C. Anoop @ Anu S/O Late Channappa vs Krishnappa S/O Narasimhaiah

J.M. Khazi, J

This petition filed under section 397(1) r/w 401 Cr.P.C is by the accused, challenging his conviction and sentence for the offence punishable and Section 138 of the N.I Act imposed by the trial Court, which came to be confirmed by the Sessions Court by dismissing the appeal filed by him.

For the sake of convenience, the parties are referred to by their rank before they trial Court.

Complainant filed a private complaint against the accused alleging that he and accused are known to each other since several years. Accused approached the complainant for financial assistance as he was facing financial difficulties. In this regard complainant paid Rs.3.5 lakhs to the accused by way of hand loan in the second week of January 2016 by cash. Accused promised to repay the same within six months. However, accused failed to keep up the said promise and after repeated request and demand, he issued a cheque dated 14.07.2016 for a sum of Rs.3.5 lakhs with an assurance that it will be honoured on presentation. However, on 16.07.2016, when complainant presented the cheque for realization, it was dishonoured for want of sufficient funds. When complainant brought this fact to the notice of accused, he did not care to pay the amount due. Hence, complainant got issued a legal notice dated 12.08.2016. Accused has sent an evasive reply and without any alternative, complainant has filed the complaint.

After due service of summons, accused appeared and contested the matter. He pleaded not guilty and claimed the trial.

In support of his case, complainant got himself examined as PW-1 and relied upon Ex.P1 to 6.

During the course of his statement under Section 313 of Cr.P.C, the accused has denied the incriminating evidence led by the complainant.

Accused has examined himself as DW-1 and relied upon Ex.D1 and 2.

Vide the impugned judgment and order the trial Court convicted the accused and sentenced him to pay fine Rs.3,50,000/- in default to undergo simple imprisonment for three months.

Aggrieved by the same, the accused filed appeal before the Sessions Court. However, vide the impugned judgment and order the Sessions Court dismissed the appeal and thereby confirmed the order of the trial Court.

Being aggrieved by the same, the accused is before the Court contending that the impugned judgments and orders suffers from arbitrariness besides being perverse. In his reply notice, the accused has clearly stated that he never borrowed any loan from the complainant and on the other hand while borrowing loan of Rs.1,05,000/- from one Rajeev Reddy, he had issued blank cheque and though the accused repaid the said amount, the cheque was not returned and misusing the same, the complaint is filed. The accused has disputed the financial capacity of the complainant. However, complainant has failed to prove that immediately prior to the alleged advancing of loan to the accused, he was having financial capacity to lend the said money. Only on the basis of the presumption under Section 139 of the N.I. Act, the Courts below have accepted the case of the complainant. Despite the presumption under Sections 118 and 139 of N.I Act, having regard to the fact that complainant has failed to prove his financial capacity, the complaint is liable to be dismissed and prays to allow the petition, set aside the impugned judgments and orders of both Courts and acquit the accused.

On the other hand, learned counsel for complainant supported the impugned judgments and orders and pray to dismiss the petition.

Heard arguments of both sides and perused the record.

Thus, it is the definite case of the complainant that, owing to his acquaintance with the accused and at his request he lent a sum of Rs.3.5 lakhs by way of hand loan to him and towards repayment of the same, accused issued the subject cheque and on presentation it was dishonoured for want of sufficient funds and after issuing legal notice he has filed the complaint.

Accused has not only disputed the transaction in question, he has also denied acquaintance with the complainant. By sending reply to the legal notice, the accused has also disputed the financial capacity of complainant to lend huge sum of Rs.3.5 lakhs. Accused has alleged that he had borrowed a sum of Rs.1,05,000/-from one Rajeev Reddy and at that time a cheque was issued to him and despite repayment of the loan he did not return the cheque and misusing the same, the present complaint is filed.

