Dismissed

Kamsetty Chenna Kesavulu, v. Dende Srinivasa Rao

Telangana HC24 Aug 2017CRLRC/1261/2005

Case brief

AI extract

What is this about?

This revision petition challenging a conviction under Section 138 of the Negotiable Instruments Act was dismissed. The High Court held that a blank signed cheque does not absolve liability if it is filled by the bearer, and since statutory presumptions regarding consideration and enforceable debt were not rebutted, the conviction stands.

What did the court decide?

Criminal Revision Case No.1261 of 2005 was dismissed.

Kamsetty Chenna Kesavulu, Vs Dende Srinivasa Rao — Cheque Dishonour | Telangana HC (2017)

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HON'BLE SRI JUSTI CE M. SATYANARAYANA MURTHY CRI MI NAL REVI SI ON CASE No.1 2 6 1 of 2 0 0 5

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JUDGMENT:

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The accused in C.C.No.27 of 1999 on the file of Judicial Magistrate of First Class, Special Mobile Court, Ongole and Appellant in Crl.A.No.96 of 2002 on the file of I Additional District and Sessions Judge, Ongole, Prakasam District, preferred this Revision under Sections 397 and 401 Cr.P.C. challenging the concurrent findings recorded by the trial Court and Appellate Court having found him guilty for the offence under Section 138 of NI Act.

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The complainant/ Dande Sreenivasa Rao filed a private complaint under Section 200 Cr.P.C., for the offence punishable under Section 138 of NI Act, alleging that the accused borrowed Rs.1,00,000/ - from him on 16.08.1995 and executed a promissory note under Ex.P.1 agreeing to repay the same together with interest at 24% per annum. Towards discharge of the debt, the accused issued a Cheque on 20.07.1998 for Rs.1,70,000/ - vide Ex.P.2 drawn on Bank of Baroda, Ongole, and on its presentation, the cheque was returned with an endorsement ‘ the cheque is dishonoured for insufficient funds and non-operation of account’ thereafter he issued a Notice dt.29.07.1998 calling upon the accused to pay the amount covered by dishonoured cheque within 15 days from the date of receipt of the Notice, but the accused did not pay the amount and hence, he filed a complaint before the Court.

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The trial Court after completion of trial and upon hearing both the counsel, found the accused guilty for the offence under Section 138 of NI Act and sentenced him to undergo RI for a period of one year and to pay fine of Rs.1,000/ - with default sentence, which was

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confirmed by the Appellate Court in Crl.A.No.96 of 2002, disbelieving the contentions raised by the appellant before the trial Court and the Appellate Court.

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Aggrieved by the Calendar and Judgment in Crl.A.No.96 of 2002, the present revision is filed on two grounds; (1) the Appellant issued blank cheque to the complainant for the purpose of a chit transaction, which would not constitute any offence under Section 138 of NI Act, and (2) the complainant failed to discharge the initial burden that the cheque was issued towards legally enforceable debt and prayed to set aside the same as the trial Court and Appellate Court failed to consider these two contentions on proper perspective.

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Though the present revision was filed by the petitioner/ accused represented by his counsel, Sri I. Koti Reddy, neither appeared before this Court nor got it represented through any other counsel. In such case, this Court cannot dismiss the Criminal Revision Case for default. But, the Court can decide the revision verifying the material available on record, in Mish a Sh ar m a v. Vin od Ku m ar Sh ar m a¹ , wherein it is made clear that a revision petition cannot be dismissed for default. Even if the petitioner or his advocate does not appear the court shall examine the record and decide the revision on merits.

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Persuaded by the law declared by the Delhi High Court, I would like to proceed with the matter after verifying the material available on record.

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There is no dispute regarding issuance of cheque vide Ex.P.2 dt.20.07.1998 for Rs.1,70,000/ -, but only the contention before this Court is that the cheque was issued towards a chit transaction.

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1 1990 Cr.LJ. (NOC) 57 (Del.)

