1 R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE10H DAY OF AUGUST, 2021 BEFORE THE HON'BLE MR. JUSTICE H.P. SANDESH CRIMINAL APPEAL NO.309/2011 BETWEEN: Mr. MUNIRAJU S/O LATE KALLAPPA AGED ABOUT44YEARS OCC: AUTO DRIVER R/O KAARAHALLI, YESHWANTHPURA NELAVAGILU POST, HOSKOTE TALUK BENGALURU RURAL DISTRICT. … APPELLANT (BY SRI SHIVARAJ N. ARALI, ADVOCATE FOR M/s. LAW NEST) AND: Mr. G.NAGARAJU S/O LATE GOVINDAPPA AGED38YEARS R/O KURUBARA HALLI VILLAGE KASABA HOBLI, HOSKOTE TALUK BENGALURU RURAL DISTRICT. … RESPONDENT (BY SRI ABHINAV R, ADVOCATE FOR M/s. KUMAR & KUMAR) THIS CRIMINAL APPEAL IS FILED UNDER SECTION3784) OF CR.P.C PRAYING TO SET ASIDE THE
ORDERDATED:30.11.2010 PASSED BY THE PRESIDING OFFICER, FAST TRACK COURT-V, BENGALURU RURAL DISTRICT, CRIMINAL APPEAL NO.23/2009, ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION138OF NEGOTIABLE INSTRUMENTS ACT AND CONFIRM THE
ORDEROF2CONVICTION DATED2002.2009 PASSED BY THE PRL. CIVIL JUDGE (JR. DN) AND JMFC, HOSKOTE IN C.C.NO.160/2007. THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENTON3007.2021 THROUGH ‘VIDEO CONFERENCE’ THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
JUDGMENT
This appeal is filed under Section 378 (4) of the Code of Criminal Procedure, 1973 challenging the judgment dated 30.11.2010 passed by the Additional District and Sessions Judge, Fast Track Court-V, Bengaluru Rural District, Bengaluru, allowing Crl.A.No.23/2009 and setting aside the order of conviction dated 20.02.2009 passed in C.C.No.160/2007 by the Principal Civil Judge (Jr.Dn) & JMFC., Hoskote, acquitting the accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘NI Act’ for short) by the Appellate Court reversing the conviction of the Trial Court.
2. The factual matrix of the case is that the complainant and the accused are friends. The accused had requested the complainant to lend hand loan of Rs.70,000/- to meet his urgent financial necessity on first week of October, 2006. The complainant gave an amount of Rs,64,000/- on 3 15.10.2006 and the accused had promised to repay the said loan within three months but the accused did not repay the same. However, on repeated requests, the accused issued a self cheque dated 21.01.2007 and when the same was presented, it was dishonoured. The complainant got issued legal notice both to his residential address as well as his office address. That in spite of receiving the notice sent under certificate of posting, the accused did not give any reply and hence the complainant was forced to file complaint. The complainant in order to substantiate his contention he himself examined as PW1 and got marked document Exs.P1 to P8. The trial Court, after recording the evidence of the complainant examined the accused under Section 313 of Cr.P.C. The accused also examined himself as DW1 and got marked Ex.D1. The trial Judge, after considering both oral and documentary evidence convicted the accused vide judgment dated 20.02.2009. Being aggrieved by the same, the accused had preferred an appeal in Criminal Appeal No.23/2009 and in the said appeal, the accused was acquitted vide judgment dated 30.11.2010. Being aggrieved, the complainant has filed this appeal. 4
3. In the appeal, it is contended that the appellate Court failed to appreciate the fact that both complainant and accused are friends and are known to each other and the accused has admitted his signature at Ex.P1(a). Though accused had taken a defence that the cheque was stolen which was kept in his driving school run by him, the same has not been probabilised and the said defence has been taken for the first time before the trial Court without giving any reply to the legal notice and the same is an after-thought defense. It is also contended that no complaint was given by the accused when he came to know about stolen of cheque. The appellate Court also illegally held that the complainant did not prove by documentary evidence that the cheque was written by the accused himself and also failed to draw presumption under Section 139 of the N.I. Act. It is also contended that the appellate Court has observed that the complainant has not demanded interest on the hand loan availed by the accused and as both accused and the complainant were friends, question of concept of collecting interest does not arise and the complainant also has not contended that he lent hand loan for interest. The observations made by the appellate court in paragraphs-12, 14, 17, 25, 39 5 and 40 are contrary to the facts and also on law and hence, the learned counsel submits that the matter requires interference by this Court.
4. The counsel appearing for the complainant vehemently contends that the accused do not dispute the cheque and the notice sent under certificate of posting was served on him and though notice sent through RPAD to the residential address and also to office address were returned, the accused did not choose to give any reply to the notice of the complainant. The accused has categorically admitted in the cross-examination that the address mentioned in the registered postal covers are correct and the same is not disputed. When such being the case, General Clauses Act is applicable with regard to service of notice. Learned counsel also submits that the appellate Court while acquitting the accused has come to a conclusion that the complainant has not obtained any documents while lending money. The fact that both are friends is not disputed. The defense, of the accused is that the cheque kept in the driving school was stolen and to that effect no probable evidence is available to believe the defence of the accused. 6 Learned counsel would also submit that the judgment of the Apex Court in the case of RANGAPPA v. MOHAN reported in AIR2010SC1898is aptly applicable to the case on hand in order to draw presumption that the accused has not disputed his signature on the cheque and also no reply was given to the legal notice. Though the accused has been examined, the statutory presumption under Section 139 of the NI Act has not been rebutted by the accused and also the admission on the part of DW1 has not been considered by the appellate Court in a perspective manner. It is contended that the appellate Court has committed a fundamental error in not considering the presumption and also held that the complainant was not having any source to lend money in favour of the accused is erroneous and hence, it requires interference by this Court.
