C Prakash Somayaji Vs R. Ravi

R. RAVI AGED ABOUT 72 YEARS, S/O S K RAMACHANDRAN, PARTNER OF SPECTRO COLOURS, NO.C-143, INDUSTRIAL ESTATE, YADAVAGIRI, MYSURU, REPRESENTED BY HIS GPA HOLDER H N RENUKA, S/O LATE NANJA NAYAKA, AGED ABOUT 45 YEARS, NO.C-143, INDUSTRIAL ESTATE, YADAVAGIRI, MYSURU-570020

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…RESPONDENT

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(BY SRI.K.KRISHNA PRASAD, ADVOCATE)

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THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 29.09.2020 PASSED BY THE I ADDITIONAL SESSIONS JUDGE, MYSURU IN CRL.A.NO.54/2019 CONFIRMING THE JUDGMENT OF CONVICTION AND ORDER DATED 17.01.2019 PASSED BY THE IV ADDITIONAL FIRST

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CIVIL JUDGE AND JMFC AT MYSURU IN C.C.NO.803/2017 BY ALLOWING THIS CRL.RP.

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THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 09.04.2025, THIS DAY ORDER WAS PRONOUNCED THEREIN AS UNDER:

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CORAM: HON'BLE MS JUSTICE J.M.KHAZI

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CAV ORDER

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In this Criminal Revision Petition, petitioner who is arraigned as accused has challenged his conviction and sentence imposed by the trial Court for the offence punishable under Section 138 of Negotiable Instrument

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Act ('N.I Act' for short), which came to be confirmed by the Sessions Court by dismissing the appeal filed by him.

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For the sake of convenience, parties are

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referred to by their ranks before the trial Court.

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Complainant filed a complaint against accused contending that he is a manufacturer of Urea Formaldehyde raisin at Mysuru. Accused used to purchase the said product for his business of manufacturing of plywood and black board, etc. Towards discharge of a sum of ₹8,58,765/- due towards purchase of the product on the

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credit basis, accused issued cheque number 619301 dated 15.08.2006 drawn on Karnataka Bank, Buntwala, with an assurance that on presentation, it would be honoured. However, on 27.11.2006 when complainant presented the cheque for encashment, it was dishonoured for want of sufficient funds as per endorsement dated 01.12.2006. He has received the endorsement from his banker on 07.12.2006. In this regard, complainant got issued legal notice to the accused calling upon him to pay the amount due under the cheque. Instead of paying the amount, he has a sent an evasive reply and hence the petition.

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Accused appeared through counsel and

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contested the case by pleading not guilty.

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In order to prove his case, complainant

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examined his Power of Attorney holder as PW-1 and relied upon Exs.P1 to 52.

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

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He has also given evidence as DW-1 and relied upon Ex.D1 to 4.

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The trial Court convicted the accused and

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sentenced him to pay a sum of ₹8,68,765/- as fine with the default sentence.

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Aggrieved by the same, accused filed

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Crl.A.No.54/2019 before the Sessions Court, which came to be dismissed, confirming the judgment and order of the trial Court.

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Aggrieved by the concurrent findings of the

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trial Court as well as the Sessions Court, the accused is before this Court contending that the same are contrary to law and evidence on record. They have failed to appreciate that the cheque in question was issued during 1995–96 and date has been inserted by the complainant to suit his convenience and there are material alteration in the cheque and as such, it is void under Section 87 of N.I Act.

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The Courts below have also failed to

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appreciate that in CC.No.215/2006, it is suggested to the accused that cheque No.619301 has been issued by the accused in February 1996. As on the date of the cheque i.e., 15.08.2006 said to have been issued, there was no legally enforceable debt or liability.

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PW-1 Priyanka V.S, the Power of Attorney holder of the complainant was not present when the transaction took place and she has no personal knowledge. Complainant has not chosen to enter the witness box and give evidence and therefore adverse inference is required to be drawn. M/s Spectro colours in whose favour cheque is issued is not the complainant. The legal notice is also not sent on behalf of M/s Spectro colours.

