N.V Ramana, J.— Leave granted. This appeal by special leave arises out of the judgment dated 22-8-2012 passed by the High Court of Karnataka, Circuit Bench at Dharwad, in Krishnanand v. Ramdas Criminal Appeal No. 832 of 2007 whereby the High Court set aside the judgment and order of the JMFC (IInd Court), Karwar acquitting the appellant herein of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short “the Act”).
2. The facts leading to this appeal, in a nutshell, are that a cheque for Rs 5,00,000 issued by the appellant in favour of the respondent was dishonoured by the bank when it was presented for realisation by the respondent, as the appellant had instructed the bank to stop the payment. After receiving such information from the bank, the respondent served a legal notice calling upon the appellant to pay the cheque amount. Upon failure of the appellant to obey the legal notice warranting him to pay the cheque amount of Rs 5,00,000, the respondent filed a complaint case against the appellant for the offence punishable under Section 138 of the Act. The Judicial Magistrate (First Class), Karwar took cognizance of the offence, recorded statement of the complainant under oath, registered the case and summoned the appellant-accused. The appellant pleaded not guilty and claimed trial.
3. Before the trial court, the respondent complainant solely led his own evidence as PW 1, whereas the appellant-accused in his defence led evidence of six witnesses. The case of the complainant was that he had given a hand loan of Rs 1,50,000 to the appellant-accused and three-and-a-half years thereafter he had again given Rs 25,000 as hand loan, thus in all, the appellant-accused owed him Rs 1,75,000 and to discharge this liability the cheque for Rs 5,00,000 was drawn, but the same stood dishonoured at the instructions of the appellant-accused. Whereas, the case of the appellant before the trial court was that he had entered into an agreement with the complainant to purchase 3 acres of land belonging to the complainant for a total consideration of Rs 10,00,000 and for that purpose, an advance of Rs 30,000 in cash was paid and the cheque in question for Rs 5,00,000 was handed over to the complainant in the presence of B.S Pai (DW 2). When the complainant failed to execute the sale agreement and was not even willing to return the advance amount of Rs 30,000 and the cheque of Rs 5,00,000, he had to instruct the bank to stop payment against the said cheque.
4. The trial court, taking note of financial condition of the complainant who was working under the accused, observed that the complainant has failed to lead any evidence to corroborate his version that the cheque issued by the appellant was to discharge the liability towards the complainant. Keeping in mind the corroborative and unshaken defence version, the trial court found fault with the respondent complainant and observed that instead of executing an agreement to sell and instead of repaying the advance money and returning the cheque, a false complaint was filed by the respondent complainant against the appellant-accused. The trial court, therefore, dismissed the complaint and acquitted the appellant-accused of the offence.
5. Against the judgment of the trial court dismissing the complaint and acquitting the accused, the complainant preferred criminal appeal before the High Court. The High Court while allowing the appeal, set aside the judgment of the trial court and sentenced the appellant-accused to pay a fine of Rs 8,50,000 within a period of eight weeks, failing which, to suffer simple imprisonment for a period of six months. Aggrieved by the reversal of his acquittal, the appellant-accused filed the present appeal.
6. The learned counsel for the appellant-accused contended that the cheque in question was in fact issued as part-payment of the agreed sale/purchase of 3 acres of land belonging to the complainant for a total consideration of Rs 10,00,000, out of which an initial amount of Rs 30,000 was also paid by the appellant in cash and the complainant was supposed to execute a written sale agreement. As the complainant had not come forward for giving finality to the commitment by execution of written sale agreement and even denied to return the advance payment of Rs 30,000 and the cheque in question, the appellant had no option but to request his banker to not honour the cheque. The complainant mischievously cooked up the story of giving hand loan to the appellant which the trial court had rightly disbelieved and dismissed the complaint. Although the respondent complainant miserably failed to establish the fabricated story of giving hand loan to the appellant with any reliable evidence, the High Court took an erroneous view and wrongly set aside the judgment of the trial court and sentenced the appellant under Section 138 of the Act. The learned counsel, therefore, submitted that the impugned order Criminal Appeal No. 832 of 2007 is not justified and the same deserves to be set aside.
