This complainants appeal under Section 378(4) Cr.P.C. arises out of the judgment and order of acquittal dated 20.02.2015 passed by II Additional Civil Judge and JMFC-IV, Raichur in Criminal Case No.2675/2012. By the impugned judgment and order, the Trial Court has acquitted the accused/respondent for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short N.I. Act). CRL.A.NO.200042/20153
2. Appellant was the complainant and respondent was the accused before the Trial Court. They will be referred to hereafter with their ranks before the trial court. Complainant presented the complaint under Section 200 Cr.P.C. before the Trial Court alleging that the accused borrowed loan of Rs.6,00,000/- from him and towards discharge of the liability, issued cheque dated 27.02.2012 for the said sum drawn on Pragati Grameen Bank, Nijalingappa Colony Branch, Raichur. It is further alleged that on presentation the cheque was dishonored on 01.03.2012 for want of sufficient funds. It is further alleged that despite issuance of statutory notice dated 12.03.2012, the accused did not reply to the notice nor repaid the cheque amount thereby, he committed the offence punishable under Section 138 of N.I. Act.
3. The Magistrate on taking cognizance summoned the accused and recorded the plea of the accused on substance of accusation. The accused CRL.A.NO.200042/20154 denied the accusation and claimed to be tried. Therefore, the complainant got himself examined as PW.1 and got marked Exs.P1 to P6 to substantiate the allegations. The accused after his examination under Section 313 Cr.P.C. did not lead evidence but marked Exs.D1 to D3. The Trial Court after hearing both the parties by the impugned judgment and order acquitted the accused holding that:
i. The complainant has failed to prove his lending capacity, therefore, the presumption under Section 139 of N.I. Act is not available to him;
ii. The complainant though denied that he is in the habit of obtaining cheques and filing such complaints, Exs.D1 to D3 show that he has filed similar cases against others.
4. Sri Sachin M. Mahajan, learned counsel for the complainant seeks to assail the judgment of the Trial Court on the following grounds: CRL.A.NO.200042/20155
i. The accused does not dispute that the cheque was issued on his account and bears his signature. Though he contended that the loan amount was only Rs.25,000/-, he does not probabalise such contention and at the initial stage he did not even issue reply to the notice setting up such defence or denying the lending capacity of the complainant ;
ii. The documents produced by the accused himself proved the lending capacity of the complainant
iii. The Trial Court committed error in appreciating the provisions of Section 118 and Section 139 of N.I. Act. In support of his contentions, he relies upon the judgment of the Supreme Court in Kishan Rao vs. Shankargouda in Criminal Appeal No.803/2018.
5. Per contra, Sri Anilkumar Navadagi, learned counsel for the accused seeks to support the impugned CRL.A.NO.200042/20156 judgment and order of the Trail Court on the following grounds:
i. The initial burden of proving the existence of legal liability is on the complainant and without discharging that burden, the question of invoking Section 139 of N.I. Act does not arise ;
ii. The complainant failed to prove the lending capacity; and
iii. The complainant himself states in his cross- examination that he does not know Ex.P1 is in whose handwriting and that itself probabalised the defence of the accused that the blank cheque was issued.
6. Having regard to the rival contentions, the point that arises for consideration is:
Whether the impugned order of acquittal calls for interference by this Court?
CRL.A.NO.200042/20157
7. It is no doubt true that this is an appeal against the order of acquittal and in such case, the appellate Court cannot interfere in the matter unless it is shown that the order of acquittal is perverse and in gross violation of law.
8. The accused does not dispute that himself and the complainant were friends and his own defence shows that there were financial transactions between them. According to him, he had borrowed loan but the quantum of said loan was only Rs.25,000/-. Ex.P1 is the cheque in question. The accused does not dispute his signature on the same. He does not even dispute the said cheque was drawn on his account in Pragati Grameen Bank.
9. The service of notice Ex.P3 on the accused is also not disputed. In Ex.P3, the complainant claimed that the accused had borrowed Rs.6,00,000/- by issuing cheque drawn on Pragati Grameen Bank, CRL.A.NO.200042/20158 Raichur and it was returned with endorsement funds insufficient. If the complainant has manipulated the cheque and there was no legal liability, the conduct of the person of ordinary prudence is that he promptly replies the notice denying the liability or initiates legal action against the complainant for manipulation or forgery.
