN C.C.NO.6318/2018 FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT AND TO ACQUIT THE PETITIONER BY SETTING ASIDE THE ORDER PASSED BY THE LEARNED LXII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT BANGALORE (CCH 63) IN CRL.A NO.257/2020 DATED 28.02.2023.

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IN CRIMINAL REVISION PETITION NO.343/2023:

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BETWEEN:

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SRI SURESH BABU C K, S/O PAITHAL NAIR, AGED ABOUT 48 YEARS, R/AT NO.54, ”SHIVAMAYAM” SOMESHWARA LAYOUT, NEAR SAMBHRAM COLLEGE, CHIKKABETTAHALLI, VIDYARANYAPURA, BENGALURU-560 097. … PETITIONER

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(BY SRI DHARMAPAL, ADVOCATE)

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AND:

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SRI ANAND M.S, S/O SWAMY GOWDA, AGED ABOUT 46 YEARS, R/AT NO.3, KAVERI COMPLEX, OPP. CENTRAL BANK OF INDIA, ABBIGERE, BANGALORE-560 090. … RESPONDENT

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(BY SRI H.P.GANESH GOWDA, ADVOCATE)

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THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W 401 OF CR.P.C PRAYING TO ALLOW THE ABOVE REVISION PETITION AND TO SET ASIDE THE JUDGMENT AND CONVICTION ORDER DATED 14.01.2020 PASSED BY THE XII ADDITIONAL CMM, AT BENGALURU IN C.C.NO.6317/2018 FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT AND TO ACQUIT THE PETITIONER BY SETTING ASIDE THE

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ORDER PASSED BY THE LEARNED LXII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT BENGALURU (CCH-63) IN CRL.A.NO.258/2020 ON 28.02.2023.

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THESE CRIMINAL REVISION PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 07.06.2024, THIS DAY THE COURT PRONOUNCED THE FOLLOWING:

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O R D E R

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These two criminal revision petitions are filed challenging the judgment of conviction and confirmation passed by the Trial Court as well as the First Appellate Court questioning the same for the offence punishable under Section 138 of the Negotiable Instruments Act (‘NI Act’ for short).

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The parties are referred as the complainant and accused for the convenience of the Court and to avoid the confusion.

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The brief facts of the case:

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C.C.No.6318/2018 is filed by the complainant one

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Basave Gowda claiming that he had invested an amount of Rs.1,00,400/- in the accused chit fund and in order to repay the chit amount, the accused had issued the cheque dated 02.11.2017 for an amount of Rs.1,00,400/- drawn on Karnataka Bank, Malleshwaram Branch, Bangalore. When the said cheque

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was presented, the same was returned with an endorsement “funds insufficient.” Hence, the complainant got issued the legal notice to the accused on 08.12.2017 and the same was returned with an endorsement “not claimed” and the accused did not reply or comply the notice and hence complaint was filed and cognizance was taken for the offence punishable under Section 138 of the NI Act. The complainant in order to prove his case examined himself as P.W.1 and got marked the documents at Exs.P.1 to 5. On the other hand, the accused examined himself as D.W.1 and got marked the documents at Exs.D.1 to 4. The Trial Court having perused both oral and documentary evidence placed on record convicted the accused and ordered to pay the cheque amount. The same was questioned by the accused in Crl.A.No.257/2020 and on re-appreciation of both oral and documentary evidence placed on record, the First Appellate Court confirmed the judgment of the Trial Court. Hence, Crl.R.P.No.395/2023 is filed before this Court.

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Crl.R.P.No.343/2023 is arising out of

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C.C.No.6317/2018, wherein the complainant had invested an amount of Rs.2,56,250/- in the chit fund of the accused and for repayment of the money, the accused issued the cheque dated

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04.11.2017 for the said amount. When the said cheque was presented, the same was returned with an endorsement “funds insufficient.” Hence, the complainant got issued the legal notice to the accused on 08.12.2017 and the same was returned with

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an endorsement “not claimed” and the accused did not reply or comply the notice and hence complaint was filed and cognizance was taken for the offence punishable under Section 138 of the NI Act. The complainant in order to prove his case examined himself as P.W.1 and got marked the documents at Exs.P.1 to 8. On the other hand, the accused examined himself as D.W.1 and got marked the documents at Exs.D.1 to 4. The Trial Court having perused both oral and documentary evidence placed on record convicted the accused and ordered to pay the cheque amount. Hence, Crl.A.No.258/2020 was filed and the same was dismissed confirming the judgment of the Trial Court. Hence, Crl.R.P.No.343/2023 is filed before this Court.

