K.R. Nandakumar vs Rama Naika

A.S. Pachhapure, J.—The appellant has challenged the Judgment and Order acquitting the respondent for the charge under Section 138 of the Banking Regulation Act [hereinafter referred to as "the N.I. Act" for short] on a trial held by the learned JMFC., Hassan.

The facts reveal that the appellant, who is said to be the friend of the respondent, on the request, he advanced a loan of Rs. 3,00,000-00 on 29.08.2005. Towards the discharge of the said debt, the respondent issued a cheque dated 30.08.2005, drawn on Syndicate Bank for a sum of Rs. 3,00,000-00. On 02.09.2005, he presented the said cheque for encashment, it returned with the endorsement "insufficient funds". The appellant issued a notice. As there was no compliance, a complaint was filed before the trial Court under Section 200 Cr.P.C. to initiate action against the respondent for the offence punishable under Section 138 of the Act.

In the trial, the complainant was examined as P.W. 1 and a witness P.W. 2. In their evidence, Exs. P1 to 7 were marked. The respondent was examined as D.W. 1 and his wife-D.W. 2. In their evidence, Exs. D1 to 13 were marked.

The trial Court after hearing the counsel and on appreciation of the evidence, acquitted the respondent for the charge under Section 138 of the N.I. Act under the impugned Judgment and Order, which is challenged in this Court by the appellant.

I have heard learned counsel for both the parties.

It is the contention of learned counsel for the appellant that a presumption arises under Section 139 of the N.I. Act about the existence of a debt and the liability to repay the sum and as the cheque-Ex. P1 is admittedly signed by the respondent, he submits that there is no evidence placed on record to rebut the said presumption. He submits that the defence of the accused is inconsistent and he has admitted the liability at least to the extent of Rs. 1,25,000-00 and there is no consistent version with regard to repayment of the dues under the receipts-Exs. D2 and 3 and therefore, he submits that the trial Court committed an error in accepting the defence and granting an order of acquittal. Furthermore, he submits that as held by this Court, a license under the Money Lenders'' Act is not necessary to convict the respondent for the said charge and the trial Court committed an error in granting an acquittal on that ground. Furthermore, he submits that there is no material worth acceptance regarding repayment of the dues and when the respondent admits that there is liability on his part, his admission is sufficient to grant an order of conviction. On these grounds he has sought for setting aside the impugned Judgment and Order and to convict the respondent for tine charge under Section 138 of the N.I. Act.

On the other hand, learned counsel for the respondent submits that there was a loan transaction in the year 2004 and the defence put-forth is with regard to the said loan transaction and as there was no transaction as alleged by the appellant on 29.08.2005, the question of issuing a cheque dated 30.08.2005 does not arise for consideration. He submits that the documents which were taken up by the appellant at the time of transaction in the month of January 2004 have been misused and by filling the blanks, the cheque under Ex. P1 has been created by the appellant. It is submitted that there is consistent defence put-forth by the respondent which raises serious doubt with regard to the case put-forth by the appellant and therefore, submits that the trial Court was justified in granting an order of acquittal.

I have scrutinized the evidence of both the parties led before the Court and also perused the documents.

Ex. P1 is the cheque dated 30.08.2005. It is the case of the appellant that he advanced a sum of Rs. 3,00,000-00 on 29.08.2005 and on the next day, the cheque was issued by the respondent towards discharge of the debt. It is relevant to note that immediately on the expiry of 2 days i.e., on 02.09.2005, the appellant presented the cheque for encashment. The said cheque, which was presented returned with same day for insufficient funds. So, the advancement of the loan is 3 days prior to the date on which the cheque was presented for encashment.

When a person received a huge sums of Rs. 3,00,000-00 on a specified day for the purpose of incurring the family expenses as alleged by the appellant in his complaint, rather it is unimaginable that he has to repay the said sum within 3 days. Here is the event which is unbelievable and unacceptable. Therefore, a serious doubt arises with regard to the very transaction said to have entered into between the parties on 29.08.2005.

