R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE30H DAY OF AUGUST, 2021 BEFORE THE HON’BLE MR. JUSTICE N.K. SUDHINDRARAO CRIMINAL REVISION PETITION No.543/2018 C/W CRIMINAL REVISION PETITION No.544/2018 BETWEEN: SRI. NARAYANA MUDALIYAR @ NARAYANA RAJU S/O. LATE V.KRISHNAIAH AGED50YEARS DOOR No.150, 9TH MAIN15H CROSS, WILSON GARDEN BANGALORE - 560 030. ..PETITIONER (COMMON IN BOTH CRL.R.PS.) (BY SRI S.V. BHAT, ADVOCATE) AND: THE BANGALORE CITY CO-OPERATIVE BANK LTD. H.O.No.3, PAMPA MAHAKAVI ROAD CHAMARAJPET, BANGALORE - 18 AND BRANCH OFFICE AT : JAYANAGAR, BANGALORE REPT. BY ITS MANAGER S.N. SHASHIKALA ..RESPONDENT (COMMON IN BOTH CRL.R.PS.) (BY SRI. T.H. NARAYANA, ADVOCATE) 2 CRIMINAL REVISION PETITION No.543/2018 IS FILED U/S397R/W SECTION401CR.P.C. BY THE ADVOCATE FOR THE PETITIONER PRAYING TO SET ASIDE THE ORDER
DATED:10.12.2015 PASSED IN C.C.NO.6087/2013 ON THE FILE OF XXVI ADDL. C.M.M., BENGALURU CONFIRMING THE ORDER
OF CONVICTION PASSED BY LII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU, IN CRL.A.No.523/2016 DATED1701.2018 AND ACQUIT THE PETITIONER FOR THE ALLEGED OFFENCES PUNISHABLE UNDER SECTION138AND142OF NEGOTIABLE INSTRUMENTS ACT, 1881 AND DIRECT THE RESPONDENT TO PAY THE COST OF THE ABOVE PETITION AND THROUGHOUT. CRIMINAL REVISION PETITION No.544/2018 IS FILED U/S397R/W SECTION401CR.P.C. BY THE ADVOCATE FOR THE PETITIONER PRAYING TO SET ASIDE THE ORDER
DATED:05.02.2016 PASSED IN C.C.NO.21935/2012 ON THE FILE OF XXIX ADDL. C.M.M., BENGALURU CONFIRMING THE ORDER
OF CONVICTION PASSED BY LII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CITY (CCH-53), IN CRL.A.No.524/2016 DATED1701.2018 AND ACQUIT THE PETITIONER FOR THE ALLEGED OFFENCES PUNISHABLE UNDER SECTION138AND142OF NEGOTIABLE INSTRUMENTS ACT, 1881 AND DIRECT THE RESPONDENT TO PAY THE COST OF THE ABOVE PETITION AND THROUGHOUT. THESE CRIMINAL REVISION PETITIONS COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
3. ORDER
Though these petitions are listed for admission, the same are taken up for final disposal having regard to the facts and circumstances of the cases.
2. These Criminal Revision Petitions are directed against the Judgments and orders dated 17.01.2018 passed in Crl.A.No.523/2016 and Crl.A.No.524/2016 by the LII Additional City Civil and Sessions Judge at Bengaluru City (CCH-53) dismissing the appeals and confirming the judgments of conviction and orders of sentence dated 10.12.2015 and 05.02.2016 passed in C.C.No.6087/2013 and C.C.No.21935/2012 by the XXVI Addl. C.M.M. Bengaluru and XXIX Addl. C.M.M. Bengaluru, respectively.
3. The same is produced in a tabular form as under:
4. SL. CRL.R.P.No.CRL.A.No.C.C.No.No.1. 543/2018 523/2016 6087/2013 Dated 17.01.2018 Dated 10.12.2015 Appeal dismissed Complaint allowed confirming the and accused was judgment and order convicted for the of trial court offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to pay fine of Rs.40,000/- out of which Rs.35,000/- payable to the complainant and Rs.5,000/- to the State. In default of payment of fine accused shall undergo simple imprisonment for a period of three months.