5. Having heard the learned counsel for the appellant, this Court on re-appreciation of evidence, allowed the appeal and set aside the judgment of the First Appellate Court and convicted the accused for the offence punishable under Section 138 of the NI Act. Thereafter, the learned counsel for the respondent filed an interlocutory application to recall the judgment of conviction 7 and this Court having heard the respective counsel on record, recalled the judgment passed by this Court vide order dated 23.02.2021 and given an opportunity to the respective counsel. The learned counsel for the appellant has reiterated the arguments advanced earlier.
6. The main contention of the learned counsel for the respondent before this Court is that the appeal filed by the complainant is not maintainable and only revision lies. The learned counsel brought to the notice of this Court Section 378(4) of Cr.P.C, and contends that the Sessions Court already exercised the power of the appellate Court and when the Sessions Court already exercised the power of the Appellate Court, question of again filing an appeal against the order of acquittal does not arise. The learned counsel also would submit that the scheme does not permit the second appeal and the remedy is only under Section 397 or Section 401 of Cr.P.C.
7. The learned counsel in support of his arguments, he relied upon the unreported judgment of this Court passed in Criminal Appeal No.142/2009 D.D. dated 03.06.2009 and referring to this judgment, the learned counsel brought to the 8 notice of this Court that earlier this Court referred Section 378, appeal in case of acquittal and also brought to the notice of this Court paragraph No.8, wherein, this Court has discussed the maintainability of the appeal referring to Section 378 of Cr.P.C. This Court in the order comes to the conclusion that the appeal is not maintainable and the remedy to the complainant would be assail the same invoking the revisional jurisdiction and in the said appeal the appellant was permitted to convert the appeal into the revision. The learned counsel referring to this judgment would also contend that the said judgment is aptly applicable to the case on hand.
8. The learned counsel also relied upon the judgment of the Apex Court in the case of Subhash Chand v. State (Delhi Administration) reported in (2013) 2 SCC17 and brought to the notice of this Court paragraph No.17 of the Judgment, wherein, the Apex Court discussed with regard to Section 378 of Cr.P.C. The matter was reached to the Apex Court in connection with an order of acquittal is passed by a Magistrate in respect of a cognizable and non-bailable offence, wherein, observed the 9 District Magistrate may direct the Public Prosecutor to present an appeal to the Court of Session.
9. With regard to the merits of the case, the learned counsel would contend that it is the case of the complainant before the Magistrate that the loan transaction was taken place on 15.10.2006 and he has not mentioned anything about the capacity to lend the amount and he ought to have demonstrated before the Court regarding his capacity. Ex.P1 is not in the handwriting of the accused and the same has not been explained either in the complaint or in his evidence. The learned counsel also would submit that under Section 269SS of the Income Tax Act, if it is more than Rs.20,000/-, the same is payable by way of cheque and not by cash transaction. The First Appellate Court has applied its mind and given the sound reasoning for acquittal and hence, the same cannot be interfered with and the benefit of acquittal goes in favour of the accused.
10. Per contra, the learned counsel appearing for the appellant in reply would submit that the Court has to look into the definition as defined under Section 2(d) of Cr.P.C. This is not a second appeal. Accused was convicted before the Trial Court. 10 Hence, he has approached the Sessions Court by filing an appeal. The very proviso of Section 372 and also Section 378 attract to file an appeal against an order of acquittal in case of acquittal. Before the First Appellate Court, the accused was the appellant and not the complainant. Hence, the very contention that it is a second appeal cannot be accepted. The very approach of the First Appellate Court is erroneous and failed to take note of the presumption and subsequent to the judgment of the Trial Court; the Apex Court also reiterated the principles with regard to the presumptions in Rangappa's case (supra). Hence, the appeal is maintainable and also the appeal filed by the complainant is liable to be allowed and the accused has to be convicted.
11. In reply to the arguments of the learned counsel for the appellant, Section 378(4) is very clear and this Court cannot entertain an appeal and this appeal amounts to a second appeal and the same is not in original jurisdiction and acquittal is also made by the First Appellate Court and not by the Trial Court. The very contention of the accused in the trial is that the accused cheque was mis-used by the complainant and no 11 dispute with regard to the fact that they were known to each other. Hence, the appeal is not maintainable and the Judgment of the First Appellate Court is sound and well reasoned.
12. Having heard the learned counsel for the appellant and the learned counsel for the respondent and on perusal of the materials available on record, the following points that would arise for consideration of this Court are: (i) Whether the appeal lies against the order of acquittal passed by the First Appellate Court or whether the revision lies as contended by the learned counsel for the respondent?. (ii) Whether the First Appellate Court has committed an error in acquitting the accused?. (iii) What order?. Point No.(i):
13. The main question raised by the learned counsel for the respondent is that the appellant cannot invoke Section 378 of Cr.P.C. to file an appeal against the order of acquittal. The learned counsel would vehemently contend that at the most revision lies and not an appeal and it amounts to a second 12 appeal and the remedy is only to invoke Section 397 or Section 401 of Cr.P.C. The learned counsel also would vehemently contend that the Sessions Court already exercised the powers of the First Appellate Court. Hence, this Court cannot exercise the powers of Appellate Court and the learned counsel for the appellant would submit that the appeal lies not the revision as contended.
