Sri. D. Bhaskaran vs Sri. N.V. Murthy

Subhash Badi

This appeal is by the complainant against the judgment of acquittal dated 20.07.2006 in C.C. No. 13673/2003 on the file of XIX Additional Chief Metropolitan Magistrate. Bangalore City.

The case of the complainant was that, the accused had borrowed a sum of Rs. 3,00,000/- for purchase of Tata Sumo Vehicle. In this regard, he had issued a cheque bearing No. 5026 dated 12.06/2003 for a sum of Rs. 300,000/- drawn on Ashoknagar Co-operative Bank Limited, BSK I Stage, Bangalore, When the said cheque was presented fey encashment to the bank, the bank returned the cheque with an endorsement "Insufficient. Funds". In this regard, the complainant had issued a legal notice calling upon the accused to repay the amount mentioned in the cheque. However, the accused in his reply, denied of the liability to the tune of RS. 3,00,000/- but admitted that he had borrowed only Rs. 40,000/- and the said sum of Rs. 40,000/- along with interest to the funs of Rs. 20,000/-, in all Rs. 60.000/- has been paid and further stated that, at the time of borrowing, the complainant had taken blank signed cheque and also blank Promissory Note and the same has been misused. Since the accused did not make any payment in pursuance of the legal notice issued by the complainant, the complainant filed a private complainant u/s 200 Cr.P.C.

On service of summons, the accused appeared before the trial Court and pleaded, not guilty, The complainant to support his case he got himself examined as PW1 and produced Exs. P1 to P11. Accused get himself examined as DW1, he examined his wife Smt. M. Andal as DW2 and one witness G. Kumar as DW3, stated to be the person who introduced the accused to the complainant and also produced Exs. D1 to D7.

The trial Court, on appreciation of the evidence, held that the complainant has not proved the transaction and has also not proved that the debt is legally recoverable and accordingly, it acquitted the accused. As against the said judgment of acquittal, the complainant is in appeal.

Heard Sri S.P. Kulkarni, learned counsel for the appellant and Sri Lingaraju learned counsel appearing for the accused.

Ex. P3- is a Cheque drawn on Ashoknagar Co-operative Bank Limited, BSK I Stage, Bangalore. The cheque is for a sum of Rs. 3,00,000/- and it is dated 12.06.2003. Ex. P4 is an Endorsement of the said bank showing referred to drawee on the ground of "Insufficient Fund". Ex. P5 is a Legal Notice issued by the com Ex. P6 is a Postal Acknowledgement. Ex. P8 is a reply given by the accused.

From these documents, it proves that the cheque belongs to the accused and it was presented by the complainant and the bank has returned the said cheque with an endorsement "Insufficient Funds". The complainant has also issued notice, which has been acknowledged by the accused and the accused has replied to the same.

This evidence proves that the cheque issued by the accused has been returned by the bank as dishonoured for want of sufficient fund. Though notice issued by complainant is acknowledged by the accused, but the accused has denied his liability.

However, the complainant is required to prove that the cheque was Issued towards the legally recoverable debt. To prove the same, complainant in his evidence has stated that the accused had borrowed Rs. 3,00,000/- to purchase a car and in discharge of his liability he had issued cheque and has also executed. ''On Demand Promissory Note'' dated 21.04.2001, produced at Ex. P1. He had also executed agreement-Ex. P2 wherein the accused had agreed to pay Rs. 3,00,000/- and Rs. 6,000/- as interest per month, Exs, P1 and P2 supports the claim of the complainant that the accused had borrowed money on 21.04.2001 and issued a cheque and has also executed ''On Demand Promissory Note.

Now, the defence of the accused to the contrary is that the wife of the accused had-filed a suit for mandatory injunction against the seizure of the vehicle and the Civil Court had passed an order on 20.04.2001 directing the accused to deposit sum of Rs. 40,000/- and the accused was in need of the said amount, and as such, he had approached the complainant and the complainant had paid sum of Rs,40,000/- by way of loan. The accused has paid the said amount along with Rs. 20,000/- interest. However, the accused in his evidence, claims that he was in need, of Rs. 40,000/- to deposit in Civil Court on 21.04.2001. Accused further admits that he borrowed Rs. 40,000/- on 21.04.2001 and deposited the said amount on 21.04.2001 before the Court. He reiterates that he had borrowed money from the complainant and he had executed ''On Demand Promissory Note'' and also an agreement. His wife is examined as DW2. She also admits that accused had borrowed a sum of Rs. 40,000/-, for which, two blank cheques were given and states that Rs. 60,000/- amount has been paid, Another witness has been examined as DW3 who states that the accused had borrowed only RS. 40,000/- and he states that he has introduced the accused to the complainant.