7. On the other hand, the learned counsel for the respondent complainant submitted that there was no error in the impugned judgment Criminal Appeal No. 832 of 2007 and the High Court has rightly allowed the appeal of the complainant. The complainant had raised a sum of Rs 1,50,000 by obtaining loan from Akshya Bank to extend hand loan to the appellant-accused and 3½ years thereafter, a further sum of Rs 25,000 was also given and the cheque for Rs 5,00,000 was meant for the total repayment of the advanced amount of Rs 1,75,000. He further submitted that there was no transaction of sale/purchase of land between the parties and the accused wanted to avoid repayment of the hand loan, in the process of which he instructed the banker not to pass the cheque. The High Court has, therefore, correctly dealt with the matter and rightly sentenced the accused who, knowing fully the eventuality of the offence, committed the same deliberately. Hence the learned counsel prayed that the appeal lacks merit and the same deserves to be dismissed.
8. We have heard rival contentions of the learned counsel at length. We find from the record that admittedly, the appellant-accused deals with sale and purchase of landed properties and the respondent complainant works as a lorry driver under him with a salary of Rs 2500 pm and Rs 20 per day towards miscellaneous expenses (bhatta). Admittedly, the cheque in question was for Rs 5,00,000 and all the way the stand of the complainant was that he had given a hand loan of Rs 1,75,000 to the appellant-accused. We find no material on record in support of the claim of the complainant giving hand loan to the appellant-accused. There was also no calculation of account or stipulation of any interest on the alleged loan amount to show as to how the amount of Rs 5,00,000 was figured, in return of a hand loan of Rs 1,75,000, if at all taken by the appellant from the complainant. It is also not on record whether there was sufficient balance amount or not in the bank account of the accused when the cheque was dishonoured by the bank. The complainant himself stated in the cross-examination that after the cheque was returned without payment, he has not made any enquiry with the bank as to whether sufficient funds were available or not in the account of the accused. In the absence of any authenticated and supporting evidence, we cannot believe that the respondent complainant who is employed under the appellant-accused, has raised an amount of Rs 1,75,000 that too by obtaining loan of Rs 1,50,000 from a bank, only to give hand loan to his employer. As the complainant himself admitted that his net savings in a year come to about Rs 10,000, it is not trustworthy that he was in a position to extend hand loan of such a big amount to the appellant.
9. Whereas, the evidence of Mr B.S Pai (DW 2) fully corroborates the version of the appellant. He deposed that the talks of sale/purchase of 3 acres of land were held between the parties in his presence. The appellant agreed to purchase 3 acres of land belonging to the complainant and the appellant had paid an amount of Rs 30,000 as advance and handed over a cheque for Rs 5,00,000. It is also noteworthy that the complainant has not rebutted the evidence of DW 2 in the cross-examination. Further, the firm and unshaken evidence of Mr D.R Bhat, a member of Karwar Bar Association (DW 6) also corroborates the sale purchase deal between the parties. It is evident from the record that DW 6 has clearly and categorically deposed that the appellant stated to him about four years back that he had entered into an agreement with the complainant in presence of B.S Pai (DW 2) to purchase 3 acres of land belonging to the complainant and also paid Rs 30,000 in cash as advance money and issued a cheque for Rs 5,00,000. Looking at the corroborative evidence adduced by the defence witnesses and more particularly, in the absence of any material evidence in support of the claim of the respondent complainant, we cannot uphold the impugned judgment Criminal Appeal No. 832 of 2007.
10. For all the aforesaid reasons, the appeal deserves to be allowed and is accordingly allowed. The impugned judgment Criminal Appeal No. 832 of 2007 of the High Court is set aside and the judgment of the trial court is restored. The appellant is at liberty to withdraw the amount of Rs 1,75,000 with accrued interest if any, deposited by him before the trial court in accordance with this Court's order dated 30-11-2012 SLP (Cri) Crl. MP No. 24996 of 2012, (2014) 12 SCC 625 (F2).