Partly allowed

Sri. C. Channegowda v. Sri. B.L. Devaraja

Karnataka HC26 Sept 2024CRL.RP/55/2017

Case brief

AI extract

What is this about?

The High Court dismissed the revision petition regarding conviction for cheque dishonour (Section 138 NI Act) but modified the sentence. The imprisonment of one year was set aside, while the fine and compounding fine were affirmed. Eight weeks additional time for fine payment was granted.

What did the court decide?

Imprisonment of one year set aside; other aspects of judgment (fine, compounding fine) affirmed; eight weeks time granted for fine payment.

Sri. C. Channegowda Vs Sri. B.L. Devaraja — Cheque Dishonour | Karnataka HC (2024)

¶1

¶2

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶3

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26^TH DAY OF SEPTEMBER, 2024 BEFORE

¶4

THE HON'BLE MR JUSTICE PRADEEP SINGH YERUR CRIMINAL REVISION PETITION NO.55 OF 2017

¶5

BETWEEN:

¶6

SRI C.CHANNEGOWDA S/O.CHANNAIAH AGED ABOUT 60 YEARS R/AT NO.379 BOGADI ROAD HINKAL-570 002 MYSURU

¶7

…PETITIONER

¶8

(BY SRI G.S.BALAGANGADHAR, ADVOCATE)

¶9

AND:

¶10

SRI B.L.DEVARAJA S/O.LATE LAKSHMEGOWDA AGED ABOUT 64 YEARS R/AT HEMAVATHI BADAVANE K.R.PET TOWN AND TALUK MANDYA DISTRICT-571 401

¶11

Digitally signed by GAVRIBIDANUR SUBRAMANYA GUPTA SREENATH Location: HIGH COURT OF KARNATAKA

¶12

…RESPONDENT

¶13

(BY SRI A.S.MAHESH, ADVOCATE)

¶14

THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 READ WITH SECTION 401 CR.PC. PRAYING TO SET ASIDE THE JUDGMENT OF CONVICTION AND SENTENCE DATED 27.10.2016 IN CRL.A.NO.5022/2015 PASSED BY III ADDITIONAL DISTRICT AND SESSIONS JUDGE, MANDYA (SITTING AT SRIRANGAPATNA) AND THE JUDGMENT OF CONVICTION AND SENTENCE DATED 27.08.2015 PASSED IN CC.NO.314/2010 BY THE CIVIL JUDGE AND JMFC, K.R.PETE FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881.

¶15

THIS PETITION COMING ON FOR FINAL HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

¶16

¶17

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶18

CORAM: HON'BLE MR JUSTICE PRADEEP SINGH YERUR

¶19

ORAL ORDER

¶20

This petition is filed by the petitioner-accused seeking to set-aside the judgment of conviction and order on sentence dated 27.08.2015 passed in CC.No.314/2010 by the Civil Judge and JMFC, K.R.Pete, which is confirmed in the judgment dated 27.10.2016 passed in Crl.A.No.5022/2015 by III Additional District and Sessions Judge, Mandya, Sitting at Srirangapattana.

¶21

Brief facts of the case are as under:

¶22

It is the case of the complainant that the complainant

¶23

and the accused are known to each other. The accused had approached the complainant for a loan amount of Rs.9,00,000/- for purchase of a site. Since the accused was known to him, he borrowed a sum of Rs.9,00,000/from the complainant on the promise that the said amount would be repaid within two months. When the complainant demanded the said amount, the accused issued a cheque bearing No.010681 for a sum of Rs.9,00,000/- dated

¶24

3 - NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶25

25.05.2010 drawn on Centurion Bank of Punjab, now renamed as HDFC Bank, V.V.Mohalla. When the complainant presented the said cheque to the Bank for encashment, to his shock and surprise, the same was dishonoured on the ground that the 'Account closed'. The complainant, thereafter got issued a legal notice on 27.10.2010 calling upon the accused to repay the dishonoured cheque amount through a registered post with acknowledgment due as well as under certificate of posting. Notice issued through certificate of posting came to be served on the

¶26

accused. Despite demand made by the complainant by issuing legal notice, the dishonoured cheque amount was not paid. Hence, the complainant was perforced to register

¶27

a complaint under Section 200 of Cr.PC. against the accused for the offence punishable under Section 138 of the N.I.Act.