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In support of his arguments, learned counsel

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for petitioner has relied upon the following decisions:

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(i) Milind Shripad Chandurkar Vs. Kalim M. Khan and Anr.( Milind Shripad Chandurkar )¹

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1 2011 AIR SCW 1773

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(ii) Janki Vashdeo Bhojwani and Anr. Vs. Indusind Bank Ltd. and Ors.( Janki Vashdeo Bhojwani )²

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(iii) A.C.Narayanan Vs. State of Maharashtra & Anr. ( A.C.Narayanan)³

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(iv) K V Subba Reddy Vs. N Raghava Reddy. (K V Subba Reddy)⁴

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(v) Sasseriyil Joseph Vs. Devassia (Sasseriyil Joseph)⁵

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(vi) M/s Jage Ram Karan Singh & Anr Vs State & Anr (Jage Ram Karn Singh)⁶

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(vii) Sai Accumulator Industries Sangamner Vs. M/s Sethi Brothers Aurangabad (Sai Accumulator)⁷

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(viii) Director Maruti Foods and Farms Vs. Basanna Pattekar (Maruti Foods and Farms)⁸

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(ix) Anil Gupta Vs. Star India Pvt. Ltd and Anr (Anil Gupta)⁹

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On the other hand, learned counsel representing

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complainant would submit that since the cheque is drawn on the account of the accused and it bears his signature and on presentation came to be dishonoured for want of sufficient funds, presumption is operating in favour of the complainant

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2 (2005) 2 SCC 217

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Crl.A.No.73/2007 dated 28.01.2015

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Crl.A.No.545/2010 dated 28.02.2014

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5 2001 CriLJ 24

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6 Crl.Rev.P No.82/2013 dated 31.07.2019

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7 Crl.A.No.426/2003 dated 22.04.2016

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8 Crl.A.No.1780/2006 dated 05.06.2007

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9 AIR 2014 SUPREME COURT 3078

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and it is for the accused to prove that the cheque is not issued towards repayment of any legally recoverable debt or liability and establish the circumstances in which it came to reach the hands of complainant. He would further submit that the presumption also include that the cheque is issued towards legally recoverable debt or liability, the burden is on the accused to prove otherwise. Both the trial Court and Sessions Court on appreciation of the oral and documentary evidence placed on record have come to a correct conclusion and while exercising power under Section 397 Cr.P.C, this Court has no jurisdiction to set aside the concurrent findings and pray to dismiss the petition.

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Heard arguments and perused the record.

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Having regard to the fact that accused admit

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that the cheque in question is drawn on his account and it bears his signature and on presentation, it is dishonoured for want of sufficient funds, the presumption under Section 139 of the N.I Act that the cheque was issued towards discharge in whole or in part, of any legally recoverable debt or liability, placing the initial burden on the accused to rebut

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the same. Only after the accused rebut, the presumption, the burden shifts on the complainant to prove his case.

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Thus, it is the definite case of the complainant that Somayaji Board Products, of which accused is the partner has purchased Urea Formaldehyde raisin from Spectro Colours, of which complainant is one of the partner, on credit basis and towards repayment of a sum of ₹8,58,765/- issued the subject cheque, drawn on his personal account. However, when presented it was dishonoured for want of sufficient funds, giving rise to criminal liability under Section 138 of the N.I Act.

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Though in the reply notice as well as during the cross-examination of PW-1 in as much as during His examination-in-chief, accused has disputed that his firm used to purchase the Urea Formaldehyde rasin, which is used in the manufacturing of Black Board products, during his cross-examination, he has admitted the said fact. He has also admitted that when the said product was purchased, the Spectro Colours used to issue Invoices and credit bills similar to Exs.P10 to 50. Though the accused has deposed that

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nothing is due from Somaiyaji Board Products to the Spectro Colours, admittedly, the accused has not produced any documents maintained by the said firm to show that all the payments have been made and nothing is due from their firm to the Spectro Colours.

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The accused has taken a defence that he was having some dealings with one Ramachandra and in the respect of property of Anekolathamathi of Mercara, he had issued the subject cheque along with the DP Note in 1997 and in turn, the said Ramachandra had also issued a DP note to the accused. Later, the underworld Don Muthappa Rai collected cheque No.302 from him during 1997 and in this regard, he has filed a complaint in Cr.No.56/2006 of GoniKoppa PS. Later Ramachandra also collected cheque No.303 and 304 from the accused when he requested Ramachandra to return cheque Nos.301, 303, 304, Ramachandra informed him that he has lost the said cheques and accused can keep the DP note given by Ramachandra. The accused has alleged that these cheques were presented

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through the complainant and others and on their dishonour, cases have been filed against the accused.

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Admittedly, accused has not filed any criminal complaint against the said Ramachandra that he has not returned the cheques. Though the accused has claimed that he filed complaint against Muthappa Rai, he has not produced any evidence to the said effect. The least the accused could have done was to inform his Bank about these transactions and instruct it not to honour them. Admittedly, the accused has not done so. Therefore, he has failed to prove his defence.