14. In keeping this contention, this Court has to extract the very proviso of Section 378, which has been invoked by the appellant. Section 378 of Cr.P.C., reads as follows:- “378. Appeal in case of acquittal (1) Save as otherwise provided in sub-section (2), and subject to the provisions of sub-sections (3) and (5),- (a) the District magistrate may, in any case, direct the Public Prosecutor to present an appeal to the Court of Session from an order of acquittal passed by a magistrate in respect of a cognizable and non-bailable offence; (b) the State Government may, in any case, direct the Public Prosecutor to present an appeal to the High Court from an original or appellate order of an acquittal passed by any Court other than a High Court or an order of acquittal passed by the Court of Session in revision. 13 (2) If such an order of acquittal is passed in any case in which the offence has been investigated by the Delhi Special Police Establishment constituted under the Delhi Special Police Establishment Act, 1946 (25 of 1946 ), or by any other agency empowered to make investigation into an offence under any Central Act other than this Code, [the Central Government may, subject to the provisions of sub- section (3), also direct the Public Prosecutor to present an appeal– (a) to the Court of Session, from an order of acquittal passed by a Magistrate in respect of a cognizable and non-bailable offence; (b) to the High Court from an original or appellate order of an acquittal passed by any Court other than a High Court [not being an order under clause (a)]. or an order of acquittal passed by the court of session in revision. (3) [No appeal to the High Court]. under sub- section (1) or sub- section (2) shall be entertained except with the leave of the High Court. (4) If such an order of acquittal is passed in any case instituted upon complaint and the High Court, on an application made to it by the complainant in this behalf, grants special leave to appeal from the order of acquittal, the complainant may present such an appeal to the High Court. (5) No application under sub- section (4) for the grant of special leave to appeal from an order of acquittal shall be entertained by the High Court after the expiry of six months, where the complainant is a public servant, and sixty days in every other case, computed from the date of that order of acquittal. 14 (6) If, in any case, the application under sub- section (4) for the grant of special leave to appeal from an order of acquittal is refused, no appeal from that order of acquittal shall lie under sub-section (1) or under sub- section (2).
15. This Court also would like to refer to the proviso of Section 401 of Cr.P.C., under which the High Court can exercise the revisional jurisdiction, since the main contention of the respondent is that the revision lies and not an appeal. The proviso of Section 401 of Cr.P.C., reads as follows:
401. High Court' s Powers of revision (1) In the case of any proceeding the record of which has been called for by itself or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of the powers conferred on a Court of Appeal by sections 386, 389, 390 and 391 or on a Court of Session by section 307 and, when the Judges composing the Court of revision are equally divided in opinion, the case shall be disposed of in the manner provided by section 392. (2) No order under this section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by pleader in his own defence. (3) Nothing in this section shall be deemed to authorise a High Court to convert a finding of acquittal into one of conviction. 15 (4) Where under this Code an appeal lies and no appeal is brought, no proceeding by way of revision shall be entertained at the instance of the party who could have appealed. (5) Where under this Code an appeal lies but an application for revision has been made to the High Court by any person and the High Court is satisfied that such application was made under the erroneous belief that no appeal lies thereto and that it is necessary in the interests of justice so to do, the High Court may treat the application for revision as a petition of appeal and deal with the same accordingly.
16. This Court would also like to extract Sections 386 and 372 of Cr.P.C., which read as follows: “386. Powers of the appellate court After perusing such record and hearing the appellant or his pleader, if he appears, and the Public Prosecutor if he appears, and in case of an appeal under section 377 or section 378, the accused, if he appears, the Appellate Court may, if it considers that there is no sufficient ground for interfering, dismiss the appeal, or may- (a) in an appeal from an order or acquittal, reverse such order and direct that further inquiry be made, or that the accused be re-tried or committed for trial, as the case may be, or find him guilty and pass sentence on him according to law; (b) in an appeal from a conviction- (i) reverse the finding and sentence and acquit or discharge the accused, or order him to be re- tried by a Court of competent jurisdiction 16 subordinate to such Appellate Court or committed for trial, or (ii) alter the finding, maintaining the sentence, or (iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the same; (c) in an appeal for enhancement of sentence- (i) reverse the finding and sentence and acquit or discharge the accused or order him to be re- tried by a Court competent to try the offence, or (ii) alter the finding maintaining the sentence, or (iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, so as to enhance or reduce the same; (d) in an appeal from any other order, alter or reverse such order; (e) make any amendment or any consequential or incidental order that may be just or proper; PROVIDED that the sentence shall not be enhanced unless the accused has had an opportunity of showing cause against such enhancement: PROVIDED FURTHER that the Appellate Court shall not inflict greater punishment for the offence which in its opinion the accused has committed, than might have been inflicted for 17 that offence by the Court passing the order or sentence under appeal. Section 372. No appeal to lie, unless otherwise provided. No appeal shall lie from any judgment or order of a Criminal Court except as provided for by this Code or any other law for the time being in force.
17. Having read the above provisions conjointly particularly Section 386, it is clear that, in an appeal from a conviction - reverse the finding and sentence and acquit or discharge the accused, or order him to be re-tried by a Court of competent jurisdiction subordinate to such Appellate Court or committed for trial. In the case on hand also powers are vested with the First Appellate Court under Section 386(b) or alter the finding, maintaining the sentence, or with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the same. The powers are vested with the Appellate Court to re-appreciate the material on record.