Having regard to the fact that the accused has disputed his acquaintance with the complainant and also the transaction as well as the financial capacity of complainant to advance huge sum of Rs.3.5 lakhs, as held by the Hon’ble Supreme Court in APS Forex vs Shakti International Fashion Linkers Pvt. Ltd (APS Forex) (2020) 12 SCC 724, whenever accused rises issue of financial capacity of complainant, in support of his probable defence, despite presumption in favour of the complainant regarding legally enforceable debt under Section 139 of N.I. Act, onus shifts again on the complainant to prove his financial capacity by leading evidence, more particularly when it is a case of giving loan by cash and thereafter issue of cheque. In the light of the ratio of the Hon’ble Supreme Court, burden is on the complainant to prove his financial capacity. Therefore, it is necessary to examine whether the complainant has discharged the said burden.

To prove his financial capacity, the complainant has taken up a plea that at the relevant point of time, as per Ex.P-6 a tempo traveller bearing registration number KA-41–911 belonging to his wife was sold to one Prabhakar for Rs.4,80,000/-. On the overleaf of the said document, an endorsement is made that out of the sale consideration, a sum of Rs.75,000/- is received and balance would be paid in 15 days. During his cross examination complainant, who is who is examined as PW-1 has deposed that when the receipt was signed, no sum was received and he has volunteered that 21 days time was sought to pay the sale consideration. He has stated that the consideration of said tempo was paid through cheque and he has credited cheque to his account and he has no impediment to produce the document to evidence to said fact.

However, complainant has not chosen to produce his account extract to show that immediately prior to the lending of Rs.3.5 lakhs to the accused he was in receipt of Rs.4,80,000/- towards sale consideration of the tempo. He has also not chosen to examine the purchaser Prabhakar. When questioned whether he is ready to examine the said Prabhakar, the complainant has replied that Prabhakar is not ready to come and give evidence.

The accused has also disputed that complainant was owning the said vehicle. At least the complainant would have produced Registration certificate of the said vehicle to prove that his wife was owning the said vehicle and after transfer it is standing in the name of purchaser. Though the complainant has claimed that the amount of Rs.3.5 lakhs paid to the accused was withdrawn from his account, standing in Corporation Bank and there is no difficulty for him to produce the same. However, the complainant has not produced his account extract to evidence the said fact. It would have been sufficient for the complainant to produce the said account extract to establish Rs.3.5 lakhs paid to the accused was withdrawn by him from his account. Thus, the complainant has failed to prove his financial capacity, despite making a vain attempt to prove that a vehicle was sold for Rs.4,80,000/- and out of the said amount, he lent Rs.3.5 lakhs to the complainant.

In the complaint, the complainant has specifically pleaded that the sale of tempo was made on 18.05.2015 and the loan was advanced during January 2016 and the accused has issued the cheque on 14.07.2016. However, during his cross-examination, the complainant has stated that accused gave him cheque during January 2016. This also creates doubt as to the veracity of complainant’s case. Anyhow, having failed to prove his financial capacity, the complainant has failed to discharge the burden placed on him beyond reasonable doubt.

The trial Court as well as the Session Court have failed to examine the oral and document evidence placed on record in proper perspective. They have swayed away by the fact that presumption under Sections 118 and 139 of N.I. Act is operating in favour of the complainant. But both Courts have failed to examine whether the complainant has proved his financial capacity or not, and thereby fell into error. Consequently, the impugned order has caused gross miscarriage of justice, manifest illegality and suffers from perversity calling for interference by this Court under exercise of revision jurisdiction.

In the result, the impugned judgments and orders of trial Court as well as the Sessions Court are liable to be set aside and the accused is entitled for acquittal and accordingly the following:

ORDER

(i) Petition filed by the petitioner under section 397 r/w 401 Cr.P.C is allowed.

(ii) The impugned judgment and order dated 20.09.2017 in C.C.No.22772/2016 on the file of XXII ACMM, Bengaluru and judgment and order dated 14.03.2019 in Crl.A.No. 1485/2017 on the file of LVI Addl.City Civil & Sessions Judge, Bengaluru are set aside.

(iii) Consequently, the accused is acquitted for the offence punishable under Section 138 of N.I Act. His bail bond stand discharged.

(iv) The Registry is directed to send back trial Court as well as Sessions Court records along with copy of this judgment forthwith.