¶28

2.1 On summons being served on the accused, he

¶29

appeared before the Court and was enlarged on bail.

¶30

¶31

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶32

2.2 On recording of plea, he pleaded not guilty and

¶33

claimed to be tried and accordingly, he was tried.

¶34

2.3 In order to substantiate his case, the complainant

¶35

examined himself as PW.1 and another witness as PW.2 and got marked Ex.P1 to Ex.P11. After conclusion of evidence of the complainant, the statement of the accused was recorded under Section 313 of the Code of Criminal Procedure, wherein he denied the incriminating evidence against him and pleaded not guilty. The accused examined himself as DW.1, but did not produce any documentary evidence on his behalf.

¶36

2.4 Upon consideration of the material placed before

¶37

the Court, both oral and documentary, the trial Court being satisfied that the complainant proved his case by establishing necessary ingredients of Section 138 of the N.I. Act, convicted the accused for the said offence and sentenced him undergo Simple Imprisonment for a period

¶38

of one year and to pay a fine of Rs.12,00,000/-, in default to undergo further Simple Imprisonment for a period of

¶39

5 - NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶40

six months. Acting under Section 357(3) of the Code of Criminal Procedure, a sum of Rs.11,75,000/- was ordered to be paid to the complainant as compensation and the remaining amount of Rs.25,000/- was ordered to be remitted to the State.

¶41

2.5 Being aggrieved by the said judgment of conviction and order of sentence, the accused preferred an appeal before the appellate Court. On re-appreciation and re-analyzation of the oral and documentary evidence on record and the arguments advanced by learned counsels for both the parties, the appellate Court did not find favour with the accused and accordingly dismissed the appeal confirming the judgment of conviction and order of sentence passed by the trial Court.

¶42

2.6 Aggrieved by the same, the petitioner/accused is

¶43

before this Court challenging the legality, correctness and propriety of judgments passed by both the Courts.

¶44

¶45

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶46

I have heard learned counsels for petitioner as well as respondent.

¶47

It is the vehement contention of learned counsel – Sri G.S. Balagangadhar for the for petitioner/accused that the impugned judgments rendered by both the Courts are perverse, illegal, arbitrary and there are patent irregularities and errors committed by both the Courts. Primarily, learned counsel contends that there is no service of notice as contemplated under Section 138(b) of the N.I. Act. Since notice has not been served, the petitioner/accused did not have the opportunity to reply at the first instance by taking all the pleas.

¶48

4.1 It is also contention of learned counsel for petitioner that the trial Court has committed an error by concluding that the petitioner/accused has not rebutted the presumption cast in favour of the complainant. It is his further contention that the impugned judgments are rendered without taking into consideration whether the complainant had necessary source of income and financial

¶49

¶50

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶51

capacity to lend the loan as alleged. Infact, no cogent material has been placed on record by the complainant to show that he had necessary source of income and financial capacity to lend huge amount of Rs.9,00,000/- by way of cash to the accused. Learned counsel further contends that the complainant being an advocate by profession having knowledge of law, it cannot be believed that he lent such a huge amount by way of cash without obtaining any acknowledgment. It cannot also be believed that the complainant was not aware of consequences of lending such huge amount without proper material to show necessary source of income and financial capacity.

¶52

4.2 It is also contended by learned counsel for petitioner that both the Courts have committed an error in coming to the conclusion that the petitioner/accused has admitted the issuance of cheque/Ex.P1, signature on the cheque and so also the contents of the cheque. Apart from the cheque/Ex.P1, no document has been placed by the complainant to substantiate his claim that he has

¶53

¶54

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶55

handed over a sum of Rs.9,00,000/- by cash to the accused and for which Ex.P1/cheque got issued to the complainant. It is also contention of learned counsel for petitioner that agricultural income certificates produced by the complainant did not depict that the complainant has financial capacity to lend such huge amount of Rs.9,00,000/- to the accused and so also it cannot be believed that the complainant has given such huge amount to the accused in the absence of any of the witnesses. On these grounds, learned counsel contends that the

¶56

judgments rendered by both the Courts are perverse and contrary to the material on record.