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The learned counsel for the petitioner in both the petitions would contend that those two cheques are issued on 02.11.2017 and 04.11.2017. Admittedly, an amount of Rs.4,50,000/- was paid to the complainant Anand M.S. and the

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said amount is paid towards the amount of Rs.2,56,250/-, which

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is the subject matter of the other criminal case and in respect of the complainant Basavegowda to the tune of Rs.1,00,400/- and also in respect of another person Kumar to the tune of Rs.94,550/- and in total it comes to Rs.4,51,200/- and hence made the payment of Rs.4,50,000/- and hence the question of convicting and confirming the same against the accused is not tenable under law. The learned counsel contend that the complainants came near the house of the accused and caused threat and hence he issued the cheques and after subsequent to the issuance of the cheque only, an amount of Rs.4,50,000/was paid on 09.11.2017. The Trial Court as well as the First Appellate Court failed to appreciate this fact and erroneously convicted the accused for the offence punishable under Section 138 of the NI Act. Inspite of the accused rebutted the case of the complainant by leading evidence by examining himself as D.W.1 in both the cases and got marked the documents in exhibit ‘d’ series, the same has not been accepted by both the Courts. The learned counsel contend that the accused has already resigned from the post of General Manager and in the other case, resignation letter and documents are produced as Exs.D.2 to 4 and he was relieved on 31.10.2017 itself and these

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cheques are dated 02.11.2017 and 04.11.2017 and those cheques are subsequent to his resignation and hence he is not liable to pay any amount.

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Per contra, the learned counsel for the respondents would contend that the complainant Sri Anand M.S. was the subscriber of two chits for Rs.5,00,000/- and Rs.3,00,000/- and an amount of Rs.4,50,000/- was paid to Sri Anand M.S. and the same was towards first chit transaction of Rs.5,00,000/- and an attempt was made to confuse the Court and both are independent transaction and both the Courts have appreciated the material on record and no grounds are made out. The learned counsel contend that for having paid the amount of Rs.1,000/- in respect of chit amount of Rs.5,00,000/-, it was categorically admitted by the accused and now he cannot contend that he is not having any knowledge about investing the amount. The learned counsel contend that the complainants have invested the money in the chit fund of the accused only on his request and he worked as General Manager and the same is not in dispute and now he cannot contend that the chit company made the payment of Rs.2,56,250/in favour of the complainant, Rs.1,00,400/- in respect of another complainant

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and Rs.94,550/- in respect of other investor Kumar. An attempt is made to adjust those amount with regard to the payment of Rs.4,50,000/- is concerned and even the said amount not tallies with each other. No doubt, there is an admission on the part of these two complainants that the complainants as well as other persons went near the house of the accused and the accused gave the cheque. But no threat was made as contended by the accused and no action was taken for having caused threat and obtaining the cheque. The same has not been accepted by both the Courts and hence, it does not require any interference.

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Having heard the learned counsel for the petitioner and the learned counsel for the respondents, the points that arise for the consideration of this Court are:

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(i) Whether both the Courts have committed an error in convicting the accused for the offence punishable under Section 138 of the NI Act and whether it requires interference?

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(ii) What Order?

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Having perused both the complaint averments, it is

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the case of the complainants that this accused was working as General Manager in the chit fund Company and he had

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misappropriated the invested amount of the complainants. Hence, they went and demanded to repay the money and the accused in his personal capacity gave the subject matter of the cheques and not in the name of the chit fund Company. Having perused the subject matter of the cheques also, cheques are issued by the accused and not on behalf of the Company and both the cheques belongs to his account in Karnataka Bank and it bears the signature of the accused. It is his contention that the amount was invested in the Company and not in his individual name. It is important to note that in both the cases, notices are issued and same were returned with an endorsement “not claimed”. It is the contention of the accused that the notice was not served, but in the cross-examination in both the cases, he categorically admitted the address mentioned belongs to him and also postal receipt is also produced and postal return cover also produced and there is an endorsement “not claimed and returned to sender”. Both the Courts have taken note of general clauses act for having sent the notice to the correct admitted address. No doubt, a suggestion was made to D.W.1 in C.C.No.6318/2018 for having paid the amount of Rs.1,00,400/-.

