Allowed

R.Konda Reddy v. Mrs.Y.Sailajarani and another

Telangana HC14 Sept 2022CRLA/753/2018

Case brief

AI extract

What is this about?

High Court allowed criminal appeal against acquittal in Section 138 NI Act case. Bench held co-borrower not necessary party to prosecution and defence failed to rebut presumption under Section 139 regarding cheque issued for debt.

What did the court decide?

Accused convicted of section 138 NI Act, sentenced to fine of Rs. 5,20,000/-; default leads to six months simple imprisonment; Rs. 5,00,000/- to be paid to complainant.

R.Konda Reddy Vs Mrs.Y.Sailajarani and another — Cheque Dishonour | Telangana HC (2022)

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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WEDNESDAY, THE FOURTEENTH DAY OF SEPTEN/BER TWO THOUSAND AND TWENTY TWO

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PRESENT

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THE HONOURABLE SRI JUSTICE N.TUKARAMJI

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CRIMINAL APPEAL N O: 753 OF 20'18

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Between

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R.KONDA REDDY,S/o. Late R. Rayappa Reddy, Aged about 58 years, Occ Business, R/o. Plot No.'168, Sripuram Colony, Malakpet, Hyderabad.

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.APPELLANT/COMPLAI NANT

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AND

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MTS.Y.SAILAJARANI W/o Mr. S. Udaya Bhaskar, Aged about 52 years, Occ: Bank employee, R/o. H.No.'17-1-389/48, Prasanth Nagar, Saidabad, Hyderabad-500 059.

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.,.RESPONDENT/ACCUSED

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The State of Telangana, Reptd by the Public Prosecutor, High Court at Hyderabad.

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...RESPONDENT/RESPONDENT

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Crrminal Appeal under Section 378(4) of Cr.P.C against the judgment made in C.C.No. 49 of 2014 dated 16-03-2017 on the file of the Court of the XIV Additional Judge cum XVlll Additional Chief Metropolitan Magistrate, Era.nanzil, Somajiguda, Hyderabad.

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Counsel for the Appellant: SRl. K. RAMESH/BABU

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Counsel for the Respondent No. 2: The Public Prosecutor

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The Court made the following: JUDGMENT

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THE HONOURABLE SRI JUSTICE N. TUKARAMJI

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CRIMINAL APPEAL No.753 of 2O18

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ORDER:

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This complainant's appeal is directed against the judgment of acquittal under Section 138 of the Negotiable Instruments Act, 188 1(for short, 'the NI Act') in C.C.No.49 ot 2014 passed by the XIV Addl. Judge-cr-rm-XvllI Addl. Chief Metropolitan Magistrate, Erram Manzil, Hvderabad.

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The brief facts of the complainant's case are that due to acquaintance ald friendship the accused and her husband approached him in the month ol May, 2Ol2 for hand loan and on 2I.O5.2012, he advanced Rs.5,00,00O/- '"vith an agreement to repay the saici amount along rvith interest at l\ok per annum, under the promissorv note / Ex. P 1 . Therea-fter, the repayment was neglected

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Hor.l,ever, on repeated demands, the accused had issued the cheque bearing No.333236 dated 19.04.2014 drawn on State Bank of India, B ar-rk Street, Koti, Hyderabad/Ex.P2 for an amount of Rs.5,00,O00/- towards principal loan amount. On presentment, the cheque I Ex. P2 was returne<i unpaici on

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22.O1.2014 u'ith^{an endorsement as "FunclsInsufficient"under} the Cheque Return^{Memo/Ex.P3.Thereupon, he got issued} statutory notice/Ex.P4^{dated02.O5'2014 and senton} 03.05.2014 to the^{accusedunder the postalreceipt/Ex'P5,the} same was received^{by the accused on 10'O5'2014 under the} Acknou4edgement/Ex.P6.^{However,the accusedneitherpaid} the cheque amount^{nor replied,thus, the complaintunder} Section 138 of^{the NI Act.}

