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Judgment
H.P. Sandesh, J
CAV JUDGMENT
Heard the learned counsel for the appellants. The respondent though served is unrepresented.
This appeal is filed against the judgment of acquittal passed by the Trial Court for the offence punishable under Section 138 of the Negotiable Instruments Act (‘NI Act’ for short) in C.C.No.307/2008 vide order dated 21.08.2023, on the file of the Additional Civil Judge and JMFC, Chikballapura.
The factual matrix of the case of the complainant is that the complainant and the accused were having acquaintance with each other as they are friends and the complainant is a businessman and in this relation the accused approached the complainant in the month of May 2007 and requested him to lend a hand loan of Rs.2 lakhs for his financial necessities. Hence, the complainant arranged a sum of Rs.2 lakhs and lent the same to the accused in the second week of May 2007 and the accused assured to repay the same within six months from the said date. Thereafter, the complainant approached the accused for repayment of loan and the accused issued a cheque for a sum of Rs.2 lakhs dated 15.03.2008 towards discharge of his liability. When the said cheque was presented, it was dishonoured with an endorsement “insufficient funds” and hence the complainant approached the accused and he gave evasive reply and hence he issued s legal notice on 31.03.2008 and the same was sent through RPAD as well as COP. On receipt of notice, the accused gave untenable reply and hence complaint was filed and cognizance was taken and the accused was secured and he did not plead guilty and hence the complainant examined himself as P.W.1 and got marked the documents at Exs.P.1 to 6. The accused was subjected to 313 statement and he lead defence evidence by examining himself as D.W.1 and got marked the documents at Exs.D1 to 9. The Trial Court having considered both oral and documentary evidence placed on record, did not accept the case of the complainant and acquitted the accused in coming to the conclusion that the complainant was not having capacity to lend money and taken note of the handwritings are in different ink and no document was taken place prior to 15.03.2008 i.e., at the time of advancing loan. The Trial Court also observed that the complainant has not put forth about requirement of the accused and dismissed the complaint. Hence, the present appeal is filed before this Court.
The main contention of the learned counsel for the appellants is that the Trial Court committed an error in not accepting the case of the complainant and the Trial Court seriously erred in holding that there is nothing on record to show as to the reason for the cheque been returned as unpaid. The Trial Court has utterly failed to consider that on the reverse of the Cheque, an endorsement has been made as “insufficient funds” and the bank authorities and the Post Office authorities have affixed their signature and seal in this regard. The cheque is marked as Ex.P.1 and Ex.P.2 is an endorsement issued by the Post Office in support of Ex.P.1 showing that the cheque was dishonoured and has bounced. Exs.P.1 and 2 have to be read together and conjointly. It is not the case of the accused that the cheque was not returned for insufficient funds and the accused does not dispute the same. In the course of cross-examination, the accused admits that he had ascertained that the cheque was presented on 15.03.2008. When the cheque was presented, there was no sufficient fund in his account. The Court fails to consider this material evidence and erroneously held that there is no endorsement as to why the cheque was returned.
The learned counsel contend that the Trial Court has erred in holding that the accused has put forth a probable defence by producing the proceedings in PCR No.29/2010 filed by one Sri R.N.Bachchappa against the complainant, wherein complaint under Section 138 of the NI Act has been filed for dishonour of cheque drawn for a sum of Rs.5 lakhs. The cause of action for that complaint is said to have arisen on March 2009, which is subsequent to the complaint in question. The Trial Court erroneously relied upon the same. The cheque in that complaint was lost when the complainant met with an accident and in this regard he had lodged a police complaint, but the Court below did not consider the document and arrived at an erroneous finding. The Trial Court could not have decided the complaint at hand by referring to the subsequent false complaint filed against the complainant. Hence, the finding of the Trial Court that the complainant was not having capacity to lend the money is erroneous. The Trial Court fails to take note of the date of transaction.
