Nagaraj S/O Narayan Pitta Vs Madivalappa S/O Gurupadayya Hiremath (Swamy)

MADIVALAPPA S/O GURUPADAYYA HIREMATH (SWAMY), AGE: 48 YEARS, OCC: AGRICULTURE & PETTY BUSINESS, R/O H.NO.27/602, SANDEEP NIVAS, VIDHYASHREE COLONY, BACK SIDE TO JBK HIGH SCHOOL, TQ. BASAVAKALYAN, DIST. BIDAR-585 201.

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…RESPONDENT

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(BY SRI B. K. HIREMATH, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF CR.P.C. (OLD), SECTION 419 OF BNSS (NEW), PRAYING TO SET ASIDE THE JUDGMENT DATED 05.01.2023 PASSED BY

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NC: 2025:KHC-K:5421 CRL.A No. 200044 of 2023

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THE CIVIL JUDGE AND JMFC AT BASAVAKALYAN IN C.C.NO.129/2019 AND CONSEQUENTLY BE PLEASED TO CONVICT THE RESPONDENT FOR THE OFFENCE PUNISHABLE U/S. 138 OF N.I. ACT BY ALLOWING THE CRIMINAL APPEAL.

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THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MRS JUSTICE M G UMA

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ORAL JUDGMENT

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(PER: HON'BLE MRS JUSTICE M G UMA)

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The appellant being the complainant in C.C.No.129/2019 on the file of the learned Civil Judge and

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JMFC, Basavakalyan, is impugning the judgment dated 05.01.2023, dismissing the complaint and acquitting the respondent/accused for the offence punishable under Section 138 of the Negotiable Instruments Act (for short ‘N.I. Act’).

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The facts of the case in brief are that, the appellant herein as complainant has filed the private complaint in P.C.R.No.44/2018 against the accused alleging commission of the offence punishable under

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Section 138 of the N.I. Act. It is alleged by the complainant that, the accused is his friend and he was in need of money during November 2017 for the purpose of payment of school fees of his children and for clearing the debts. When the accused requested for hand loan, the complainant paid Rs.2,00,000/-. The accused undertook to repay the same within three months. When the complainant paid the amount of Rs.2,00,000/- to the accused, one Sri Maruti and one Sri Kumar were present. When the complainant demanded back the amount, the accused issued the cheque as per Ex.P1 for Rs.2,00,000/towards repayment of the loan amount.

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The cheque was presented for encashment. The same was dishonoured, as there was insufficient fund in the account of the accused. Hence, the complainant issued legal notice as per Ex.P3, informing the accused about dishonour of the cheque and calling upon him to repay the cheque amount. Inspite of service of notice, the accused had not repaid the amount and thereby,

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committed the offence punishable under Section 138 of the N.I. Act. Therefore, the complainant filed the private complaint and requested the Trial Court to take cognizance and initiate legal action against the accused.

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The Trial Court took cognizance of the offence and registered C.C.No.129/2019. The accused appeared before the Trial Court, pleaded not guilty and claimed to be tried. The complainant examined himself as PW.1, also examined PW.2 and got marked Exs.P1 to P5 in support of his contention. The accused denied all the incriminating materials available on record and examined himself as DW.1.

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The Trial Court, after taking into consideration all the materials on record, came to the conclusion that, the complainant has not proved the guilt of the accused beyond reasonable doubt. Accordingly, acquitted the

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accused by passing the impugned judgment. Being aggrieved by the same, the complainant is before this Court by filing the present appeal.

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Heard Sri Chaitanya Kumar Chandriki, learned

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counsel for the appellant and Sri B.K. Hiremath, learned counsel for the respondent. Perused the materials on record.

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In view of the rival contentions urged by the learned counsel for both the parties, the point that would arise for my consideration is:

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"Whether the impugned judgment of acquittal passed by the Trial Court suffers from infirmities and calls for interference by this Court?"