¶57

4.3 It is further contended by learned counsel for petitioner that both the trial Court as well as appellate Court have committed a gross error in not appreciating the evidence adduced by DW.1, wherein he has stated that Ex.P1/cheque was given to an advocate – Sri Appaji Gowda for security purpose and the same was mis-utilised by the complainant. This fact of the matter has not been

¶58

¶59

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶60

appreciated by both the Courts and conveniently ignored the evidence adduced by DW.1. It is also contended by learned counsel that the accused has filed an application under Section 311 of the Code of Criminal Procedure to recall and re-examine him further and also for production of additional documents. The said application has been erroneously rejected by the trial Court without affording opportunity to the accused to putforth his case in an effective manner.

¶61

4.4 Learned counsel further contends that both the Courts have rendered the judgment of conviction on the ground that the accused has not examined one Mr. Appaji Gowda, to whom the cheque was given by the petitioner/accused for security purpose, which is erroneous and the same cannot be ground for conviction. Learned counsel further contends that both the Courts have not appreciated the evidence and the material placed on record in the proper perspective. On these grounds, learned counsel seeks to allow the petition, set aside the

¶62

10 -

¶63

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶64

judgments rendered by both the Courts and consequently acquit the accused for the offence under Section 138 of the N.I. Act.

¶65

Per contra, learned counsel representing the respondent/complainant vehemently contends that there is no illegality, perversity, arbitrariness or patent error in the judgments rendered by the trial Court as well as the appellate Court. It is contended by learned counsel for respondent that issuance of the cheque, holding of account and signature on the cheque having been admitted, ingredients of Section 138 of the N.I. Act are satisfied and therefore, there is a presumption in favour of the complainant and the said presumption is not rebutted by the accused. On these grounds, learned counsel seeks to dismiss the petition and consequently affirm the impugned judgments rendered by the trial Court and the appellate Court.

¶66

11 -

¶67

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶68

I have given my thoughtful consideration to the arguments advanced by learned counsel for petitioner/accused and learned counsel for respondent/ complainant and perused the impugned judgments rendered by both the Courts and the original records.

¶69

Having heard learned counsels for parties, the points that would arise for consideration in this revision petition are:

¶70

i) Whether the petitioner/accused has made out any valid ground to show that there is illegality, perversity or patent error in the impugned judgments rendered by the trial Court and the appellate Court ?

¶71

ii) Whether the impugned judgments rendered by both the Courts are liable to be set aside ?

¶72

On careful perusal and examination of the material

¶73

placed on record, it is seen that Ex.P1 is the cheque bearing No.010681 dated 25.5.2010 for a sum of Rs.9,00,000/- which was issued by the petitioner/accused

¶74

and the signature on the cheque is admitted. The

¶75

12 -

¶76

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶77

complainant presented the said cheque for encashment and the same was returned with an endorsement “Account closed”, on 11.10.2010. Therefore, it is the requirement of the respondent/complainant to make a demand for payment of the dishonoured cheque amount by giving a notice in writing to the drawer of the cheque, within 30 days of receipt of information by him from the bank regarding dishonour of cheque. In the present case, the complainant called upon the accused to pay the cheque amount through legal notice dated 27.10.2010 by RPAD as well as certificate of posting. It is seen that legal notice was issued to the accused to the same address as mentioned in the complaint filed under Section 200 of the

¶78

Code of Criminal Procedure.

¶79

The legal notice issued by way of RPAD returned

¶80

with an endorsement that ‘party not found in the given address since seven days’. However, notice issued under certificate of posting came to be served. Therefore, the necessary ingredient under Section 138(b) of the N.I. Act

¶81

13 -

¶82

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶83

has been complied. Since there is no response from the accused regarding repayment of the dishonoured cheque amount, the complainant filed a complaint under Section 200 of the Code of Criminal Procedure for the offence punishable under Section 138 of the N.I. Act. At this stage, it has to be stated that upon issuance of the summons to the very same address to which legal notice was sent, the accused appeared before the Court.

