Dr. N. Krishna Reddy vs Mr. Sanjay

V. Suri Appa Rao, J.—This Revision Petition is filed challenging the judgment of acquittal recorded by the Fast Track (Sessions). Judge, Bangalore City (F.T.C. NO. VI) in Crl. Appeal No. 1194/2007, whereby the learned Sessions Judge set aside the judgment of conviction and order of sentence passed against the respondent by the XX ACMM and XXII ASCJ, Bangalore City, wherein the respondent/accused was convicted u/s 138 of Negotiable Instruments Act, sentenced to pay a sum of Rs. 30,00,000/- i.e. double the cheque amount and he further directed that out of which a sum of Rs. 29,50,000/- shall be paid to the complainant and balance of Rs. 50,000/- shall be credited to the State Government. For the sake of convenience, the parties are referred to as they are arrayed before the Trial Court.

The relevant facts leading to filing of this Revision Petition are as hereunder:

The Complainant was working as Medical Officer in NIMHANS Hospital, Bangalore. On 14.10.2003 the accused approached the complainant for hand loan of Rs. 15,00,000/- for his real estate business. The complainant therefore, gave hand loan of Rs. 15,00,000/- to the accused. Thereafter, the accused issued a cheque bearing No. 657498 dated 26.04.2004 drawn on ICICI Bank, Bangalore Cantonment Branch, Bangalore for a sum of Rs. 15,00,000/-. The complainant presented the cheque through his Banker State Bank of Mysore, Wilson Garden Branch, Bangalore. But the same was returned on 28.04.2004 with an endorsement ''account closed''. Thereafter, the complainant got issued legal notice dated 24.05.2004 through registered post acknowledgment due and the notice sent under UCP was duly served on the accused. But the accused deliberately avoided the notice sent under registered post. When the accused failed to comply with the demand of notice, the complainant filed the complaint before the Trial Court invoking the provision of Section 138 of Negotiable Instruments Act.

The complainant is examined as PW-1. He also examined the Bank Manager, ICICI Bank as PW-2 and filed Ex. P1 to P8. The accused is examined as DW-1 and no documents are marked.

Considering the oral and documentary evidence produced by both the parties, the Trial Court observed that the complainant who is working as Medical Officer in NIMHANS Hospital and was drawing salary of Rs. 22,000/- per month and also getting rent from the building owned by him and also getting income from agricultural properties, having capacity to lend the amount and that the accused has failed to rebut the presumption u/s 138 of N.I. Act. Accordingly, the Trial Court found the accused guilt of the offence u/s 138 of N.I. Act and passed the above order of conviction and sentence.

Being aggrieved by the Judgment of conviction and order of sentence, the accused/respondent has filed Criminal Appeal No. 1194/2007 before the Fast Track Court, Bangalore City. The learned Sessions Judge, Fast Track Court after hearing both the parties allowed the criminal appeal and set aside the judgment of conviction recorded by the Trial Court on the ground that the complainant failed to prove that he was having sufficient means to lend a sum of Rs. 15.00 lakhs to the accused on the sole ground while accepting the other findings of the Trial Court about the service of notice and other requirement sunder Section 138 of N.I. Act.

In evidence, PW-1 - the complainant has stated that he had withdrawn Rs. 3,50,000/- from PF account in the year 2003, borrowed Rs. 4,50,000/- from his sister-in-law Smt. Sujatha Reddy and Rs. 2,50,000/- from his friend C.B. Shivalinge Gowda and he is having amount of Rs. 4,50,000/- in his house. Out of the above source of income he lent a sum of Rs. 15.00 lakhs to the accused when he requested him to arrange money for his real estate business by promising to repay the same within a short time. In the oral evidence, the accused has admitted his signature on the cheque, amount mentioned in the cheque and the issuance of the cheque in favour of the complainant. In the evidence he has stated that he borrowed Rs. 20,000/- from the wife of the complainant and in that connection, he issued Ex. P1 - cheque for Rs. 20,000/- to the wife of the complainant as security. He further contended that the said cheque was misused by the complainant and filed the false case against him. Thus, it is clear from his own evidence that he has not issued blank cheque in favour of the wife of the complainant. He has specifically stated that he has issued cheque for Rs. 20,000/- to the wife of the complainant. But as seen from Ex. P1 - cheque issued by the accused, the amount borrowed by the accused is Rs. 15.00 lakhs, there is no interpolations or correction in the cheque issued by the accused altering the amount of Rs. 20,000/- to Rs. 15,00,000/-. He has further clearly admitted in his evidence that he issued Ex. P1 cheque out of his bank account and it bears his signatures and name of the payee i.e. the complainant. Therefore, it is clear from his evidence that Ex. P1 - cheque is issued in favour of the complainant for Rs. 15.00 lakhs and that it is not the same cheque issued to the wife of the complainant for Rs. 20,000/-. His contention is that the cheque issued in favour of the wife of the complainant issued for Rs. 20,000/- was utilized by the complainant to file a false case and he specifically stated that he has mentioned the amount in cheque as Rs. 20,000/- in favour of the wife of the complainant and not the blank cheque and also mentioned the name of the wife of the complainant and question of utilizing the same and filing the complaint by the complainant for Rs. 15.00 lakhs would not arise. The only defence by the accused is that the complainant had no capacity to lend Rs. 15.00 lakhs.