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The accused contend that he is not having any acquaintance with

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the complainant, but admitted the issuance of the cheque and also admitted the issuance of cheque in favour of Anand and Vijayendra and both of them initiated the proceedings against him. He also categorically admits that when the cheques were taken forcibly, he did not initiate any proceedings against the complainants.

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It is important to note that in C.C.No.6317/2018 also D.W.1 though denies having acquaintance with the complainant, but categorically admitted with regard to notice sent to correct address and admitted his signature in Ex.P.1, but only contention was that entries made are not in one ink. In other case P.W.1 denied with regard to payment of Rs.4,50,000/-, but the complainant Anand admitted that he has received an amount Rs.4,50,000/- and his specific case is towards Rs.1,000/- he had invested every month for the amount of Rs.5,00,000/- chit fund. It is important to note that the document is also marked for having made payment of Rs.4,50,000/-. D.W.1 in case of Anand when the pass book was confronted to D.W.1, he categorically admitted that seal pertains to the said chit fund Company in which he was working as General Manager and chit fund pass book is marked as Ex.P.8 when the document was confronted.

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He categorically admits that the said chit fund Ex.P.8 passbook pertains to Anand. When a suggestion was made that from 01.06.2016 he used to make payment of Rs.1,000/- and agent of the chit fund used to make the signature, he categorically admits may be he had signed and collected an amount of Rs.1,000/- and hence it is clear that the complainant Anand was also subscriber of the chit for Rs.5,00,000/-. A suggestion was made that the amount of Rs.4,50,000/- which was paid in terms of Ex.D.1 on 09.11.2017 is in respect of the said investment, D.W.1 not categorically denies, but he says that he cannot tell as the same belongs to him. When the suggestion was made that the payment in respect Ex.D.1(a) and Ex.P.1 there is no any connection and the same was not specifically denied, but he says he is not aware of the same. When such being the case, it is very clear that an amount of Rs.4,50,000/- was paid in respect of chit transaction for Rs.5,00,000/- and this subject matter of cheque is in respect of other chit subscribed by the complainant for an amount of Rs.3,00,000/-.

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It is important to note that an attempt is made by

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the learned counsel for the petitioner that the said payment of Rs.4,50,000/- is towards the amount of other complainant and

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also subject matter of the cheque of Rs.2,56,200/- and so also an amount of Rs.94,550/- payable to one Kumar and in an ingenious method is adopted by the accused and twisted the facts. The learned counsel contend that the payment is made towards the said transaction. It is important to note that specific suggestion was made that this subject matter of the cheque was issued in respect of other chit transaction of Rs.3,00,000/- and every month he was paying Rs.500/- and the said suggestion was denied. It is important to note that in respect of both the claim of complainants, it is the contention of the accused that he is not aware of the investors i.e., the complainant and the accused and no explanation with regard to the issuance of the cheque. If there was no such transaction in the chit fund Company in which he was working as General Manager, he has to explain the reason for giving the cheque in favour of both the complainants to the tune of Rs.1,00,400/as well as Rs.2,56,250/-. The Trial Court passed a cryptic order, but the Appellate Court extracted the answers elicited from the mouth of D.W.1 with regard to the issuance of notice is concerned and in detail discussed that there is no explanation on the part of the accused for not taking any action against these two

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complainants for having forcibly taken the cheque. The First Appellate Court in Crl.A.No.257/2020 discussed Ex.D.4, which was relied upon by the accused. The very letter is addressed by the accused wherein he made request to consider the pending salary from July 2017 to 31.10.2017 and allowance due to him. He was enrolled chit in their firm at the head office showing cumulated amount around Rs.11,00,000/- and also the amount which he paid to the customers as monthly interest and payments and also in detail discussed regarding 313 statement and he has not at all stated anything about the payment of amount mentioned in Ex.P.1.