¶84

On fulfillment of necessary ingredients required under the provisions of Section 138 of the N.I. Act, the cause of action for filing complaint under Section 200 of the Code of Criminal Procedure is technically made out.

¶85

On filing complaint, Section 139 of the N.I. Act comes into play, which would show a presumption in favour of the complainant. Section 139 of the N.I. Act reads as under:

¶86

"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."

¶87

14 -

¶88

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶89

It is no doubt true that the presumption under Section 139 of the N.I. Act is a rebuttable presumption and once such presumption is rebutted by cogent material, the onus would shift on the complainant to disprove such rebuttal. Now, let me see whether the accused has rebutted the presumption cast in favour of the complainant. In the present case on hand, two different stands were taken by the accused, one is that the complainant did not have the financial capacity to lend the loan amount and the question of giving the cheque to the complainant did not arise. Secondly, the accused has taken a plea by way of evidence that cheque/Ex.P1 was given to an advocate – Sri Appaji Gowda for security purpose and the same was mis-utilised by the complainant to make unlawful gain. Therefore, it is apparently clear from the statement of accused/DW.1 that the cheque has been signed and issued by him. The question is whether the cheque is given to Mr. Appaji Gowda or the complainant. This aspect ought to have been elicited by the accused himself as it is for the

¶90

15 - NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶91

accused to produce or place before the Court the best piece of evidence as contemplated under the Evidence Act. It is the claim of the accused that the cheque was handed over to an advocate - Mr. Appaji Gowda for security purpose. In that event, nothing prevented the accused to examine the advocate - Mr. Appaji Gowda before the Court to show that the cheque was given to him and not to the complainant. But, the accused has not examined said Mr. Appaji Gowda. Therefore, the best piece of evidence is not placed before the Court by the accused. Further, the evidence of PW.1 is not properly controverted. On the contrary, the complainant produced sale deeds and agricultural income certificates as per Ex.P7 to Ex.P11 to show his financial status and capability.

¶92

Be that as it may, it is necessary to state that under Section 118 of the N.I. Act, once a cheque has been drawn, indorsed, accepted by the accused, there is a presumption that it is drawn for a consideration. Section

¶93

16 -

¶94

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶95

118(a) of the N.I. Act contemplates the presumption of consideration and Section 118(g) of the N.I. Act contemplates that the holder of a negotiable instrument is a holder in due course. These two provisions alongwith Section 139 of the N.I. Act clearly go in favour of the complainant where there is a presumption in favour of the complainant with regard to consideration and also instrument/cheque having been given to the person who has filed the complaint. No doubt, it is true that such presumption is rebuttable presumption. It is for the petitioner/accused to rebut the said presumption and establish that there was no such transaction or that it is a frivolous case or a concocted story by way of cogent material evidence before the Court.

¶96

The rebuttal cannot be by way of a mere

¶97

statement of denial, but it should be something more than the mere statement to disprove the presumption in favour of the complainant under Sections 139 and 118 of the N.I. Act. It is only when the petitioner/accused rebuts the

¶98

17 -

¶99

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶100

presumption by way of production of oral and

¶101

documentary evidence or by way of cross-examination of the witnesses of the complainant, the onus would shift on the complainant to satisfy the rebuttal of the accused.

¶102

As stated earlier, it is the case of the accused that the cheque in question was handed over to Mr. Appaji Gowda for security purpose. Merely by taking such a plea, it cannot be termed as rebuttal of the presumption cast in favour of the complainant. The accused has failed to rebut the presumption cast in favour of the

¶103

complainant. Nothing worthwhile is placed on record to believe the version of the petitioner.

¶104

All these aspects have been examined by the trial Court as well as the appellate Court and having not found favour with the contentions putforth and the materials placed on record, both the Courts have rightly rejected the said contentions of the petitioner/accused and rightly passed the impugned judgments of conviction.