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Factum of issuing cheque is not in dispute, but his contention is that it is a blank signed cheque. When the Appellant contended that he issued a blank signed cheque, it is for him to establish the same by adducing evidence. However, Ex.P.2 is only a stamped in cohate document under Section 20 of NI Act and the bearer of the cheque is entitled to fill the blanks and present the cheque in the name of any person and it is nothing but authorization given to the bearer of the cheque.

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The same question came up before a division Bench of this Court in Du ggin en i Sesh agir i Rao Vs. Kot h apalli Ven k at esw ar a Rao² . This Court in para 6 of the Judgment held as follows:

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“ Fou r t h in gs ar e n ecessar y for an in st r u m en t t o be a pr om issor y n ot e: 1 ) I t sh ou ld be in w r it in g; 2 ) I t sh ou ld h ave an u n con dit ion al u n der t ak in g; 3 ) I t sh ou ld be sign ed by t h e m ak er ; an d 4 ) it sh ou ld be in favou r of cer at in per son or t o a bear er .

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Sect ion 2 0 m ak es in ch oat e st am ped in st r u m en t s legal in st r u m en t s. Th e dict ion ar y m ean in g of ‘in ch oat e’ is ‘in com plet e’. So, in com plet e st am ped in st r u m en t s ar e as good as t h e in st r u m en t s m en t ion ed in Sect ion 4 of t h e Act . Even if on e look s t o t h e defin it ion of t h e ‘pr om issor y n ot e’ u n der Sect ion 4 , on e w ou ld fin d t h at t h e r equ ir em en t s for m ak in g an in st r u m en t a pr om issor y n ot e do n ot con t ain t h e r equ ir em en t of n am in g a per son , it can be given in favou r of a cer t ain per son or t o bear er of t h e in st r u m en t . Th at m ak es it clear t h at , on e w h o is h oldin g t h e docu m en t is t h e per son w h o der ives r igh t s ou t of t h at in st r u m en t . I n ot h er w or ds, it w ou ld m ean t h at t h e d ocu m en t w it h fir st t h r ee r equ ir em en t s as st at ed above, sh ou ld be deliver ed t o t h e pay ee, on ce it is deliv er ed it becom es a pr om issor y n ot e. Nam e an d ot h er par t icu lar s can be filled u p even at a lat er st age. W h en on e r eads Sect ion 4 in con j u n ct ion w it h Sect ion s 2 0 an d 4 2 t h at is t h e on ly in t er pr et at ion t h at can be placed on t h e m ean in g of ‘pr om issor y n ot e’ u n der Sect ion 4 of t h e Act . Sect ion 2 0 lay s dow n t h at w h en a per son sign s an d deliver s t o an ot h er per son a paper st am ped in accor dan ce w it h law r elat in g t o n eg ot iable in st r u m en t it becom es a n egot iable in st r u m en t even if it is w h olly blan k or w r it t en w it h in com plet e par t icu lar s. Sim ilar ly , Sect ion 4 2 even r ecogn izes in st r u m en t issu ed in t h e n am e of fict it iou s per son t o be a valid in st r u m en t . Alt h ou gh Sect ion 4 2 r elat es t o bills bu t it also accept s t h at an accept or of a bill of ex ch an ge even if it w as in dr aw n in a fict it iou s n am e it w ou ld cr eat e a gen u in e claim in favou r of t h e h older . Th er efor e, even if a n egot iable in st r u m en t is in com plet e it w ou ld be a legal in st r u m en t pr ovided it sat isfies t h e fir st t h r ee con dit ion s.

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Holder of t h e in st r u m en t becom es a bear er of t h e in st r u m en t .”

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2 2001(6) ALT 95 (D.B.)

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Their Lordships further held as follows:

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“ Th e plain t iff h ad been able t o pr ove t h e ex ecu t ion of t h e docu m en t . On t h e ot h er h ad, if t h e docu m en t w as dispu t ed or dou bt ed t h e on u s w as on t h e defen dan t t o sh ow t h at t h e docu m en t w as a for ger y becau se a pr esu m pt ion is in favou r of plain t iff u n der Sect ion 1 1 8 of t h e Negot iable I n st r u m en t s Act .”