The accused himself has produced order sheet of the Civil Court where he was required to deposit the amount, at Ex. D1. The said document is produced to corroborate his evidence, that he warn only in need of sum of Rs. 40,000/- It is pertinent to note that the accused had admittedly borrowed money on 21.04.2001 and according to the accused he deposited the said amount on. 21.04.2001 before the Court. If the accused had borrowed the said amount to deposit before the Court, then the deposit could have been made either on 21.04.2001 or on the subsequent date. But Ex. D1-order sheet produced by the accused shows that the accused under the receipt Ho. 4200 had deposited sum of Rs. 40.886/- under Challan No. 127809 on 20,04.2001. The order sheet of the Court also shows that the accused was to deposit the amount of Rs. 40,885.78/- and is deposited on 20.04.2001.

It is not a case of the complainant or the accused that the money was paid prior to 21.04.2001. The case of the accused was that, he had borrowed a sum of Rs. 40,000/- on 21.04.2001, it does not probabalise that he was to deposit the said amount before the Civil Court. As per Ex. D1, it shows, that the said amount was deposited prior to 21.04.2001. The evidence of the accused does prow that he had borrowed Rs. 40,000/- to deposit before the Civil Court There is no other evidence led by the accused to show that he had borrowed only Rs. 40,000/-.

It is not a case of the accused that he had not borrowed money nor issued any cheque. He admits that he had issued a cheque, ho has also signed the cheque. Not only he has signed the cheque but has also executed ''On Demand Promissory Note'' and agreement agreeing to pay the interest. To show that, as against the borrowing be had made payment nothing has been produced before the Court except oral testimony of accused and his wife and one witness.

No doubt, the accused need not prove his case beyond reasonable doubt, but the evidence produced by the accused must probabalise that there was no legally recoverable debt. Even if the existence of the debt creates the doubt, it is sufficient.

However, in this case the accused has not disputed the loan transaction. He admits that he had borrowed only sum of Rs. 40,000/-. To substantiate that he had borrowed only Rs. 40,000/- no material, is produced. The cheque showa that an amount of Rs. 3,00,000/-. It is not only the cheque but ''On Demand. Promissory Note'' has been executed for Rs. 300,000/- and further an agreement has also been executed by the accused admitting the loan of Rs. 3,00,000/-. The defence of the accused that be had borrowed Rs. 40,000/- for the purpose of deposit before the Civil Court is not probabalised by any material. Without there being any evidence which probabalises that the accused has only borrowed Rs. 40,000/- and the complainant apart from the cheque, he has also produced the ''On Demand Promissory Note'' and the agreement and the signature on the same is not disputed and these documents support the case of the complainant.

The case of the accused is that his signature is obtained on blank ''''On Demand Promissory Rote" and the agreement is not established. When the accused has admitted the signature on these document, presumption arises in favor of the complainant There is no rebuttable evidence by the accused to prove to the contrary. The Apex Court in a judgment reported in Rangappa Vs. Sri Mohan, at paragraphs-14 and 15 has observed as under:

In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not he correct However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favors the complainant. Section 139 of the Act is an example of a reverse onus douse that has been included in furtherance of the legislative abjective of improving the credibility of negotiable instruments. White Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption u/s 139 is a device to prevent undue delay in the course of litigation. However, it must he remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the lest of proportionality should guide the construction and interpretation of reverse onus clouses and the accused/defendant cannot be expected to discharge an unduly nigh standard or proof. In the absence of compelling justifications, reverse anus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption tinder Section 139, the standard of proof for doing so is that of ''preponderance of probabilities'', Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can foil As clarified in the citations, the accused can rely on the material s submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her awn

Coming back to the facts in the present case, we are in agreement with the High Courts view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the ''stop payment'' instruction to his bank. Further more, the instructions to ''stop payment'' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice u/s 133 of the Act leads to the inference that there was merit in the complainants version. Apart, from not raising a probable defence., the appellant-accused was not able to contest the existence of a legally enforceable debt or Mobility. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant''s version, in so for as it was not dear whether the accused had asked for a hand loan to-meet the construction-related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaints discloses the prima facie existence of a legatty enforceable debt or liability since the complainant has maintained that Ms money was used for the construction expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant.

u/s 139 initial presumption of legal debt is in favor of the complainant and is supported by documentary evidence Ex. P1-Promissory Note and P2-Agreement. The complainant has proved that the accused had borrowed sum of Rs. 3,00,000/- and has issued cheque in discharge of the said liability and has also executed the ''On Demand Promissory Note'' and the agreement produced at Exs. P1 and P2. The evidence also proves that the accused even on demand has not paid, The evidence of the complainant proves the offence punishable u/s 138 of negotiable Instruments Act.