18. Having perused Section 372 of Cr.P.C., - No appeal to lie unless otherwise provided. No appeal shall lie from any judgment or order of a Criminal Court except as provided for by 18 this Code or by any other law for the time being in force. There is a proviso that the victim shall have a right to prefer an appeal against any order passed by the Court acquitting the accused or convicting for a lesser offence or imposing in adequate compensation, and such appeal shall lie to the court to which an appeal ordinarily lies against the order of conviction of such Court. The right is conferred on the victim to prefer an appeal against an order acquitting the accused or challenge the inadequate compensation or conviction for a lesser offence. Here is a case of conviction and reversal of conviction. Hence, invoked Section 378 of Cr.P.C.
19. Having perused Section 374 of Cr.P.C., Appeals from convictions; sub clause (3) is clear that any person convicted on a trial held by a Metropolitan Magistrate or Assistant Sessions Judge or Magistrate of the first class, or of the second class, may appeal to the Court of Session. Section 374 is clear that Section 374 sub-clause (3) says that, an appeal lies to the Court of Sessions and the accused had preferred an appeal before the Sessions judge. It is not in dispute that the Trial Court convicted the accused and the accused questioned the same before the 19 Sessions Court and the Sessions Court reversed the finding of the Trial Court and acquitted the accused and preferred an appeal invoking Section 378 of Cr.P.C.
20. Now, coming to the provisions invoked by the complainant before this Court, Section 378 and on perusal of Section 378, it is clear that appeal in case of acquittal and proviso of Section 378 is very clear from an order of acquittal passed by a Magistrate in respect of a cognizable and non- bailable offence, the District Magistrate may in any case, direct the Public Prosecutor to present an appeal to the Court of Session.
21. Section 378(b) says that the State Government may, in any case, direct the Public Prosecutor to present an appeal to the High Court from an original or appellate order of an acquittal passed by any Court other than a High Court and proviso (2) also with regard to if an offence has been investigated by the Delhi Special Police Establishment constituted under the Delhi Special Police Establishment Act, 1946 or by any other agency empowered to make investigation into an offence direct the Public Prosecutor to present the appeal. 20
22. The proviso of Section 378 is very clear that no appeal to the High Court under sub-section (1) or sub-section (2) shall be entertained except with a view of the High Court. The proviso of Section (4) is very clear that, if such an order of acquittal is passed in any case instituted upon complaint and the High Court, on an application made to it by the complainant in this behalf, grants special leave to appeal from the order of acquittal, the complainant may present an appeal to the High Court. The proviso of Section (4) is very clear regarding an order of acquittal passed in any case instituted upon the complaint prefer an appeal with special leave to appeal from the order of acquittal and the present appeal is filed.
23. Having perused the proviso of Section 401 particularly, sub-clause (4), it is very clear that, where under this Code an appeal lie and no appeal is brought, no proceeding by way of revision shall be entertained at the instance of the party who could have appealed.
24. On reading of proviso of Section 401, there is a clear bar, where an appeal lies under the code and no appeal is brought, no proceedings by way of revision shall be entertained. 21 Hence, the very contention of the learned counsel for the respondent that the revision lies and it amounts to a second appeal cannot be accepted. It has to be noted that the Trial Court in the case on hand convicted the accused and the First Appellate Court has reversed the finding and acquitted the accused. Hence, it is clear that this Court again re-appreciate the evidence available on record; whether the First Appellate Court has committed an error while re-appreciating the evidence has to be examined by this Court on re-appreciation of evidence. The scope of revision is very limited and not like the appellate jurisdiction. The First Appellate Court has to re-appreciate the evidence available on record since there is a divergent finding having considered the material on record.
25. Apart from that, learned counsel for the appellant has relied upon unreported judgment this Court, passed in Crl.A.No.142/2009 disposed of on 03.06.2009 and did not bring it to the notice of this Court that the very same judgment was considered by the Division Bench of this Court in K.H. Ganesh Rao vs. H. Gopal reported in ILR2010KAR4059wherein, the Division Bench discussed the scope of Section 22 378(4) of Cr.P.C. and held that Section 378(4) of Cr.P.C. provides that if an order of acquittal is passed in any case instituted upon complaint and the High Court on an application made to it by the complainant in this behalf, grant special leave to appeal from the order of acquittal, the complainant may present such an appeal to the High Court. The Division Bench also further held that sub-Section 4 unlike sub-Section 1 and 2 of Section 378 Cr.P.C. does not specifically make mention of order of acquittal in original or appellate jurisdiction by the Court sub-ordinate to High Court. However, the wordings of sub- Section 4 start with “if such an order of acquittal is passed”. The expression “such order of acquittal” should be understood as “original or appellate order of acquittal”. The High Court or the Sessions Court in the revisional jurisdiction will not have a right to convert an order of acquittal into a conviction. The advantage and benefit which the appellant enjoys in an appeal cannot be availed under Section 482 Cr.P.C. Hence, the view taken by Hon'ble Justice Arali Nagaraj that according to Section 378(4) of Cr.P.C., the complainant has right to file an appeal against the order of acquittal passed by the Sessions Court with leave of the High Court is justified and upheld. The Division Bench also 23 discussed regarding Sections 2(2) and 5(2) of Karnataka High Court Act, 1961 and Section 378(1), 378(2), 378(3) and 378(4) of Code of Criminal Procedure, 1973 and so also Doctrine of Stare Decisis. The judgment passed by Hon'ble Justice Jawad Rahim in Criminal Appeal No.142/2009 is not accepted and held that appeal is maintainable while coming to such conclusion also considered the judgment of this Court in Chairman, Village Panchayath vs. Thimmasetty reported in AIR1956Mys 62 with reference to Section 417 of Cr.P.C., 1898 which correspond to Section 378 of Cr.P.C., 1973 has held that, the complainant with the leave has right of appeal to the High Court against the order of acquittal passed by the Sessions Court in Appeal against the order of conviction passed by Magistrate. The said judgment is also considered by the Gujarath High Court in Mohammadmiya Kalumiya vs. Majidkhan Dildarkhan and Another reported in 1972 Crl.L.J.