It is the specific contention of the complainant that in his absence recently the father of the accused had filed a case against him for dishonour of cheque that he had received summons about 2 to 3 months prior to deposition of his evidence. He had filed a complaint in Chikkaballapura Rural Police Station as to the loss of cheque books. In that regard, the complaint in C.C.No.562/2011 is pending for consideration. When the two cheque books could not be traced, immediately he closed the account. The averments made in the complaint filed by the father of the accused is that in the month of January 2009 he gave the complainant a sum of Rs.5 lakhs as loan. It is strange that when the complaint is pending against his son, the accused in an earlier transaction, the father of the accused gave loan to the complainant. Thus, it is not the normal human conduct to owe a debt and subsequently give loan to the same person. It is strange that the father would give loan of Rs.5 lakhs to the complainant and the same has not been considered by the Trial Court. The Trial Court erred in holding that PCR No.74/2011 was filed by N.Ramesh in respect of an alleged transaction dated 12.12.2010, wherein the complainant is said to have borrowed Rs.2,80,000/- from N.Ramesh. It is the evidence of the complainant that the said Ramesh is a stranger to him and he has not borrowed any money from him. The Trial Court without taking into consideration all these materials committed an error in acquitting the accused. Hence, it requires interference of this Court.
Having heard the learned counsel for the appellants and having perused the material available on record, the points that arise for the consideration of this Court are:
(i) Whether the Trial Court committed an error in dismissing the complaint and whether it requires interference of this Court by exercising the appellate jurisdiction?
(ii) What order?
Point No.(i):
Having heard the learned counsel for the appellants and on perusal of the complaint, it is specifically mentioned in the complaint that both the complainant and the accused are known to each other and the accused had approached him in the month of May 2007 and requested to lend Rs.2 lakhs for his immediate financial necessities and hence the complainant made the payment and though the accused assured to repay the same within a period of six months, he did not repay the amount and on demand, he issued the subject mater of the cheque. It is not in dispute that the cheque which was presented was dishonoured with an endorsement “funds insufficient”. The accused did not dispute the said cheque and he admits the cheque as well as his signature. It is important to note that when the notice was given in terms or Ex.P.3, it is categorically stated that for immediate financial necessities he had borrowed the loan and given the cheque. But reply was given in terms of Ex.P.4 denying all the averments and the accused took the defence that he came to know the cheque referred in the notice is lost by the accused and the same was misused by filling unlawful amount and he has not obtained any loan from the complainant. When such defence was taken, nothing is suggested in the cross-examination of P.W.1 regarding he lost the cheque and the same was misused and only suggestion was made with regard to entering into an agreement and P.W.1 admits that he had seen the said agreement and the accused had told him that immediately after selling the property he is going to clear the loan.
It is the evidence of P.W.1 that the cheque was given in the house of the accused in the presence of his family members. It is important to note that he categorically says that the accused put the cheque date in the month of March 2008 when he demanded after six months. He admits that before 15.03.2008 between him and accused no document of money transaction came into existence. It is his case that the accused had availed loan and cheque was given subsequently on demand. No doubt, in the cross-examination of P.W.1, a suggestion was made that a case is filed against the complainant by the father of the accused and he admits the same. But he says that earlier he lost two cheques when he met with an accident and complaint was filed in 2010 and Ex.D.1 was confronted for having filed the complaint against him i.e., PCR 29/2010. The document of Ex.D2 is also confronted that case was filed by one R.N.Bachchappa against the complainant, wherein bail application was filed and marked as Ex.D3 and also document Exs.D5 and 6 reply notice was given.
This Court has to look into the evidence of D.W.1, wherein there is categorical denial of transaction between the complainant and the accused. In the cross-examination he admits the issuance of cheque and signature and also he came to know that when the cheque was presented, the same was dishonoured within an endorsement “insufficient funds”. It is important to note that in the cross-examination he says that he cannot say what has been mentioned in the notice and also in the reply notice given by his counsel. He categorically admits that when the transaction was taken place between him and the complainant, the complainant met with an accident. When a suggestion was made that the complainant lost some cheques and in that regard he gave the complaint, he says that he is not aware of the same. He admits that the documents which he marked are given by his father. When a suggestion was made that Ex.D1 case was filed on 25.02.2010, he denies the same. But the fact that it was filed in 2010 is evident from the records i.e., subsequent to the filing of this case. It is important to note that when the accused took the defence that he lost the cheque, nothing is stated as to when he lost the cheque and where he lost. Only total denial that he has not availed the loan. Even in the chief examination also he has not stated when he lost the cheque and when the accused admits the cheque as well as his signature, he ought to have placed the material on record regarding probable defence, but no such probable defence has been raised except in the reply stated that he lost the cheque and nowhere he has stated where he lost the cheque and misusing of the said cheque.