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My answer to the above point is in the 'Affirmative’ for the following:

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R E A S O N S

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It is the contention of the complainant that, the

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accused had availed the loan of Rs.2,00,000/- and towards repayment of the same, he had issued the cheque as per Ex.P1. When the cheque was presented for encashment,

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the same was dishonoured, as there was insufficient fund

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in the account of the accused. Inspite of issuance of legal

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notice as per Ex.P3, the accused has not repaid the amount and thereby, he has committed the offence punishable under Section 138 of the N.I. Act.

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To prove his contention, the complainant examined himself as PW.1 and reiterated his contention as taken in the complaint. During cross-examination, witness asserted that, Ex.P1 is the cheque issued by the accused and it is in his handwriting. Witness stated that, initially,

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the accused had issued a blank cheque as security. Later,

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he had taken back the same. Subsequently, he issued Ex.P1. Witness also stated that, he had presented the cheque-Ex.P1 for the first time on 26.06.2018, but the cheque was dishonoured. The accused asked him to wait for some time and present the cheque once again. Accordingly, he waited for two months and presented the cheque once again for encashment. But, even then the cheque was dishonoured, as there was in sufficient fund. Witness admitted that, when the cheque was dishonoured

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for the second time, he had not issued any legal notice, but requested the accused to repay the cheque amount. But, Ex.P2-the return memo is dated 29.08.2018 and the legal notice-Ex.P3 is dated 11.09.2018. Obviously, these documents were after the cheque was presented for the second time as contended by the complainant. Multiple presentation of the cheque is not barred under the provisions of the N.I. Act.

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The tenor of cross-examination of PW.1 by the learned counsel for the accused discloses that, the accused was doing B.C. business. The complainant was the member of the chit fund and had taken the blank cheque from the accused. The same was filled in and presented for encashment. Witness denied the suggestion that, when

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the cheque was dishonoured for the second time, no notice was issued to the accused.

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The complainant examined PW.2 – Shashatte. He has filed his affidavit in lieu of examination-in-chief and stated that, the accused is his friend and that he is a

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businessman. During November 2017, the accused availed the loan of Rs.2,00,000/- from the complainant. Towards repayment of the same, he had issued the cheque. The cheque in question was presented by the complainant for encashment, but the same was dishonoured. During crossexamination, witness asserted that, it was the accused, who had filled up the cheque and gave it to the complainant. He denied the suggestion that, the accused had issued the cheque as security. He denied the suggestion that, the accused had issued two blank cheques and the same were misused by the complainant.

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The accused has examined himself as DW.1. He has reiterated his defence that, he was running the B.C. business and the complainant being the member of said business had taken a blank cheque and the same was misused. During cross-examination, the witness has taken an inconsistent defence stating that, the cheque-Ex.P1 belongs to his Bank account and it bears his signature. However, the same was found missing. Complainant has

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misused the same. Witness has even gone to the extent of saying that, he had filed the complaint with the Bank regarding missing of his cheque. No such materials are produced before the Court. Strangely, it is not the contention of the accused that, the cheque-Ex.P1 was stolen by the complainant. During cross-examination of PW.1 or PW.2 or even while filing the affidavit in lieu of examination-in-chief, the accused has not taken such defence.

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When the accused admits that Ex.P1-cheque belongs to his Bank account and it bears his signature, the presumption under Sections 118 and 139 of the N.I. Act would arise and the burden shifts on the accused to rebut the legal presumption. When the accused has taken inconsistent defence, which cannot be reconciled with one another, it is to be held that, the accused has not rebutted the legal presumption.

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To highlight the position of law on the subject, I may refer to the decision of the Hon’ble Apex Court in

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Bir Singh Vs. Mukesh Kumar¹ , where the Hon’ble Apex Court referred to its various decisions on the subject and

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held in paragraph Nos.33, 34 and 36 as under:

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“33. A meaningful reading of the 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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34. If a signed 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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35. xxxxx

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1 (2019) 4 SCC 197

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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 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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The Hon’ble Apex Court again in APS Forex Services Pvt. Ltd. Vs. Shakti International Fashion

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Linkers and Others² , reiterated the settled position of law and rejected the defence taken by the accused that

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cheque in question was issued as security and he is not liable for conviction under Section 138 of the N.I. Act.