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The First Appellate Court on re-appreciation of material on record in Crl.A.No.258/2020 in respect of case of the complainant Anand, in detail discussed the contention taken and for having made the payment of Rs.4,50,000/-. In paragraph No.22 discussed resignation letter as well as the documents relied upon by the accused Exs.D.2 to 4 and comes to the conclusion that Exs.D.2 to 4 will not come to the accused help. The fact that Ex.P.1 is issued on 02.11.2017 and 04.11.2017 i.e., after resignation he has issued the subject matter of both the cheques and also considered that if the Company is liable to

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pay the amount, then what made him to issue the subject matter of the cheques after his retirement from the Company. These facts are taken note of by both the Courts. Hence, I do not find any force in the contention of the learned counsel for the petitioner that payment of Rs.4,50,000/- is towards subject matter of the cheques. There is a force in the contention of learned counsel for the complainants that payment of Rs.4,50,000/- is made in respect of other chit fund by Anand and the same has been admitted particularly admitting the cheque, Ex.P.8 pass book in which entries are made for having made the payment of Rs.1,000/- each in respect of Rs.5,00,000/- chit fund. It is important to note that Ex.P.8, which was confronted to D.W.1 clearly discloses that date of commencement of chit is on 27.06.2016 and termination of chit is on 27.01.2018 and there were 20 members and monthly subscription was Rs.25,000/-. There is an acknowledgement for having received the amount on different dates. The document of Ex.P.8 is not disputed and the same is admitted during the course of crossexamination and the total amount is Rs.4,53,780/-. The last total amount including collection as well as dividend and also collection amount is specific that it is Rs.1,000/-. When these

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are the material available before the Court, the very contention that Rs.4,50,000/- is paid in respect of these two complainants as well as other subscribers cannot be accepted. Both the Courts have taken note of the said fact into consideration while considering the case of the petitioner. Even discussed with regard to the admission available in both the subject matter of the cheques Ex.P.1 and the signature Ex.P.1(a). The First Appellate Court taken note of the judgment of the Apex Court in the case of RANGAPPA v. MOHAN reported in 2010 AIR SC 296 , wherein drawing of presumption when notice was issued was not rebutted and also taken note of the judgment of the Apex Court in the case of T.P. MURUGAN v. BOJAN reported in 2018 (8) SCC 469, wherein it is held that once the cheque has been signed and issued in favour of the holder of the cheque, there is a statutory presumption that the cheque is issued in respect of legally enforceable debt or liability.

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No doubt, the revision petitioner examined himself as D.W.1. Having perused the evidence and when there is an admission with regard to the receipt of Rs.1,000/- in respect of the chit and total amount of Rs.4,51,200/- as mentioned and payment of Rs.4,50,000/-, the accused has not rebutted the

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case of the complainant for having invested the money in the Company run by the accused and also fact that he had issued the cheques in his personal capacity and even while resigning also made the claim from the company for the interest he paid towards the customers and these two subject matter of cheques are also issued in his individual capacity. The same is considered by both the Courts and even extracted the admission on the part of D.W.1 for not taking any action for taking the subject matter of the cheque forcibly. Both the Courts also taken note of the fact that even an ordinary prudent man will initiate proceedings when the cheques are taken forcibly and no such action was taken and the same is also discussed. Since the revision petitioner is one and the same in both the revision petitions and though the complainants are different, but factual aspects of the case and evidence available on record are similar and hence this Court considered the material on record together to exercise the revisional jurisdiction. Having perused the material on record, the scope of revision is very limited and both the Courts finding is not perverse as contended by the learned counsel for the petitioner and hence I do not find any merit in the revision to reverse the concurrent finding of both the Courts

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and hence the revision fails for contrary decision. Hence, I answer the point for consideration in the negative.

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In view of the discussions made above, I pass the

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following:

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ORDER

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Both the criminal revision petitions are dismissed.

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Sd/JUDGE

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Sri Suresh Babu C K v. Sri Basave Gowda

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Sri Suresh Babu C K v. Sri Basave Gowda

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