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The trial Court had^{takencognizanceof the matter and} after examination^{under Section 251 of Cr'P'C'proceeded lvith} trial as the accused^{pleaded not guilty'During trial'the} complainant^{got examined himself as PWl and marked Exs'P1 to} P6 and on the other^{hand, the accused got examinedherself as} DW1 and marked^{cash deposit slips ofOriental Bank of} Commerce dated 06.ll.2Ol2,^{1.4'll'2012,07'O1'2013'} 28.06.2013 l9xs.Dl^{to D4-}

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The trial Court^{after analyzing the evidence by observing} that as the husband^{of the accused was not made as party to the} proceedings and that the^{alleged transactionand the legally} enforceable debt^{were not established,acquitted the accusedby} dismissing the^comPlainant.

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i\TR.J a[l.r 7i] l0lS

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a) Aggrieved thereb]' the complainant/appellant (hereinafter 'the complainant') in the appeal contested that the tria-l Court ought to have observed that there are financial deatings between the complainant, the respondent (hereinafter,^,the accused,) and her husband. A civil suit for recovery of money lvas also pending against the accused's husband. Further, the cash deposit slips/Exs.D 1 to D4 are in any r,vay be the basis to draw any conclusion that the complainant referred promissory note and cheque/Exs.Pl and P2 were pressed into service. Further, explained that the Exs.D 1 to D4 are pertaining to the transaction between the complainant and the husband of the accused

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b) That apart, the trial Court had misconstrued the provision of Section 138 of the NI Act by observing both the borrowers of promissory note shall be made parties to the proceedings and complaint is bad for non-joinder of parties. Furthermore, the accused except claiming that the loan of Rs. 1,00,O00/ - was obtained in 2Oll at lOok interest per month, failed to establish either the transaction or the payments of amount under Exs.D1 to D4 are regarding the earlier event. Thus the conclusion of the Tribunal that, the borrowed amount was repaid ald there is no

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legall1. enforceable debt, thereby shifting onus onto^the complainant inspite of the accused's categorical admission^of signature on the cheque lEx.P2 is unjust and not maintainable.

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Inspite of due notice, the respondent/ accused choose to remain silent

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B. In this position the point that arises for determination is

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Whether the complainant is able to establish the guilt of the respondent/ accused under Section 138 of the NI^Act beyond reasonable doubt?

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9 . The complainalt reiterated the pleadings of the complaint in his chief af{ldavit. The accused in cross-examination specifically suggested that in the year 2O72, the accused borrowed only a sum of Rs. 1,00,000/- and on that day signed promissory note ald signed blank cheque were obtained from her ald that amount was repaid through bank.^{However, by} misusing the promissory note and cheque,^{the present complaint} has been filed. Further, the accused as DW1 in chief^affidavit has restated that by misusing the blank cheque^{and promissory} note which were kept as collateral security for the hand loan of D- 1 r\n r\r\r\ / i- +L^ -,^^* or'l 1--. i rvv,vviJl - iil Liic jai:ii LWi i 1 --.^-^ --^^^4n i-l^ Yvui{, PlcDsL ^^--.;^^ vr-u, +L^'-^1-.Lrr\r!.r5lt

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the amounts $'ere repaid r.r-ith 10')l inlerest pcr ntonth b,r. r,i'aY of deposit, in tl-re complainar-rt's bar-rk accoLrnt. Hon.ever, by misusing the illegal custodt' of the negotiable instrLlments, the Complainant liled the complaint '"r.ith an intention to extract amount.

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1O. In cross-examination, the accused admitted that Ex.pl / promissory note and Ex.P2/cheque were issued b,y her however, in other tralsaction.