The Trial Court got carried away with the documents which have been marked by the accused i.e., Ex.D1 and Ex.D1 is subsequent to the filing of the case against the accused and the said complaint is filed in 2010. The fact that the complainant met with an accident is admitted, but denied that the complainant lost the cheque. When the complainant placed on record the cheque as well as cheque is admitted and signature belongs to the accused, the accused ought to have placed on record the material raising probable defence and no such probable defence is raised except total denial and how the document of Ex.P.1 gone to the hands of the complainant, nothing is stated. With regard to he lost the cheque also, no complaint was given and hence the question of misuse of cheque does not arise. Mere filing of the complaint by other persons against the complainant cannot be a ground to acquit the accused and nothing is placed on record to show that the complainant has been convicted for the offence under Section 138 of the NI Act either in PCR No.74/2011 or in PCR filed by the father of the accused in PCR No.29/2010. The Trial Court committed an error in dismissing the complaint in coming to the conclusion that the documents, which have been relied upon by the accused probablise the case of the accused. The Trial Court extracted the evidence of P.W.1, but there is no admission with regard to the accused lost the cheque and no such suggestion was made except handwritings are different in the cheque, since the signature is in different ink and other handwritings are different ink and the same cannot be a ground to suspect the case of the complainant. No doubt, P.W.1 denies the filing of case against him either by Narendra or Ramesh and the same cannot be a ground to acquit the accused. P.W.1 says that when he lost two cheques books, he gave the complaint.
The other contention of the accused is that the complainant was not having any capacity to lend the amount and an observation is made that the complainant had stated that he was a teacher, but he clarified in the cross-examination that by mistake it was mentioned as teacher. He specifically stated that he was carrying on business activities. The Trial Court committed an error in holding that there is no endorsement regarding cheque was dishonoured. Having considered the document of Exs.P.1 and 2, it is very clear that on the overleaf of the cheque, it is mentioned as “insufficient funds” and also endorsement was issued and Ex.P.2 is also marked, wherein also it is specifically mentioned that it was bounced and the Trial Court committed an error in not considering the document of Exs.P.1 and 2 as contended by learned counsel for the appellant. The Trial Court mainly relies upon the documentary evidence placed on record by the defence Exs.D1 to 5 i.e., bail application Ex.D3, surety affidavit Ex.D4 and Ex.D5 copy of the notice dated 31.03.2008 addressed to R.B. Santosh Kumar by R.H.Manendra in respect of cheque bearing No.584072 dated 15.03.2008 drawn at the Post Office savings bank account for Rs.2 lakhs, which is the subject matter of the cheque in the case on hand and the said notice has been caused to the accused and also taken note of the reply notice addressed by R.B. Santosh Kumar. These documents will not come to the help of the accused and those documents reflects with regard to the filing of the case against the complainant and mere filing of those complaints cannot be a ground to come to conclusion that the complainant is not in a position to give loan to other persons. Except producing those documents, nothing is placed on record about the result of those cases. Hence, the Trial Court committed an error in relying upon ‘D’ series documents in the absence of any specific defence and placing on record the probable defence of the accused what made him to execute Ex.P.1 cheque and no such circumstance is also placed on record how Ex.P.1 gone to the hands of the complainant. Hence, the Trial Court committed an error in dismissing the complaint and failed to consider the presumption under Section 139 of the NI Act and the said presumption has not been rebutted by the accused placing on record any material before the Court by raising probable defence except stating that he lost cheque and no attempt was made or steps has been taken regarding loss of Cheque, either complaint is given or any preponderance of probabilities is placed on record to substantiate his contention that he lost cheque. Hence, the impugned order requires to be set aside. Hence, I answer the point in the affirmative.
Point No.(ii):
In view of the discussions made above, I pass the following:
ORDER
(i) The appeal is allowed.
(ii) The impugned judgment of the Trial Court dated 21.08.2013 passed in C.C.No.307/2008 is set aside.
(iii) Consequently, the complaint filed by the complainant is allowed and the respondent/accused is convicted for the offence punishable under Section 138 of the NI Act. The respondent/accused is directed to pay a sum of Rs.3,00,000/- within two months from today. If the accused fails to pay the amount within two months, he shall undergo imprisonment for a period of six months.
(iv) Out of the amount of Rs.3,00,000/-, an amount of Rs.2,90,000/- is payable to the complainant and the remaining amount of Rs.10,000/- to be defrayed to the State.