10. Drawing the cheque and presenting that to the account of the accused for realizaton though there is no legal liability is definitely a serious matter. The notice was served on 13.03.2012. The theory of concocting the cheque for Rs.6,00,000/- and incapacity of the complainant to lend such loan is raised for the first time in the cross-examination of PW.1 on 13.03.2013 that is after one year.
11. It is true that PW.1 has said that he does not know Ex.P1 is in whose handwriting. But, according to him, he has issued the said cheque and the accused CRL.A.NO.200042/20159 has received it. The accused does not suggest to PW.1 that the complainant himself has filled up the contents of Ex.P1. When a person issues a cheque, who has written that, shall be within the knowledge of the person who issues the same.
12. Having regard to the non-denial of signature on the cheque and suggestion regarding issuance of the same for liability of Rs.25,000/- instead of Rs.6,00,000/-, the presumption under Section 118 of the N.I. Act arises. The said presumption becomes stronger in view of the fact that the accused did not reply the notice denying the execution of the cheque or legal liability.
13. So far as lending capacity of the complainant, the accused admits that the complainant is a retired employee of KSRTC. He himself produces Ex.D1 to D3 contending that the complainant filed the suit and complaint against two other persons for CRL.A.NO.200042/201510 recovery of money and to prosecute one of them for the offence punishable under Section 138 of N.I. Act. Ex.D1 is the copy of the plaint in O.S.No.148/2011 on the file of the Senior Civil Judge, Raichur. The said suit is filed by the complainant against one Balanagouda claiming that he has lent Rs.7,00,000/- to the defendant in December, 2009 and the same is not repaid. Thus, he has claimed decree for Rs.9,66,600/-.
14. Ex.D2 is the copy of the complaint in PCR No.119/2012 filed against one Siddesh where the complainant has stated that said Siddesh had borrowed loan of Rs.50,000/- on 27.02.2012 by issuing cheque for Rs.50,000/- towards repayment without arranging for the funds.
15. Ex.D3 is a registered agreement of sale in respect of land bearing Sy.No.12/1 measuring 6 acres
33 guntas. The said agreement of sale reflects that the complainant has agreed to purchase the said land from CRL.A.NO.200042/201511 Balanagouda for a sum of Rs.4,80,000/- and has paid Rs.4,50,000/- as earnest money. Unless the complainant has sound financial status, he could not have entered into the said transactions. Therefore, the documents produced by the accused himself probabalise the lending capacity of the complainant.
16. Though the complainant is retired employee, the accused did not even suggest that pension is the only means for survival of the complainant. Under these circumstances, the Trial Courts finding that the complainant failed to discharge his initial burden of proof of lending capacity is perverse.
17. Once the lending capacity and issuance of cheque are proved, Section 139 of N.I. Act comes into operation. It raises the presumption that the cheque in question is for discharge of debt or liability. The Trial Court, relying on the judgment of this Court in Shiva Murthy vs. Amruthraj ILR 2008 KAR 4629 and the CRL.A.NO.200042/201512 judgment of Madhya Pradesh High Court in Brajgopal Singh Swarnkar vs. Girish Raisen 2014 (1) DCR 539, held that the complainant is not entitled to the benefit of Section 139 of N.I. Act.
18. The discussions made herebefore show that first of all, the finding of the Trial Court that the lending capacity is not proved itself is erroneous. Regarding presumption under Section 139 of N.I. Act, the Honble Supreme Court in the latest judgment in Kishan Raos (supra) case referring to several earlier judgments on the point held that mere denial of the accused of existence of debt shall not serve to rebut the presumption and accused has to adduce evidence in support of his defence. In the light of the said judgment and discussions made above, the impugned judgment and order of acquittal is perverse, illegal and liable to be set- aside. Therefore, the appeal is allowed. CRL.A.NO.200042/201513
19. Acting under Section 386(a) of Code of Criminal Procedure, 1973 the respondent/accused is convicted for the offence punishable under Sections 138 of N.I. Act, 1881.
20. Having regard to the age of both parties and the time occupied in this litigation, accused is sentenced to fine of Rs.8,00,000/- (Rupees Eight Lakhs). In default to pay fine, accused shall undergo simple imprisonment for three months. Out of the said sum of Rs.8,00,000/-, Rs.7,75,000/- shall be disbursed to the complainant as compensation. The remaining amount shall be confiscated to the State. Trial Court to issue conviction warrant accordingly. Sd/- JUDGE Srt/sn