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It is contented by the accused that the subject cheque was collected from him during 1997 and the same have been utilised during during 2006 and as such there is material alteration and it is void under Section 87 of N.I Act. The term material alteration is not defined in N.I Act. The grammatical meaning of the term alteration is the action or process of altering or being altered, which pre-suppose that something which was already there was altered to something else. A material alteration of a cheque is any change that

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alter the effect of the instrument, potentially affecting the rights and obligations of the parties involved.

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As per Section 87 of the N.I Act, generally Such alteration renders the instrument void against those who have not consented to the change. The common examples include altering the date, amount or payee etc. Admittedly, in the present case, there are no overwriting

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either in the name of the payee or the date or amount. It appears the cheque when given by the accused was a blank cheque and is filled subsequently or the accused is taking a false defence that when he issued it, it was blank. In the absence of any overwriting or corrections, it is not a case of material alteration.

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The accused has also taken a defence that since

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the cheque was taken from him during 1999, a complaint filed during 2006 is barred by limitation. As per Section 118 of N.I Act, which deals with presumptions unless and until the contrary is proved, the following presumption shall be made:-

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(a) of consideration - that every negotiable instrument was made to drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

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Thus, as per Section 118 (b) it shall be presumed that every negotiable instrument bearing a date was made or drawn on such date. Since Ex.P2 bear the date 15.08.2006, it shall be presumed that it was issued on that date, unless the contrary is proved. Though the accused has contended that Ramachandra and Muthappa Rai extracted cheques from him during 1999, he has failed to prove the same. Even though as per Ex.P51, which is the deposition of accused in C.C.No.215/2006, which was one more complaint filed against the accused by one V.Sridhar for the offence punishable under Section 138 of N.I Act, a suggestion is made on behalf of the complainant that cheque No.619301 and some of the other cheques in the said series were issued was issued during 1996 and 1997.

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Having regard to the fact that the subject cheque was issued blank and there is no alteration in the

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date or name of the pay or amount, in the light of presumption under Section 118(b), it is to be presumed that the Ex.P2 cheque was issued on the date mentioned in the said cheque. Therefore, on the ground that the subject cheque was issued in 1996 and therefore the alleged transaction is barred by limitation cannot be accepted.

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The next question to be determined is whether despite the fact that the subject cheque is dated 15.08.2006 and the complaint was filed on 07.02.2007, whether the transaction in respect of which it came to be issued is barred by limitation. Through the complaint, the testimony of PW-1 and the documentary evidence placed on record, complainant has proved that the partnership firm Somayaji Board Products, of which accused is one of the partner used to purchase Urea Formaldehyde raisin, which is used in the manufacture of black board products and towards repayment of the dues issued the subject cheque at Ex.P2. In order to establish that the said firm used to make purchase on credit basis, complainant has relied upon Exs.P 10 to 50 which are invoice and credit bills. These documents commences from

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02.05.1995 to 15.03.2000. Admittedly, the subject cheque at Ex.P2 is dated 15.08.2006. In other words by the time the complaint came to be filed in 2007, the transaction in question was barred by limitation. Had the subsequent transactions continued covering the limitation period things would have been different. Therefore, through Exs.P10 to 50 itself, the accused has established that the transaction for which Ex.P2 came to be issued is barred by limitation and thereby he has rebutted the presumption that the cheque was issued towards repayment of legally recoverable debt or liability.

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The trial Court as well as the Sessions Court have not examined this aspect and fell into error by convicting the accused. The impugned orders have caused gross miscarriage of justice. It has led to manifest legality and as such liable to be interfered within exercise of revisionary jurisdiction by this Court. In the result, petition succeeds and accordingly the following:

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ORDER

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(i) Petition filed by the accused under Section 397 of Cr.P.C is hereby allowed.

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(ii) The impugned judgment and order dated 29.09.2020 in CC No.803/2007 on the file of IV Additional I Civil Judge and JMFC, at Mysuru and order dated 29.09.2020 in Crl.A.No.54/2019 on the file of I Additional Sessions Judge, Mysuru, are set aside.

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(iii) Consequently, the accused is acquitted of the offence punishable under Section 138 of N.I Act. His bail bond stand discharged.

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(iv) The accused is entitled to withdraw the deposit if any made before the trial Court as per the orders of the Sessions Court and/or this Court as the case may be.

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

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Sd/(J.M.KHAZI) JUDGE

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RR List No.: 1 Sl No.: 13

C Prakash Somayaji v. R. Ravi

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C Prakash Somayaji v. R. Ravi

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