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In view of the law declared by this Court, issuance of a blank signed cheque would not absolve his liability under Section 138 of NI Act. Therefore, this contention holds no substance in the present revision.

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The Appellant herein executed Ex.P.1—Promissory Note borrowing an amount of Rs.1,00,000/ - and he did not deny the execution of the promissory note in the entire grounds of revision. When a promissory note was admittedly executed, the Court is bound to drawn a presumption under Section 118 of NI Act that the promissory note is supported by consideration though it is a rebutable presumption and the initial onus of proof is on the promissor, he may rebut such presumption by placing independent evidence or eliciting anything in the cross examination of prosecution witnesses. But failed to rebut statutory presumption under Section 118 of NI Act. Apart from that, if issuance of cheque is admitted or proved, the Court shall draw a presumption under Section 139 of NI Act to the effect that the cheque was issued towards legally enforceable debt or liability. In these circumstances, the initial onus of proof is on the Appellant/ accused to rebut these two statutory provisions under Sections 118 and 139 of NI Act by adducing evidence. Obviously, for different reasons, the Appellant did not adduce any independent evidence, to rebut those presumptions or could elicit anything in the cross examination on complainant’s witnesses. Therefore, based on the unrebutted presumption and the evidence on record, the trial

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Court and the Appellate Court recorded a fact finding that the cheque was issued towards discharge of legally enforceable debt or liability under Ex.P.1 Promissory Note. Even in the revision, nothing is brought to this Court to interfere with the concurrent fact findings recorded by the trial Court, confirmed by the Appellate Court.

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The jurisdiction of this Court under Section 397 and 401 Cr.P.C. is Limited. Section 401 Cr.P.C confers a kind of paternal and supervisory jurisdiction on the high Court, over all other criminal Courts established in the state in order to correct miscarriage of justice arising from a misconception of law, irregularity of procedure, neglect or apparent harshness of treatment which has on the other hand resulted in some injury to the due maintenance of law and order or, on the other hand, in some undeserved hardship to individuals. The revisional power conferred on the High Court by this Section is discretionary power, has to be exercised in the aid of justice and this Court will not exercise jurisdiction under this Section if there has been no failure of justice even though the proceedings of the lower Court suffer from irregularity or impropriety as held by Apex Court in St at e of W est Ben gal v . Tu lsidas³ . The revisional jurisdiction conferred upon this Court by Section 401 Cr.P.C. has to be exercised only for the purpose of relieving persons who have not had a fair trial or whose convictions have been arrived at by non observance of material provisions of the law or by such mis-directions as must have occasioned a failure of justice, as held in Pr ah lad v. Em por er⁴ . Further, the High Court can, in exercise of its revisional powers, either suo motu on the basis of its own knowledge derived from any source

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3 (1964) 1 Crl.L.J.443 (SC)

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4 48, Crl.L.J.173,174(pat)

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whatsoever, or on an application by a complainant, exercise the powers of an appellate Court both with respect to acquittal and conviction. This revisional power is subject to the following three limitations:

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Firstly, no order can be made to the prejudice of the accused or other person unless he had an opportunity of being heard personally or by a pleader in his own defence;

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Secondly, it cannot convert a finding of acquittal into one of conviction;

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Thirdly, no revision can be entertained at the instance of a party who could have appealed under the Code and has not appealed.

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Thus, the powers of the High Court are limited, this Court cannot interfere with the concurrent fact findings recorded by the Courts below. As a general rule, the High Court will not in revision interfere with a finding of fact and this is specially so, where there are concurrent findings of facts of the lower Courts. But in special and exceptional circumstances, the High Court is entitled to go into questions of fact and do justice, though the power should be rarely exercised as held by the Apex Court in S.P.S.Jay am an d Com pan y V. Neh r u sadan⁵ .

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In revision, the High Court usually accepts the findings on questions of facts recorded by a subordinate Court unless the finding is manifestly perverse or patently erroneous in view of the law declared by the Apex Court in Ban silal v . Lax m an⁶ .

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In view of the limited jurisdiction of this Court, I am unable to interfere with the fact findings recorded by the trial Court, confirmed

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