1409. 26. Having discussed in detail, the Division Bench comes to the conclusion that High Court or the Sessions Court in the revisional jurisdiction will not have a right to convert an order of acquittal into a conviction and Division Bench in agreement with 24 the view taken by Hon'ble Justice Arali Nagaraj and not accepted the findings of the Single Judge passed in Crl.A.No.142/2009 and hence, it is clear that only appeal lies and not the revision as contended by the learned counsel for the appellant 27. The learned counsel for the appellant also relied upon the judgment of the Apex Court in Subhash Chand’s case (supra), and brought to the notice of this Court paragraph No.17 of the judgment and the issue involved in the case on hand is different from the discussions made in paragraph No.17 and though discussion was made in paragraph No.17 with regard to Section 378 of Cr.P.C., the same is not on the point involved in the matter but, the Apex Court, in paragraph No.23 in the very same judgment held that, a complainant can file an application for special leave to appeal against an order of acquittal of any kind only to High Court. In the case on hand also, there are divergent findings given by the Trial Court as well as the First Appellate Court and hence, an appeal lies under Section 378 of Cr.P.C. and the complainant has rightly filed the appeal and the question of filing the revision does not arise as contended by the learned counsel for the appellant and the very contention that 25 the revision lies cannot be accepted since, there is a clear bar to invoke Revisional jurisdiction when there is a provision for filing an appeal. Hence, the very contention of the learned counsel for the appellant that the appeal is not maintainable cannot be accepted. Accordingly, I answer point No.(i) in the negative. Point No.(ii) 28. Learned counsel for the appellant would vehemently contend that the accused did not dispute his signature in Ex.P1- cheque. The main defence of the learned counsel for the appellant is that the complainant has misused the signed cheque which was kept in the office of the accused was stolen. In order to substantiate the said contention, the accused has not placed any material before the Trial Court but, the First Appellate Court carried away by referring Section 269-SS of Income Tax Act, 1961 and the accused has not rebutted the case of the complainant. If the accused had rebutted the evidence of the complainant, then the burden shifts on the complainant to give an explanation and the said circumstance was not warranted in 26 the case on hand. The First Appellate Court failed to consider the presumption that the accused has admitted his signature available on the cheque and hence, the counsel relied upon the judgment of the Apex Court in Rangappa’s case (supra).
29. Now, this Court has to re-appreciate the material available on record, since divergent findings were given by the Trial Court as well as the First Appellate Court. The main contention of the learned counsel for the respondent is that First Appellate Court has rightly re-appreciated both oral and documentary evidence placed on record. The complainant before the Trial Court would contend that this is a transaction of hand loan and in the complaint or in his evidence, the accused did not mention or demonstrate that he is having capacity to lend loan. It is elicited that, Ex.P1-cheque is not in his handwriting and the same has not been explained by the complainant either in his complaint or in his evidence. The learned counsel for the respondent would also submit that, there is a bar under Section 269-SS of Income Tax Act, 1961 to make payment in cash and the amount has to be paid only by cheque. The said aspect has been considered in detail by the First 27 Appellate Court applying its mind and has come to the right conclusion.
30. Having considered the respective contentions of the appellant and the respondent, this Court has to re-appreciate the material on record. Before considering the oral and documentary evidence, this Court would like to refer the contents of the complaint. The complaint discloses that the complainant and the accused are good friends and they know each other from past several years. The accused had approached the complainant in the first week of October and requested him to pay hand loan of Rs.70,000/- as he was in financial constraint and hence, the complainant has extended hand loan of Rs.64,000/- on 15.10.2006. The accused had promised to repay the amount within three months. It is also the case of the complainant that he demanded amount on several occasions but the accused did not repay and at the instance of the complainant the accused had issued a cheque dated 25.01.2007 and when the same was presented, it was dishonoured with a shara ‘funds insufficient’. Hence, legal notice was issued and no reply was given by the accused. 28
31. The complainant, in order to prove his case, examined himself as PW1 and filed sworn affidavit in lieu of his chief examination reiterating the averments of the complaint. PW1 was subjected to cross-examination. In the cross- examination, it is elicited that the complainant was a tailor and also working as an auto driver. The accused is known to him from last 3 to 4 years in connection with getting driving licence from the driving school run by the accused. He also admits that along with the accused both were running crackers chit and he was working as agent under the accused. He was visiting Sai Enterprises of the accused once in 15 days. It is suggested that he was the Director of Sai Ram Enterprises and the same was denied. It is suggested that in 2006, accused was not having any financial constraints and the same was denied. PW.1 states that he lent amount cash to the accused in the driving school and no other persons were present at that time. PW1 claims that Ex.P1-cheque is in the handwriting of the accused. He admits that the writing in the cheque is in one ink. It is suggested that the signature is in different ink and the same was denied. It is suggested that the accused used to keep signed 29 blank cheques in his driving school and the same was stolen by the complainant and misused the said cheque and the suggestions are denied.