That apart, in the evidence, P.W. 1 has not stated any such circumstances compelling him to present the cheque within 3 days. Furthermore, it is relevant to note that it is on 30.08.2005, the date on which the cheque Ex. P1 was issued by the respondent, a complaint was filed by the respondent to the Police and the copy of the said complaint has been produced at Ex. D4. Even in this complaint as well, the respondent though admitted that he has taken a sum of Rs. 1,25,000-00, which was much earlier to the date of the complaint dated 30.08.2005. The complaint having been filed by the respondent is not seriously disputed. So, when the relationship between the parties was cordial either on 29.08.2005 or 30.08.2005, the question of the respondent filing a complaint on the very day on which day he issued the cheque raises a serious doubt in the case put-forth by the appellant.

It is no-doubt true that in the reply notice issued by the respondent, though it is stated that he had taken a sum of Rs. 1,25,000-00 in the month of January 2004, he has not referred repayment under Exs. D2 and 3. Exs. D2 and 3 are two xerox copies of the receipts produced by the respondent. Ex. D2 is for payment of Rs. 54,310-00 and Ex. D3 is for payment of Rs. 87,000-00. There is no reference of these two receipts in the reply notice that has been issued by the respondent. Now, so far as this transaction is concerned, it is entirely a different transaction than the transaction that has been put-forth by the appellant. This transaction pertains to the loan advanced by the appellant in the month of January, 2004. It was not necessary for the respondent to establish this transaction or to put-forth a plea with regard to repayment as the transaction which has been put-forth by the appellant is a different transaction which is said to have taken place on 30.08.2005. Therefore, mere non-reference of Exs. D2 and 3, the part payments made with regard to sum of Rs. 1,25,000-00 in the reply notice is not sufficient to reject the defence put-forth.

So far as the payment of Rs. 3,00,000-00 is concerned, except the cheque-Ex. P1 there is no other material placed on record. That apart, it is the defence of the respondent that Ex. P1 was issued at the time of transaction for a sum of Rs. 1,25,000-00 in the month of January, 2014 and it is the specific defence of the respondent that it was a blank cheque. Now, as could be seen from Ex. P1, it is dated 30.08.2005. The signature on the cheque is in different ink. The contents of the cheque are in different ink and different handwriting. Therefore, the circumstances aforesaid in the cheque-Ex. P1 would support the defence of the respondent that a blank cheque was issued and the same has been filled up. So, this circumstance, which has been brought on record prove that the document-Ex. P1 was a blank cheque, which is filled in later and it supports the evidence put-forth by the respondent.

So far as the license is concerned, Ex. D8 to 13 are the complaints filed by the appellant against the respondent therein under the provisions of Section 138 of the N.I. Act for taking action for issuing the cheque which were bounced on presentation. From those materials, it is proved that the appellant is having series of transactions. Reliance is placed by learned counsel for the appellant on the decision of the this Court reported in S. Parameshwarappa and P. Ratna Vs. S. Choodappa, ; wherein this Court held that merely because that a license under the provisions of the Karnataka Money Lenders Act is not obtained, the proceedings initiated for violation of Section 138 of the N.I. Act are not barred. So far as the findings of the trial Court is concerned it is inconsistent with the principles laid-down by this Court in the aforesaid Judgment. But, anyhow, as could be seen from the material placed on record and appreciation of the evidence, there is a probable defence, which has been put-forth by the respondent to raise a serious doubt with regard to transaction in question. Therefore, I do not find any grounds to call for interference in the impugned Judgment and Order.

That apart, this is an appeal against acquittal. The appellate Court will slow in interfering with such order. Even if a second view is possible, the one accepted by the trial Court cannot be disturbed. For these reasons, I do not find any merit in this appeal and it is accordingly dismissed.