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1 1. Therefore, the accused had affirmed the fact of issuance and her signature on the cheque/trx.P2, though in the circumstance pleaded in defence. In this context, it is to benoted that, the Hon'b1e Apex Court in the authorities of Triyambak S

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Hegde Vs. Sripad, Basalingappa vs Mudibasappa, Rangappa vs. Sri Mohan, fortified that once the drau,.ing of the cheque and signature on it are admitted, the presumption shall be raised under Section 139 that the cheque r,vas issued in discharge of debt or liability. As such, in the admitted factual position, the presumption under Section 1 l8(a) and 139 of the NI Act shall flow in favour of the appellarrt/complainant.

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It is also lvell settled that^presumption under^Section139 is rebuttable and the onus u'ould be on the accused^{to raise the} probable delence and the standard of prool to rebut is that of preponderance of probabilities.

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The accused/defence theory is that the^{Ex.P1/promissory} note and Ex. P2 / cheque were issued to the complainant,^{in a} hand loan transaction ol Rs.1,00,000/-. In this^{regard, itis} pertinent to note that, in cross-examination of PW1^the suggestion was that the transaction was of the^{year 2Ol2} whereas the DW1 claimed it to be in the^year 2011.^{Furtherit is} the accused's case that she had^taken the^{hand loarr.However,} the Ex. P 1 / promissory note is containing the^{signatures,of the} accused and of her husbald ald there is^no clarification^{on this} aspect.

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It is further^pleaded that the loan of^{Rs. 1,00,000/- was} cleared by way of payment of^Rs. 1,80,000/-through^Exs.D1to D4. It is elicited in the cross-examination^{of DW1 that even if} her claim is believed as it is repayment^{with 10% of interest until} the last payment should be with^{approximate interestof} Rs.3,OO,OOO/-, however, the Exs.D1 to^{D4, in contradiction are} reflecting the payment of Rs.1,80,000/-^only.

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That apart, rvhen the dues *,ere cleared b-r. the date of Ex.D4 i.e., 28.06.2O13 being bank emplo_r.ee, the knorvledge of the accused can be presumed that keeping the signed blank negotiable instruments with the complainant mav cause prejudice to her interests and €rnv person in ordinary prudence should take legal recourse to get back those instruments. No such steps rvere atleast pleaded, therefore, even in ordinary prudence the delence raised by the accused is not convincing. In effect, it shall be held that the accused failed to rebut the presumption raised on the positive case established bv the complainant

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Further as per Section 13g of the NI Act, a person may draw a cheque on his/her account for pavment of amount to discharge of debt or liability and if such cheque is issued and returned unpaid, the drawer shall be liable for prosecution and for such prosecution, the statute does not contemplate that the parties to the loan proceedings shall be made parties. Thus, though there are two borrowers under the promissory Note/Ex.Pl as the cheque/Ex.p2 was issued by one of them, the prosecution against the drawer is justilied and referring the co_ loanee as part]- in the prosecution, is not necessary.

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Resultantly, it shall be held that, the complainant had established all necessary ingredients under Section 138 of the NI Act ald therefore, the accused shall be heid guilty under Section 138 of the NI Act. Consequently', the judgment ol acquittal passed by the trial Court is set aside.

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On the aspect of sentence, considering the nature of transaction, and as the complainant has admittedly not taken any other legal proceedings to redress the loss, this Court is of the considered opinion that instead of imposing the imprisonment, directing the accused to pay fine and from out of it, payment of compensation to the extent of amount in the cheque would be proper to meet the ends of justice.

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19 . Accordingly, this appeal is allowed by setting aside the impugned judgment of acquittal and the accused is convicted for the offence punishable under Section 138 and sentenced to pay a fine of Rs.5,20,000/ . In default, shall undergo simple imprisonment of six months and on realization of the fine amount of Rs.5,00,000/ should be paid to the complainant. The accused shaJl pay the fine amount within a month of receipt of this judgment, failing which the Trial Court shall take

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appropriate steps for execution of^{the sentence in accordance} q,ith lau'.

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