32. On the other hand, the accused, in order to prove his case, examined himself as DW1 by filing an affidavit in lieu of chief examination. He has reiterated in his defence that he used to keep blank signed cheques in his driving school and the complainant had stolen the said cheque and filed a false case. DW1 was subjected to cross-examination. In the cross- examination, it is elicited that he is a B.Com graduate. He was residing earlier at Kurubarahalli and now he is residing at Hosakote Town from last two years. He admits that he was running Sai Vidya Driving School at Hosakote, located in Jayashree Hospital building, Old Madras road, Hosakote Town. He admits that he only gave instructions to his counsel to prepare his chief evidence and also admits that in the said affidavit he has sworn to that he is a resident of Kurubarahalli. He also admits that he was running crackers chit and also admits that he was running the same for a period of two years. He admits that he had acquaintance with the accused from 2004 30 and also says both of them had opened joint account in the year 2004 but they had not obtained any cheque book except pass book-Ex.D1. He also admits that in the chief evidence he sworn to that a joint account was opened in the Vijaya Bank and he claims that the same is by mistake. He states that he used to keep five signed blank cheques in his driving school as he used to visit RTO office in connection with the driving school. He came to know about stealing of the said cheque only when he received summons from the Court and he admits that he cannot tell which number the cheque was stolen. He did not give any complaint to the police as per the advice of his advocate that not to file complaint since he has already received summons. He also states that since he was not aware of stealing of the cheque he did not inform the Bank. It is suggested that in respect of the residential address and office address, notice was sent to him and the same was denied that the same is not known to him. He admits that the address mentioned in Ex.P8 is correct. It is suggested that notice was sent to his residential address but he has not given reply and he has also deposed that the notice was not served on him and the same was denied. It is suggested that one Malleshaiah had filed a case against him for 31 bouncing of cheque for an amount of Rs.60,000/- and he denies the same but claims a false case is filed. It is suggested that case in CC No.368/1998 is against him is denied and that he is not aware of the same. It is also suggested that he had borrowed a sum of Rs.25,000/- from one J.A.Nagaraj and he denies the same. It is suggested that J.A.Nagaraj had also filed a case against him in case No.218/2005 and he denies that he is not aware of the same. It is suggested that in the said case one D.L.Somesh is the advocate appearing on behalf of him and the same was denied. Further, in the cross-examination, he admits that his bank account at Vijaya Bank bearing account No.4782. The present cheque Ex.P1(a) also belongs to the said Bank. It is suggested that handwriting in Ex.P1 is in his writing and the same was denied. It is suggested that the handwriting available in Ex.P1-Cheque and also the case pending before the Mallur Court cheque are similar and witness says that he does not know the same. It is suggested that the signature available at Ex.P1(a) and the cheque of the Malur Court are similar and the same was denied. But, he admits that Ex.P1 and also the cheque of Malur Court pertain to account No.4782 in respect of the Vijaya Bank. 32
33. On perusal of both oral and documentary evidence available on record, it is the specific case of the complainant that he had lent money to the accused on 15.10.2006 and in order to repay the said loan the accused had issued a cheque on 25.01.2007. When the cheque was presented it was dishonoured with a shara ‘insufficient funds’. The complainant has relied upon document Ex.P1-cheque. The accused did not dispute his signature available on Ex.P1. The complainant also relied upon Ex.P3-legal notice and the said notice was sent to the residential address of the accused Kurubarahalli and also to his driving school. The complainant relied upon Ex.P4-certificate of posting, RPAD and postal receipt. Exs.P7 and P8 are the registered postal cover in respect of his residential address and also the driving school address.
34. It is pertinent to note that when a notice was sent under UCP as well as registered post, an endorsement at Ex.P7 discloses that the post man had visited for seven days to his residential address and the accused was not found, hence returned the same. In the cross-examination, DW1 categorically admits that the address mentioned in Ex.P7 is correct and so 33 also the address mentioned in Ex.P8 is in respect of his driving school. It is also important to note with regard to service of notice is concerned, the accused made an attempt in his evidence that from last two years he is residing at Hosakote Town. But, in the cross-examination, he categorically admits that in his chief evidence affidavit sworn to that he is residing in the address mentioned at Ex.P7. The said affidavit was filed on 17.01.2009 and hence it is clear that as on the date of filing of the affidavit, he was residing in the address mentioned in Ex.P7 and it is also important to note that in the cross-examination he also admits the address mentioned in Ex.P8 is correct. Hence, it is clear that the accused has made an attempt to depose before the Court that he has not received the notice when the address mentioned in Exs.P7 and 8 are correct and the very same address was furnished by the accused in his affidavit, it is clear that he has deposed falsely before the Court that he has not received the notice on the ground that he is residing at Hoskote. The postal receipt produced by the complainant in terms of Ex.P4, it is clear that notice was sent through UCP. When such being the case, as rightly pointed out by the learned counsel for the appellant that under the General Clauses Act, the Court can 34 draw inference that notice was served on the accused in respect of both addresses which were sent through UCP even though registered postal covers are returned as he admits both are correct address.