Learned Counsel for the complainant submits that the complainant is drawing salary of more than Rs. 1.00 lakh and he was also getting rent from the house and he was also having agricultural income, so he paid the amount to the accused whenever the accused requests for, on installment basis and by the date of issuing cheque i.e. 26.04.2004 the accused received total sum of Rs. 15.00 lakhs from the complainant and on the same day he issued cheque for Rs. 15.00 lakhs drawn on ICICI Bank, Bangalore Cantonment Branch, agreeing to repay the same within a short time.

The evidence of PW-1 and the documents filed by him clearly indicates that HUF account for the assessment year and individual assessment are filed by the complainant. Both accounts were summoned by the Income Tax Department and the entries made in both the accounts and after relying on the evidence of the complainant about his source of income the Trial Court has rightly came to the conclusion that the complainant was having sufficient means to lend the amount of Rs. 15.00 lakhs to the accused and when once the accused has admitted the issuance of the cheque-Ex. P1 he has to rebut the presumption u/s 139 of the Act that Ex. P1 was not issued towards discharge of legally enforceable debt. The accused has failed to prove the same.

The Trial Court after appreciation of the entire evidence on record and statement of bank account and considering the other income of the complainant rightly came to the conclusion that the complainant had sufficient means to lend the amount of Rs. 15.00 lakhs.

In the evidence, the accused has clearly admitted that the complainant issued legal notice to the same address where he is residing. The Trial Court considering the evidence of both the parties rightly came to the conclusion that Ex. P3 - legal notice was sent to the correct address of the accused and the accused does not dispute the residential address mentioned in Ex. P3 - notice. The Trial Court therefore felt that the complainant has duly complied with the provision of Section 138(B) of the N.I. Act and there is no dispute with regard to the issuance of the cheque by the accused to the complainant. It can be presumed that the accused issued cheque-Ex. P1 towards discharge of legally enforceable debt. The learned Sessions Judge allowed the criminal appeal filed by the respondent-accused without considering the income of the complainant and when once he admitted the issuance of Ex. P1 - cheque, which has been clearly mentioned the amount as Rs. 15,00,000/- in favour of the complainant, the Sessions Judge was not justified in holding that the complainant had no means to lend the amount ignoring the salary income, rents and agricultural income and also ignoring the entries made in the Bank Account produced by Income Tax Department.

In view of the above facts and circumstances of the case, this Revision Petition is allowed. The judgment dated 7th January 2010 passed by the Fast Track (Sessions) Judge, Bangalore City in Crl. Appeal No. 1194/2007 is hereby set aside. The judgment of the Trial Court in C.C. No. 21091/2004 dated 12th September 2007 is restored. The conviction of the accused u/s 138 of the N.I. Act is confirmed.

In so far as the sentence of payment of fine is concerned, the Trial Court imposed fine of Rs. 30.00 lakhs double the cheque amount of Rs. 15.00 lakhs, which is highly excessive and not justified under the facts and circumstances of the case. Therefore, the sentence imposed by the Trial Court is liable to be modified.

The respondent-accused is hereby sentenced to pay the principal amount of Rs. 15.00 lakhs and/another sum of Rs. 25,000/- to the credit to the Government. The respondent-accused is directed to pay Rs. 15,25,000/- instead of Rs. 30,00,000/- imposed by the Trial Court. With the above modification in sentence, this Revision Petition is allowed. The respondent-accused is directed to pay the fine amount of Rs. 15,25,000/- within three months from the date of this judgment.