Judgment:
Jawad Rahim, J.
1. This appeal is by the complainant against the judgment in Cri. A. No. 724 of 2002, dated 7-11-2003 setting aside the conviction of the respondent-accused recorded by the Trial Court in CC No. 35132 of 2000, dated 22-11-2002.
2. Heard.
3. The case papers reveal that the appellant-Siddappa initiated prosecution against the respondent-K Nanjappa for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the Act') on the basis that there was financial transaction between the parties. The respondent had requested financial assistance and borrowed a sum of Rs. 80,000/- assuring to repay promptly. However, he defaulted. When the complainant raised demand to repay the amount, the respondent issued cheque on 12-6-2000 for a sum of Rs. 80,000/- assuring encashment. The cheque on presentation was dishonoured vide endorsement dated 16-6-2000 insisting issuance of statutory notice which was also not complied.
4. The learned jurisdictional Magistrate taking cognizance for the offence under Section 138 of the N.I. Act has secured the presence of the respondent-accused and put him on trial, during which the appellant herein examined himself as P.W. 1 and relied on 10 documents. The accused on his part examined himself and three witnesses and relied on three documents.
5. The main defence of the accused is that he was contributing for two chits of Rs. 1,30,000/- each, run by the complainant through his agent one Manjula. He was paying regularly the monthly subscription and became successful in bidding the chit. He became entitled to prize amount of the chit, but when he demanded the money, the appellant obtained from him blank cheque. The cheque is now been misused to claim Rs. 80,000/-. To support his contention he examined three witnesses describing them as the co-members in the chit transaction.
6. The Trial Judge found the evidence so led by the accused was not sufficient but the evidence led by the complainant established ingredients constituting offence punishable under Section 138 of the N.I. Act. Thus, the respondent was convicted with a direction to pay Rs. 82,000/- as the fine amount. Against which he was in appeal before the Sessions Judge and the Appellate Court set aside the order passed by the Trial Court and acquitted the accused. Against it, the complainant is in this appeal.
7. Learned Counsel for the appellant would contend that the learned Trial Judge taking into consideration all aspects relating to the money transaction and also the fact that accused at no time disputed issuance of cheque to the complainant and also about its dishonour, such evidence is placed on record but the appellate Judge has without considering the effect of such incriminating evidence, erroneously acquitted the respondent.
8. He would draw my attention to exchange of notice between the parties and the reply sent by the accused. He refers to the averments made in the notice to make out a clear case that the respondent at no time disputed that he had financial transaction with the appellant and that in such financial transaction, he has issued the cheque impugned in this case.
9. Per contra, the learned Counsel for the respondent would contend that accused has only admitted of having chit transaction with the complainant and winning the prize chit. He submits that in order to claim the prize amount of the chit, when the accused approached the complainant, the complainant demanded him to sign some documents as also to issue a cheque. He has done the same with other members, who had also lodged police complaint against him. He submits that modus operandi of the complainant was to obtain a negotiable instrument from the members of the chit and then to institute false cases for recovery of the amount. He submits that the appellant is guilty of collecting the money as chit subscription and then enforcing the cheque obtained as security. He submits that criminal cases have been registered and complainant being a Government servant could not have run such chit transactions. Therefore, no offence has been made out for action under Section 138 of the N.I. Act.
10. I have examined the evidence on record in the light of the contentions urged by both sides. It is pertinent to note that issuance of cheque impugned in this case is not denied by the accused nor he has denied that the amount filled was Rs. 80,000/-. According to him, he has given a cheque in good faith. Therefore, the burden is on the accused, to explain under what circumstances he issued the cheque. The circumstances stated go against him because the accused admits that he was contributing to the chits and had succeeded in bidding the chit in auction. Therefore, the question is whether having won the chit, did the accused receive the amount or not. In the notice, which is the first document of exchange between the parties, the accused has not stated that he had not received the prize amount and that he says that cheque was obtained as security. The relevant statement made by him in the notice reads as follows:
Your client was conducting a chit for Rs. 2,60,000/- (2 chits of Rs. 1,30,000) through his agent one Smt. Manjula. My client was the prized bidder in the chit. Your client informed my client to furnish surety for the prized bid amount. Hence, my client only offered the said cheque as security to the prized amount and in good faith and intention that your client will not misuse the same. Now your client with an ulterior motive to cause wrongful loss to my client and unlawful gain for himself has got it dishonoured and has issued the notice under reply though my client is paying the chit installment to your client's agent regularly as desired by you. Thus, there is no consideration passed to my client and the amount mentioned by you is not a legally enforceable debt, but the said cheque was taken only as a security for the chit transactions.
My client reserves her right to approach jurisdictional police authorities to take action against your client and you client's agent Smt. Manjula in respect of cheating, blackmailing etc. and the threat of your client to forcibly enter the house and take away the movables from her residence without recourse to law. You may also advice/intimate your client that he is running illegal chit business in contravention of Chit Funds Act, 1982 and my client would approach the appropriate authorities with regard to running of illegal chit business.
In the same manner, your client has also got issued legal notice, where sureties are offered by parties by issuing Cheques and threatening them with dire consequences. This act of issuing notice is creating nuisance and mental tension to the parties concerned.
Hence, it is requested to advice your client to desist from initiating any criminal proceedings against my client. Inspite of this reply if your client were to rush to the Court of law, my client will suitably defend the same at your client's costs and expenses, which may be noted.
11. From the said averments, it is clear that issuance of cheque is not in dispute. Financial transactions between the parties are not in dispute. The amount for which the chits were contributed is Rs. 2,60,000/-. The accused has failed to mention what was the prize amount. Therefore, the admitted facts as such reduce the burden on the complainant to establish that there was transaction between the parties and cheque was issued in this regard. The Trial Court has rightly appreciated the. evidence as establishing offence under Section 138 of the N.I. Act, in view of presumption under Sections 180 and 139 of the N.I. Act.
12. The Appellate Judge has no doubt differed from the said finding but no acceptable reasoning is forthcoming from the record that the conviction so recorded by the Trial Court was either capricious, unjust or unsustainable. The reasoning assigned by the Appellate Court to acquit the respondent-accused certainly finds no support from the evidence. I find, the Appellate Court's finding is virtually against the evidence on record. I am therefore satisfied that the order passed by the Appellate Judge to acquit the accused of the offence under Section 138 of the N.I. Act cannot be sustained. Accordingly, it is set aside and I affirm the finding recorded by the Trial Court against the respondent-accused.
13. In the result, the appeal is allowed. The order passed in Cri. A. No. 724 of 2002, dated 7-11-2003 by the XXV Additional City Sessions Judge, Bangalore, is set aside and the judgment passed by the Trial Court in CC No. 35132 of 2000, dated 22-11-2002 and the consequent sentence passed by it against the appellant is restored. The accused is granted six weeks time to pay the amount imposed as fine, in default, undergo imprisonment for a period of three months.