35. Now, coming to the evidence of PWs.1 and 2 and no doubt, PW1 in the cross-examination admits that both are having joint account held in terms of Ex.D1 and the complainant also does not deny the said fact that they were not having joint account. It is important to note that PW1 in the cross- examination admits that they were running crackers chit but he claims that the same was run by the accused and he was only an agent and he had secured 149 members for the said chit business. It is suggested that he was one of the Director and the same was denied. The defence counsel itself suggested to the PW1 that handwriting available in Ex.P1 is written in one ink and the same was admitted but suggested that the signature was in different ink and the same was denied. In the cross- examination, a suggestion was made that he had stolen the cheque and misused the same and the said suggestion was denied. In order to substantiate the same, the defence of the 35 accused is that the complainant had stolen the cheque but to that effect nothing is elicited. No doubt, it is elicited that both are friends and PW1 was also working as agent in respect of the crackers chit.
36. It is also relevant to note that, in the cross- examination of DW1 regarding transaction is concerned, it is suggested that DW1 used to keep five blank cheques signed since he used to visit RTO office often for his driving school purpose. He admits that he has not given any complaint to police and also did not intimate the bank as he did not know about stealing of the cheque. But, he gave an explanation that he came to know only after received summons from the Court and on the advice of the advocate not given any complaint. It is important to note that DW.1 categorically admitted that he is a B.Com., graduate and what made him to keep 5 signed cheques, is not explained.
37. Having perused the evidence of DW1, a suggestion was made to the accused whether he had faced several cases on account of dishonour of cheque in respect of one Malleshaiah but he admits that the said Malleshaiah has filed a false case against 36 him. It is also suggested that one J.Nagaraj has also filed a case against him though he denies in the cross-examination, he categorically admits that Ex.P1 the subject matter of the cheque and the complaint filed against him before the Malur Court cheque are bearing account No.4782 and both the cheques are of Vijaya Bank cheques. Hence, it is clear that though he denies the cases filed against him by Malleshaiah and J.Nagaraj, the admission made by him clearly shows that the evidence of DW1 is not trustworthy not only in respect of his transaction and also in respect of his address. Even though he admits that the address is correct, he contends that he is residing in Hosakote. In support of his claim, he has not produced any documents before the Court that he is residing at Hoskote. There are cases against him and though he denied that he was not having any financial difficulties, the cases pending against him shows that he was in financial constraint and nothing is elicited with regard to the fact that the complainant was not having any source to make the payment.
38. It is important to note that when the accused did not dispute the signature available in Ex.P1 and also he has not 37 given any reply notice, it is rightly pointed out by the learned counsel for the complainant that the principles laid down in the Rangappa’s case is applicable to the case on hand. It is also important to note that the court below while convicting the accused had drawn the presumption in favour of the complainant and comes to the conclusion that the statutory presumption was not rebutted under Section 139 of the NI Act. It is further important to note that the appellate Court while acquitting the accused had given the reason that the complainant had not obtained any document while lending loan. Ex.P1 itself is a document for having given cheque on demand to repay the amount. It is also important to note that it is emerged in the evidence that both accused and the complainant are friends and also it is not in dispute that they were running crackers chit and PW1 claims that he was an agent and the accused claims to be one of the Director and no material is placed to that effect. When both are friends, the Court also cannot expect the documents for the transaction. The very observation of the appellate Court that the complainant had not obtained any document is erroneous. It is important to note that cheque is given and hence the said document itself supports the case of 38 the complainant. The accused has to explain how the cheque has gone to the hands of the complainant. No doubt, a defence was raised that the complainant had stolen the cheque and it has to be noted that PW1 has categorically denied the said defence and no explanation is given before the Court why he used to keep five blank cheques signed. No doubt, he was running a driving school; that does not mean that he used to keep signed blank cheques that too, 5 cheques and he has not assigned any reasons to whom he has handed over the said cheques. The evidence adduced by the accused with regard to stolen of cheque in his driving school cannot be believed.
39. The accused has to lead plausible evidence before the Court and this Court has taken note of the evidence of DW1 that his evidence cannot be believed and the same is not trustworthy and he makes an attempt to give evading answer in the cross-examination in respect of other two cases filed against him for cheque bouncing. Though he denies, he admits that two cases are filed against him in the cross-examination and hence his evidence is not credible. The appellate Court has carried away in a wrong notion that the complainant failed to prove that 39 he lent money and erroneously relied upon the judgment reported in the case of Shiva Murthy vs. Amruthraj reported in ILR2008KAR4629and has held that the complainant has to prove the existence of legal debt. It is to be noted that the complainant has placed the cheque which has not been disputed by the accused and no reply is given and Trial Court rightly drawn the statutory presumption under Section 139 of NI Act in the absence of any rebuttable evidence.
40. I have already pointed out the principles laid down in the Rangappa’s case (supra), is aptly applicable to the case on hand. The statutory presumption available is in favour of the complainant. The other observation made by the appellate court that when the amount is paid in excess of Rs.20,000/- and the said amount to be paid through cheque only under the Income Tax Act also cannot be accepted. Here, the transaction is between friends and both of them having acquaintance with each other and also running Crackers’ Chit. P.W.1 claims he was an agent and D.W.1 claims he was a Director. It is categorically admitted that no complaint to the police was given and no intimation was given to the Bank. No doubt, he has given 40 explanation and this Court comes to the conclusion that based on the said cheque, notice was issued and an inference was drawn that notice sent under UCP was served on him and he has not given any reply, complaint or intimation to the Bank. The appellate Court has over-looked the statutory presumption provided under Sections 118 and 139 of the NI Act even though the accused adduced evidence he did not rebut the evidence of the complainant. The case of the complainant is probable than the case of the accused. The other observation of the Appellate Court that the complainant not claimed the interest and the said observation is also erroneous since it is not the case of complainant that he gave the amount for interest. Therefore, the appellate Court has committed an error in coming to the conclusion that the accused rebutted the evidence of the complainant and in the cross-examination PW1, nothing is elicited except they are good friends and the complainant was also visiting the driving school of the accused. Hence, the appellate Court has committed an error in reversing the finding of the trial Court without drawing presumption available in favour of the complainant. Therefore, nothing inspires this Court 41 that the evidence led by the accused amounts to rebutting the evidence of the complainant.