2. 544/2018 524/2016 21935/2012 Dated 17.01.2018 Dated 05.02.2016 Appeal dismissed complaint allowed confirming the and accused was judgment and order convicted for the of the trial court offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to pay fine of Rs.3,00,000/- out of which Rs.2,95,000/- payable to the 5 complainant and Rs.5,000/- to the State. In default of payment of fine, accused shall undergo simple imprisonment for a period of six months.
4. In both these petitions, the complainant- petitioner and accused-respondent are one and the same and the cheque amounts have their source in a common claim.
5. In order to avoid confusion and overlapping, the parties are herein referred to in accordance with their status and ranking before the trial Court.
6. Complainant in both these cases is the Bangalore City Co-operative Bank Ltd., registered under the Co- operative Societies Act. Accused is Narayana Mudaliyar, S/o late V.Krishnaiah. 6
7. Father of accused had obtained membership in complainant - Bank and had raised loan of Rs.1,00,000/- from the said Bank on 06.11.1993. He failed to repay the instalment, resulting in initiation of arbitral proceedings before the Joint Registrar of Co- operative Societies, Bengaluru, who passed an award on 19.07.1996. It is also stated that the original borrower Sri.V.Krishnaiah - the member of the Society was dead on 06.04.1994, but was made a party to the arbitral proceedings. When the said award was passed against the dead person - V.Krishnaiah, the petitioner filed an Appeal No.122/1998 before the Karnataka Appellate Tribunal, which came to be allowed by order dated 10.06.1999 and the matter was remanded for fresh enquiry. It is stated that petitioner and others filed W.P.No.6597/2002 challenging the order of the Karnataka Appellate Tribunal, contending that since the award is against a 7 dead person, it is null and void. The writ petition came to be rejected, reserving liberty to the petitioner to raise the said contention before the original authority. Thereafter, the Assistant Registrar of Co- operative Societies, allowed the application to bring the legal representatives of the original borrower - V. Krishnaiah on record on 13.08.2001, which was challenged in Revision Petition No.97/2002 before the K.A.T. and the K.A.T. by its order dated 27.08.2003 set aside the said order and remanded it to reconsider the application on the point whether recovery proceedings against a dead person is void-ab-initio in law.
8. When again the application to bring the petitioners and others on record was allowed by the Joint Registrar of Co-operative Societies, the petitioners and others filed Revision Petition 8 No.84/2006 before the K.A.T. and the same was dismissed by the K.A.T. on 09.04.2007.
9. The said order of the K.A.T. was challenged by the petitioner before this Court in W.P.No.7275/2007, which was allowed by this Court on 25.02.2009, holding that the proceedings against the dead person is not valid proceedings. However, the respondent was permitted to pursue the matter in their existing capacity as legal representatives, if under law they could pursue the same.
10. Writ Appeal was filed by the respondent - Bank in W.A.No.1677/2009 which came to be dismissed. The respondent appeared to have got an award without making them party to the proceedings for Rs.2,95,604/-.
11. It is in this connection, the respondent - officials went to the petitioner for executing the award, which 9 could be dropped, in case an amount of Rs.3,10,000/- was paid. At that time, petitioner issued two cheques for Rs.50,000/- and Rs.2,60,000/- dated 28.04.2012 and 23.05.2012 respectively.
12. And when the bank officials-respondent went with the award, the petitioners issued two cheques bearing No.213445 and 213446 dated 28.04.2012 and 23.05.2012 for Rs.50,000/- and Rs.2,60,000/- respectively. When the cheques were presented to the bank they were dishonoured with an endorsement “payment stopped by drawer” and legal notice came to be issued on 14.05.2012 and 31.05.2012. Complaints were filed on 05.06.2012 and 26.06.2012.