¶105

18 -

¶106

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶107

The scope of revision under Sections 397 and 401 of Cr.PC is very limited to the extent of examining the legality, correctness or propriety of any finding, sentence or order and also to see whether there is any patent error committed by both the Courts. Learned counsel for the petitioner has filed I.A. No.1/2024 before this Court for production of additional documents. I am afraid the same cannot be accepted and appreciated in the revision petition and accordingly, the said application is dismissed.

¶108

It is not for this Court to re-evaluate and re-

¶109

analyse the entire evidence on record as this Court is not sitting in the arm chair of an appellate Court to consider

¶110

the matter afresh. However, having perused the materials placed before the Court and the reasoning and finding of both the Courts, I do not find any material irregularity or perversity or patent error in the judgments of conviction and orders of sentence passed by both the Courts. The reasons assigned and the conclusion arrived at by both the Courts are just and proper. The

¶111

19 -

¶112

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶113

petitioner/accused has not made out any ground to interfere with the well-reasoned judgments of conviction rendered by both the Courts.

¶114

At this stage, learned counsel for the petitioner vehemently contends that petitioner is aged about 67 years and there are no antecedents of the similar nature and considering age and avocation of the petitioner and the offence being an economic offence, lenient view may be taken while imposing sentence. Therefore, he seeks for modification of the sentence imposed by the trial Court confirmed by the appellate Court. He also seeks for grant of some more time for payment of the fine amount.

¶115

Considering peculiar facts and circumstances of the case and taking into consideration age and avocation of the accused and the offence being an economic offence, I deem it appropriate to modify the sentence suitably and

¶116

also grant some time for payment of the fine amount.

¶117

20 - NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶118

Accordingly, I answer the points (i) and (ii) raised in this revision petition in the negative. However indulgence is required to be shown in awarding sentence in the following terms:

¶119

O R D E R

¶120

i) Criminal Revision Petition is allowed in part .

¶121

ii) The impugned judgment of conviction dated 27^th August 2015 passed in C.C. No.314/2020 by the Civil Judge (Jr.Dn.) & JMFC, K.R. Pete confirmed in Criminal Appeal No.5022/2015 dated 27^th October 2016 by III Additional District & Sessions Judge, Mandya Sitting at Srirangapana, is hereby upheld and affirmed. However, the sentence imposed by the trial Court and confirmed by the appellate Court is modified .

¶122

iii) The impugned judgments in so far sentencing the petitioner/accused to undergo simple imprisonment for a period of one year is

¶123

21 -

¶124

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶125

hereby set aside . However, insofar as imposing fine of Rs. 12,00,000/- (Rupees twelve lakhs only) and in default of payment of fine to undergo Simple Imprisonment for a period of six months is affirmed .

¶126

iv) The impugned judgments in so far as directing to pay a sum of Rs.11,75,000/- (Rupees eleven lakhs seventy-five thousand) to the complainant as compensation and the remaining amount of Rs.25,000/- (Rupees twenty-five thousand only) to be remitted to the State as per Section 357(3) of Cr.PC, is not disturbed and the same is retained.

¶127

v) This Court accepts the request made by learned counsel for petitioner/accused for grant of some time to pay the fine amount and accordingly eight weeks’ time is granted for payment of the fine amount from the date of receipt of copy of this order. The

¶128

22 -

¶129

NC: 2024:KHC:40326 CRL.RP No. 55 of 2017

¶130

respondent is at liberty to execute the order thereafter.

¶131

vi) I.A. No.1/2024 for production of additional documents stands dismissed as devoid of

¶132

merits.

¶133

Sd/(PRADEEP SINGH YERUR) JUDGE

¶134

Pages - 1 to3 .. LB 4 to end .. GSS

Sri. C. Channegowda v. Sri. B.L. Devaraja

Case brief

What is this about?

What did the court decide?

Sri. C. Channegowda v. Sri. B.L. Devaraja

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Srinivasa Poojary Vs Smt. Sumathi S Amin

Mr.Fatha Ahammed Vs Sri.Balakrishna G.S.

G Krishnappa Vs Kumar

T Sharanesh Vs the State of Karnataka

Smt. Sanivarapu Sudha Rani Vs Sri Chandrappa

Smt. N Nanjamma Vs Smt. Rajamma