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The Hon’ble Apex Court in M/s. Kalamani Tex and Another Vs.

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P Balasubramanian³ , referring to its earlier decisions

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including its decision in Bir Singh (supra ) , reiterated the position of law that, issuance of blank cheque voluntarily singed and handed over by the accused which is towards

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2 AIR 2020 SC 945

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3 (2021) 5 SCC 283

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some payment would attract the presumption under

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Section 139 of the N.I. Act, which includes the existence of legally enforceable debt.

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In view of the above, the position of law is very

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well settled that, when the accused admitted issuance of cheque-Ex.P1 with his signature and later takes inconsistent defence, it cannot be said that he has discharged the burden of rebutting the legal presumption. Hence, the accused is liable for conviction.

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I have gone through the impugned judgment of acquittal passed by the Trial Court. The Trial Court has noticed Exs.P1 and P2 and came to the conclusion that, the cheque was presented for encashment with State Bank of India through the collecting banker i.e., Axis Bank. Under such circumstances, Ex.P2 could not have been issued by State Bank of India. I do not find any logic in the opinion formed by the Trial Court. Even according to the complainant, he was having the Bank account with Axis Bank and presented the cheque-Ex.P1 through the said

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Bank. On dishonour of the cheque, State Bank of India has issued the return memo specifically mentioning that, the cheque was presented through Axis Bank. Moreover, the complainant in the legal notice-Ex.P3 categorically stated that, under the core-Banking system, the Bank has issued the memo dated 29.08.2018 regarding dishonour of the cheque. When the documents support the contention of the complainant, minor inconsistency in Ex.P3 cannot lead to dismissal of the complaint.

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The Trial Court appears to have found fault with the complainant for having presented the cheque twice. The N.I. Act does not bar multiple presentation of the cheque, if the same is within the period of validity of the cheque. Simply because PW.1 stated that, he had presented the cheque for the first time and the same was dishonored, and later, he presented it again, will not invalidate the cheque. Even though the accused has taken

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a specific defence that he had issued a blank cheque in favour of the complainant, later he categorically admits

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issuance of the cheque-Ex.P1 with his signature. Even if it is a blank cheque, Section 20 of the N.I. Act authorizes the

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holder of the cheque to fill in the contents of the cheque and present the same for encashment.

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The Trial Court. committed an error in acquitting the accused on flimsy grounds. Accordingly, the said judgment of acquittal calls for interference by this Court.

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Heard regarding sentence.

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In view of the above, I answer the above point

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in the affirmative and proceed to pass the following:

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ORDER

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(i) The appeal is allowed .

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(ii) The impugned judgment dated 05.01.2023 passed in C.C.No.129/2019 on the file of the learned Civil Judge and JMFC, Basavakalyan, acquitting the accused for the offence punishable under Section 138 of the N.I. Act is hereby set aside.

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(iii) Consequently, the respondent/accused is convicted for the offence punishable under Section 138 of the N.I. Act.

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(iv) The respondent/accused is sentenced to pay fine of Rs.3,50,000/- within three months from today to the complainant. In default to pay fine, he shall undergo simple imprisonment for a period of one year.

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(v) Out of the fine amount 3,40,000/- is to be paid as compensation to the appellant.

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Registry is directed to send back the Trial Court

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records along with the copy of this judgment for information and needful action i.e., for issuance of the conviction warrant against the accused, if he fails to pay the fine amount within the time stipulated.

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Sd/(M G UMA) JUDGE

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LG

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List No.: 1 Sl No.: 20

Nagaraj S/O Narayan Pitta v. Madivalappa S/O Gurupadayya Hiremath (Swamy)

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Nagaraj S/O Narayan Pitta v. Madivalappa S/O Gurupadayya Hiremath (Swamy)

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