41. This Court, in the judgment in M/s. National Agricultural Co-op. Marketing Federation of India Ltd. (NAFED), rep., by its Bengaluru Branch Manager vs. M/s. Disha Impex (Pvt.) Ltd., New Delhi and Another reported in ILR2021KAR1184held that, when once the issuance of cheque has been admitted, the presumption has to be drawn in favour of the complainant under Section 139 of N.I. Act. It is also observed that, it is settled law that the presumption under the N.I. Act is rebuttable presumption and the Court has to look into the evidence available on record whether the accused has rebutted the evidence of complainant. If the complainant is able to draw the presumption at the first instance, the burden shifts on the accused with regard to rebutting the evidence of the complainant. In this case, though the accused himself has been examined as D.W.1 and the evidence of the complainant has not been rebutted either by way of effective cross-examination or by leading evidence before the Trial Court. But, the First Appellate 42 Court, has committed an error in reversing the findings of the Trial Court.
42. The Apex Court, in the judgment reported in Bir Singh vs. Mukesh Kumar reported in (2019) 4 SCC197has held that, in a case of N.I. Act, 1981, Section 139 raises presumption of law that cheque duly drawn was in discharge of debt or liability. However, the presumption is rebuttable and onus lies on drawer to rebut it by adducing cogent evidence to the contrary. The Apex Court also further held that under Sections 139, 20 and 87, there is a presumption that cheque, duly signed and voluntarily made over to payee, was in discharge of debt or liability arises irrespective of whether cheque was post-dated or blank cheque for filling by payer or any other person, in the absence of evidence of undue influence or coercion. In the case on hand, nothing is placed before the Court by rebutting the evidence of the complainant and though the learned counsel for the appellant would contend that the cheque was stolen and misused, the same has not been proved by leading any cogent evidence before the Trial Court. 43
43. The Apex Court also, in the judgment in Uttam Ram vs. Devinder Singh Hudan and Another reported in (2019) 10 SCC287held that, burden of rebuttal of presumption under Sections 118 and 139 is by accused and summarizing the principles in the judgment held that, to disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did no exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist, apart from adducing direct evidence to prove that the consideration did not exist, or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The same is not done in the case on hand.
44. Having perused the principles laid down in Uttam Ram’s case referred (supra) also, in the case on hand, the accused has not rebutted the evidence of the complainant and presumptions in favour of the complainant. It is further held in 44 this judgment that defence that cheque book lost /stolen or that cheque was misused was completely without basis and the Appellate Court reversed the acquittal and further held that, accused to pay twice of the amount of cheque as fine and costs of litigation of Rs.1,00,000/- within three months, and if the amounts are not paid in time, to undergo imprisonment for six months.
45. The Apex Court, in the judgment in Rohitbhai Jivanlal Patel vs. State of Gujarat and Anr. reported in AIR2019SC1876invoking the ingredients of Sections 138, 118 and 139 held that presumption in favour of the holder is apparent on the face of record. Therefore, it is required to be presumed that cheques in question were drawn for consideration and complainant received it in discharge of an existing debt and onus is shifted on accused, unless onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on case of complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused. The failure of accused to show reasonable probability of existence of transaction with his friend, evidence of friend not 45 supporting his case and accused not denied his signature on cheques but, attempting to suggest availability of his signatures on blank stamp paper of his friend, no cogent reasons for him to sign on blank stamp paper/cheques with all relevant particulars are same cheques forming subject matter of complainant’s case and held that accused is liable to be convicted.
46. In the case on hand also, the accused has admitted the cheque available in Ex.P1 and failed to rebut the presumptions and nothing is placed before the Court and no cogent evidence to disbelieve the case of the complainant. Hence, the presumption is in favour of the complainant. Unless, a contrary evidence is placed before the Court, the contention of the learned counsel for the appellant that there was no transaction and the cheque has been stolen and misused cannot be accepted. Hence, the approach of the First Appellate Court is erroneous and it requires interference by this Court. This transaction is of the year 2006 and the self-cheque is dated 21.01.2007 and almost 17 years have elapsed after the transaction. Hence, this Court has to take note of the same while directing the accused to pay the fine amount and 46 compensation in view of the principles laid down in the judgment of the Apex Court in Uttam Ram’s case (supra).
47. In view of the discussions made above, I pass the following:
ORDER(i) The appeal is allowed. (ii) The impugned judgment of acquittal dated 30.11.2010 passed in Criminal Appeal No.23/2009, is hereby set aside. (iii) The judgment of the Trial Court dated 20.02.2009 passed in C.C.No.160/2007 is restored. (iv) The accused is convicted for the offence punishable under Section 138 of the NI Act. (v) The accused is directed to pay twice the amount of cheque as fine, which includes the cost of litigation to the complainant within eight weeks from today and in default of the payment of the fine amount, the accused shall undergo simple imprisonment for a period of one year. 47 (vi) The trial Court is directed to secure the accused if he fails to pay the amount and subject him to serve sentence. (vii) The Registry is directed to transmit the Trial Court records to the Trial Court forthwith. Sd/- JUDGE cp*/ST