Annayaa Sheregar vs K. Santoshkumar Shetty

Anand Byrareddy, J.—Heard the learned counsel for the petitioner and the learned counsel for the respondent. This Court having heard this matter at the stage of Admission, earlier had opined that the petition is liable to be rejected. However, as a last resort, the learned counsel for the petitioner had sought time to report settlement on the footing that certain amount would be paid, on the basis of which the matter could be compounded. However, the learned counsel on further instructions stated that he has a case on merits and sought leave to file an application to produce additional documents in support of his case. The said application numbered as I.A. 1/2014 is now placed before the Court. In the application, it is claimed by the petitioner that during the pendency of the case, the petitioner could not produce the documents such as bank pass book, RC book and contract whereby certain civil works were allotted by the Zilla Panchayat, Udupi. On account of communication gap between the counsel and the petitioner, on the footing that the petitioner was residing in Mumbai, when the case was pending before a Court at Udupi and therefore, there was a communication gap resulting in the petitioner not being able to furnish the documents which are relevant for the case and hence, has sought permission to produce the same and for the same to be considered in support of the petitioner''s case.

The learned counsel for the respondent has filed objections vehemently opposing the application and seeks to file across the Bar, which practice is deprecated. However, the petition is being considered for final disposal. The objections are taken on record. The objections are formal in nature denying all the documents now sought to be produced, could be taken on record, if the respondent had an opportunity before the Trial Court as well as the Lower Appellate Court to support his case, by all the documents and materials which were at his command and present the documents sought to be produced, would not in any manner advance the case of the petitioner. When all material are already on record, the petitioner''s defence is not tenable. In any event, the question of considering the additional documents sought to be produced by the petitioner could only be, if there is an area of doubt that could be shown, insofar as the reasoning of both the courts below in arriving at findings against the petitioner. Therefore, when the facts of the case and the findings of the courts below are taken into account, there is little merit in the case of the petitioner and the additional documents now sought to be produced belatedly would hardly advance the case of the petitioner.

The crux of the defence set up by the petitioner who was accused before the Trial Court was that the petitioner and respondent were Civil Contractors and close to each other, and it was only when transaction between the petitioner and the respondent, whereby, the petitioner had issued a cheque for a sum of Rs. 69,800/-, not in discharge of any legal liability, but as security for certain amounts that were to be paid to the respondent by a third party, in relation to a contract and though the respondent had received such amounts from the third party, the cheque issued as security insofar as the said amount was received by the respondent, has been misused in the same being presented for encashment, though the respondent was not entitled to do so and in this regard, such a defence is sought to be raised by way of suggestions made to the complainant in the course of his cross-examination before the Trial Court. Though there is a reply to the notice under Section 138 of the NI Act, issued by the complainant, in the first instance, the respondent had not raised such a contention to the effect that the cheque was not issued in discharge of legal liability. Though the petitioner had in his reply at Ex. P6 had contended that the petitioner had entered into a partnership in respect of certain civil work for formation of roads at Aloor Village, Kundapur Taluk, that the respondent entered into an agreement in the month of August, 2004 where it was agreed that the petitioner would issue a cheque for a sum of Rs. 69,800/- as security till the realization of the amount due, for the concluded contract work and that the cheque was to be returned on receipt of such monies by the respondent. He had failed to do so and therefore, it was denied that the cheque was issued in discharge of any legal liability. Beyond this and apart from suggesting to the complainant during the course of his cross-examination on this aspect of the matter, there was no material evidence produced to demonstrate that it was indeed so. According to the complainant, it was a got up document and it was sought to be demonstrated and shown as Ex. D2, was apparently a got up document as is evident from a plain examination of the same. Though it is on the letter head of the complainant, the contents of the letter are filled in hand is not in the hand writing of the complainant, nor does it tally with the signature and the ink used on the document. In other words, it was the complainant''s case that the letter head which has a rubber seal of the complainant with his signature at the bottom has been filled in, to the convenience of the accused - petitioner, only to make out a case, as if the cheque in question was issued as security in respect of some other transaction.

On the other hand, the complainant had sought to demonstrate that insofar as the amount of Rs. 69,800/- was concerned, it was withdrawn from his account. It was given to the petitioner as demonstrated by independent bank documents which could not be disputed and it is this area of controversy which has been addressed by the Trial Court and a finding is given to the effect that Ex. D1 did not invoke the confidence of the court below and since the cheque in question was in fact issued on the account of the petitioner and that the signature was also not denied except to contend that it was not issued in discharge of any legal liability, but was issued as security as afore said. The court below has negated the defence and has held that the offence under Section 138 of the NI Act was proved and has sentenced him to pay a fine of Rs. 1,39,600/-, in default to undergo imprisonment for a period of six months and the Appellate Court has also confirmed the same. It is that which is under challenge in the present petition.

As already stated, the additional documents now sought to be produced by the petitioner, such as, bank passbook reflecting certain amount being withdrawn by the respondent which is from the account of the petitioner and the vehicle which has been sold in favour of the accused/petitioner as referred to in Ex. D1, sought to be demonstrated with reference to a copy of the RC book of the said vehicle and apart from the fact that there were such transactions in relation to civil works that were being carried on by the respective parties and in one instance where the respondent has acted as power of attorney holder of the petitioner and it is sought to be demonstrated that the categorical statement of the complainant to the effect that apart from the cheque transaction, there was no other transaction between the parties, has proved to be false when there were a series of transactions over the years.

Therefore, the defence of the petitioner to the effect that the cheque was issued only as a security and not in discharge of legal liability, was established. Even with reference to the additional documents and if it could be taken on record and it could be said that there were series of transactions between the petitioner and the respondent. The question whether the cheque in question has been issued as security and in discharge of legal liability, would not advance the case of the petitioner. If it was the case of the petitioner that the cheque was issued as security in order to ensure that the respondent would receive certain payments which were due from a third party, if and when the respondent had received such payment, it was incumbent on the petitioner to insist that the cheque issued as security be returned to him. He ought to have put the respondent on notice if there a is default to return the cheque. This is not forthcoming. It might have best thrown a doubt on the bona fides of the complainant in personal, to establish his case, that by itself would not absolve the petitioner. However, insofar as the punishment that is imposed by the courts below, in the petitioner having been convicted for the offence punishable under Section 138 of the NI Act, appears to be disproportionate. In the petitioner is punished with imprisonment of six months and also been mulcted with a fine, which far exceeds the amount of the cheque. In order to ensure that the punishment is not disproportionate and in order to meet the ends of justice, the petition would have to be partly allowed in line with the proposal whereby the matter was to be compounded. Consequently, the fine is modified to be limited to a sum of Rs. 1,00,000/-, which amount of deposit shall be paid to the respondent herein as compensation. Therefore, the petition is allowed in part. The judgment of the Trial Court as well as the Appellate Court are modified in terms as above. In the event of failure to deposit the amount, the petitioner shall suffer simple imprisonment of two months. The amount shall be deposited within four weeks.