13. Learned trial Judge was accommodated with oral and documentary evidence in each of the case as under:
10. C.C.No.6087/2013: Witnesses examined for the Complainant: PW-1-S.N.Shashikala PW-2-P.S.Shivashankar Witness examined for the accused: DW-1-Narayana Raju List of Documents marked for the Complainant: Ex.P-1- Authorization letter Ex.P-2-Original Cheque vide No.213445 Ex.P-2(a)-Signature of the Accused Ex.P-3 – Memo issued by Syndicate Bank Ex.P-4- Office copy of legal notice Ex.P-4(a)- Postal receipt Ex.P-5-Unserved RPAD Covers Ex.P-5(a)- RPAD opened in open court notice Ex.P-6- Certified copy of the order passed in dispute No.JRD/UBF/T-2752/2005-06 Ex.P-7- Statement of account Ex.P-8-Complaint Ex.P-9-Execution petition Ex.P-10- Facing Sheet Execution petition Ex.P-11-Form No.6 Ex.P-12-Certified Copy of complaint given to SHO by Narayana Mudaliar Ex.P-13- CC of reply letter to the complaint Ex.P-14- Certified copy of order issued by Asst. Registrar of Co-op. Societies, 2nd Zone, Bangalore Ex.P-15- Portion of board resolution 11 Ex.P-16-Death certificate Ex.P-17-Judgment in revision petition 84/2006 Ex.P-18-Order in WP No.1775/2007 Ex.P-19-Rejoinder WP No.7275 by the petitioner Ex.P-20- Order in WP No.6597/2002 Ex.P-21- JRD/UPF/T2732/05-06 Ex.P-22-Certified copy of resolution List of documents marked for the accused: Ex.D-1- CC of Judgment passed in WP No.6597/02 Ex.D-2- CC of Judgment passed in WA No.1677/09 Ex.D-3-CC of Order No.7275/07 C.C.No.21935/2012: Witnesses examined for the Complainant: PW-1-S.N.Shashikala PW-2-P.S.Shivashankar Witness examined for the accused: DW-1-K.Narayana Raju List of Documents marked for the Complainant: Ex.P-1- Authorization letter Ex.P-2- Cheque Ex.P-2(a)-Signature of the Accused Ex.P-3 – Memo issued by Syndicate Bank Ex.P-4- Office copy of legal notice Ex.P-4(a)-Postal receipt Ex.P-5- Reply notice Ex.P-5(a)-Cover Ex.P-6- Copy of Statement of account Ex.P-7- Complaint 12 Ex.P-8- Copy of complaint submitted before the SHO Ex.P-9-Letter submitted before PI, Adugodi PS Ex.P-10-Certified copy of Form No.1 Ex.P-11-Certified copy of execution petition Ex.P-12-Certified copy of orders passed by ARCS Ex.P-13-Certified copy of Form No.6 Ex.P-13(a)-Endorsement on Ex.P-13 Ex.P-14-Xerox copy of death certificate Ex.P-15-Certified copy of revision petition No.84/2006 Ex.P-16-Certified copy of Orders passed by Hon’ble High Court in WP.7275/2007 Ex.P-17-Certified copy of rejoinder filed in WP.7275/2007 Ex.P-18-Certified copy of Orders passed by Hon’ble High Court in WP.6597/2002 Ex.P-19- Certified copy of orders passed by JRCS Ex.P-20-Copy of resolution Ex.P-21 –Mortgage deed List of documents marked for the accused: Ex.D-1- Xerox copy of letter and cheques Ex.D-2- Copy of memorandum appeal Ex.D-3-Endorsement Ex.D-4-Certified copy of Orders passed by Hon’ble High Court in WP.6597/2002 Ex.D-5-Certified copy of Orders passed by Hon’ble High Court in WA.1677/2009 dated 12-10-2009 Ex.D-6-Certified copy of Orders passed by Hon’ble High Court in WP.7275/2007 14. Upon conclusion of trial, the learned trial Judge passed the following order:
13. C.C.No.6087/2013: ORDER
The accused is convicted under Sec. 255(2) of Cr.P.C. for the offence punishable u/s 138 of Negotiable Instrument and sentenced to fine of Rs.40,000/- in case of default he shall undergo simple imprisonment for a period of 3 months. Out of the fine amount Rs.35,000/- shall be paid to the Complainant and Rs.5,000/- shall go to the State. Office is directed to furnish the copy of this Judgment at free of cost to the accused. C.C.No.21935/2012: ORDER
The accused is hereby convicted acting U/s.255(2) of Cr.P.C. for the offence punishable U/s 138 of N.I. Act. The accused is sentenced to pay a fine of Rs.3,00,000/-. In default of payment of fine, he shall undergo simple imprisonment for a period of six months. Out of the fine amount collected from the accused, an amount of Rs.2,95,000/- shall be paid to the complainant bank as a cheque amount and compensation and 14 remaining amount of Rs.5,000/- shall be remitted to the state after appeal period. Bail bond of the accused is stand cancelled.
15. Learned counsel Sri.S.V.Bhat for accused- petitioner submits that the original proceedings that was filed against Krishnaiah is in C.C.No.21935/2012 and order passed by the Tribunal as well as original authority were quashed in W.P.No.7275/2007 and it is confirmed in Writ Appeal No.1677/2009 dated 12.10.2009 (Ex.D-2).
16. Learned counsel further submits that after the orders passed by this court in W.A.No.1677/2009 the proceedings were restarted and application to bring the legal representatives was filed. It is submitted by learned counsel Sri.S.V.Bhat that no notice was served to the petitioners. But on perusal of the order it is mentioned that notice was served on the 15 defendants and they were represented through their advocate.
17. Learned counsel Sri.S.V.Bhat is firm on his submission neither notice was issued to the petitioners in the further arbitral proceedings nor petitioners participated in the proceedings. However in the certified copy of the order it is mentioned in Ex.P-19 as summons was issued or notice of the proceedings was issued through registered post and also through paper publication.
18. As stated above cheques were issued on 28.04.2012 and 23.05.2012.
19. Learned counsel Sri.Sriram Reddy for respondent submitted that the cheque was issued by the accused realising his liability in respect of money borrowed by his father. He would further submit that the legally recoverable debt existed and obligation to pay was on 16 the accused in favour of the respondent-complainant bank. As such it was no way that the petitioner could pray for absence of legally recoverable debt. In this connection this court while deciding W.A.No.1677/2009 (CS-RES) against the order passed by learned Single Judge in W.P.No.7275/2007 dated 25.02.2009 observed as under: “15. However, we are of the considered view that the facts of the present case are similar to the facts of the case in M/s.Ashok Transport Agency Vs. Awadhesh Kumar and another reported in AIR1999SC1484wherein a contention was taken that the proprietor of M/s.Ashok Transport Agency had died on the date of the institution of the suit and an exparte decree passed against the dead person was a nullity before the executing court. The said objection was upheld and the execution petition was dismissed as the decree passed against the dead person was a nullity and it could not be executed. The revision filed before the High Court however was allowed by stating that even though the proprietor of the firm had died before the institution of the suit, the decree passed against him cannot be held to be a nullity and therefore, could be executed. Being aggrieved by the said Judgment a Special Leave Petition was filed before the Apex Court by M/s.Ashok Transport 17 Agency which by then had become a partnership firm. The Apex Court however held that since the death of the proprietor had taken place prior to the institution of the suit, the suit had to be treated as having been filed against a dead person and the decree passed in the said suit was a nullity and could not be executed and therefore, set aside the order of the High Court and held that the executing court was right in dismissing the execution petition.
20. Said objection was upheld and execution petition was dismissed as the decree passed against dead person was a nullity and it cannot be executed. The revision filed before the High Court was allowed by stating that even though proprietor of the firm died before the institution of the suit the decree passed against him cannot be held to be a nullity and therefore could be executed. Being aggrieved by the said Judgment and Special Leave Petition was filed by M/s.Ashok Transport Agency which by then had become partnership. However Hon’ble Apex Court has held that death of proprietor had taken place prior to 18 the institution of suit and suit having been filed against dead person and decree passed in suit was a nullity and could not be executed. Therefore set aside the order passed by the High Court and held that executing court was right in dismissing the petition. Paragraphs 16 and 17 of the said Judgment is as under: “16. In view of the said decision, we are of the opinion that the decision reported in AIR1978AP279on which reliance has been placed by the learned counsel for the appellant to contend that legal representative of a person who is dead at the time of institution of the suit could be impleaded even after the expiry of the limitation for filing the suit if the omission to implead them is due to a bonafide mistake, cannot be concurred with.
17. For aforesaid reasons we are of the view that the learned Single Judge was 19 right in allowing the writ petition filed by the respondent herein and setting aside the orders at Annexures F and G, reserving liberty to the appellant herein to pursue the matter against the respondents in accordance with law.
21. Under the circumstances the bone of contention squarely falls within the meaning of legally recoverable debt. The loan was borrowed by Krishnaiah by mortgaging the schedule property mentioned therein.
22. The law of inheritance or law regarding devolution requires to be compared with succession to the estate in the peculiar circumstances of the case. Basically we are not in the stage of being in force of uncodified Hindu Law wherein there was a pious obligation and son being legal representative was supposed to discharge the liabilities of his father, 20 grandfather and great grandfather but present legal position is quite simple that a son and his liability to discharge the liability of his father only and only to the extent of assets inherited by him. It is in this angle the legally recoverable debt has to be examined. Basically the property was mortgaged by V.Krishnaiah and needless to say the rights of mortgagee is available to proceed against the property. At this juncture learned counsel for petitioner submits that the cheques were issued by the petitioner under protest. Admittedly valuation of the property secured under the mortgagee is stated to be more than the value of the amount of cheques involved in the case. In this connection the contention of the complainant that it has to recover the decreetal amount only through the cheques cannot be accepted. Regard being had to the fact that the cheques were issued by the petitioner. 21
23. Learned counsel for petitioner would submit that the mortgage is not disputed. In the circumstances though the conduct of the petitioner and respondent will have a say here cheques are stated to have been issued under protest as reflected in Ex.P-11- Form No.6 (C.C.No.6087/2013) which is the notice issued at the time of attachment or seizure of the immovable properties. In the circumstances it appears the petitioner wanted to prevent the attachments or seizure of the property secured and cheques were issued. Regard being had to the fact award was passed on 12.01.2012. Borrower is dead the decree could be passed only against his estate. It is not a personal liability of the decree holder. In the circumstances the right of the banker to recover the mortgage amount on the mortgagee property cannot be prevented in law. In the light of such factor the liability of the deceased is only with respect of the 22 estate of the deceased and when that option is open the cheques may not be termed as issued for a legally recoverable debt. Moreover, when the options are there to proceed against the property of the deceased it was not open to the bank to insist only on the cheque and the result under the proceedings under Section 138 of the Negotiable Instruments Act which is both penal and remedial in nature.
24. In the circumstances of the case disposal of this case may not come in the way of recovery by the bank from the estate of deceased-V.Krishnaiah. However in respect of recovering the liability in the form of existence of legally recoverable debt only through cheques which claim of complainant-bank cannot be accepted. In that way the Judgment and order passed in Crl.A.No.523/2016 and Crl.A.No.524/2016 by the 23 appellate Judge are set aside. Revision petitions are disposed of in accordance with the observation made above. Sd/- JUDGE MGN/SBN