The complainant having established the debt and also having established that it become legally recoverable, the trial Court ignoring the material evidence on record has erred in acquitting the accused.

In my opinion, the judgment of acquittal stiffens from non-consideration of the material evidence on record and findings of the trial Court are perverse, as such, the appeal deserves to be allowed. Hence, I pass the following order:

ORDER

i) Accordingly, the appeal is allowed

ii) Judgment in C.C. No. 13673/2003 on the file of XXX Additional Chief Metropolitan Magistrate, Bangalore City is set aside.

iii). Accused is convicted for the offence punishable u/s 138 of N.I. Act with fine of Rs. 4.00,000/- out of which, the complainant shall withdraw Rs. 3/75,000/- and Rs. 25,000/ be appropriate towards fine in State Account In default of payment of fine, the accused shall undergo six months Simple Imprisonment.

ORDER ON BEING SPOKEN TO

Sri. A.V. Amarnathan, learned counsel for the respondent continued his submission today.

On 02.12.2011, this matter was listed for ''Being Spoken To'' at the instance of learned counsel for the respondent, on that day he had submitted that there was no fair bearing as the learned counsel on record had not appeared and his junior had appeared, and had made submission on merit interalia stating that, in the notice issued by the complainant, the complainant has alleged that the respondent had borrowed a sum of Rs. 3,00,000/-, for which he had issued a cheque dated 12.06.2003 and further has stated that six months time was stipulated for repayment However, the said six months had expired in 2001, only, but the notice was issued on 23.06.2003 i.e., much after the expiry of six months time and for the said notice in the reply, the respondent had taken a contention that he had borrowed only Rs. 40,000/-, as against Rs. 40,000/- he had paid Rs. 60,000/- inclusive of interest and submitted that the respondent had never borrowed Rs. 3,00,000/-.

To support his contentions he further relied on Ex. D1-the order sheet in O.S. No. 2576/2001 filed by Smt. Andal M. wife of the respondent against the Standard Chartered Grindleys and in the said suit she had sought for mandatory injunction and the Civil Court granted mandatory injunction subject to deposit of Rs. 40,885,78/-. The accused had approached the complainant for the said money and accordingly, he had borrowed money from the complainant to the tune of Rs. 40,000/- on 21.04.2001, He further relied on the Promissory Note alleged to have been executed by the respondent and submitted that the Promissory Note is altered as PW1-complainant in his evidence has admitted that he does not know who has written the Promissory Note. Hence, it amounts to alteration of Promissory Note. Even the name of the attestor or the witness has not been mentioned on the promissory note. He submitted that signature was obtained on a blank stamp paper, as such these documents are of no help to the complainant as they are inadmissible and further the stamp paper is purchased on 23.3.2001/30.3.2001.

He further submitted that the accused in support of his case, his wife Smt. Andal M has been examined as DW2 and also one witness Kumar has been examined as DW3. DW2 in her evidence has stated that two blank cheques were taken by the complainant and complainant has misused the same.

Today, he further submitted that in criminal case the judgment of conviction cannot be passed in the absence of the accused/his counsel, in this regard he relied on the judgment reported in 2011 AIR SCW 1352 in the matter of Md. Sukur all v. State of Assam He also submitted that, in the notice, the complainant states that the loan was obtained for purchase of car, but the car was purchased in the year 1998 in the name of the wife of the accused and for which there was a recovery proceedings. Accused has not purchased any car by borrowing money form the complainant, nor has borrowed any amount more than Rs. 40,000/- which is also paid. The complainant''s case is utterly false and not supported by any evidence. He also submitted that the complainant has admitted in his evidence that he has lent loan to others also and has also filed cases against the others as such the complainant is a money lender and same is done without licence, as such the debt is not legally recoverable debt.

This Court had disposed off this matter by order dated 01.12.2011 and at the time of hearing, his junior colleague was present and was heard. After the disposal of the case, a submission was made on behalf of A.V. Amarnathan, learned counsel for the respondent that he had some inconvenience to appear before the Court when the matter was called, After the disposal of the case a request was made for calling this matter at 2.30 p.m. Accordingly, the matter was called at 2.30 p.m., at 2.30 p.m., a submission was made that the matter may be taken on the next day morning i.e., on 02.12.2011, accordingly it was posted for ''Being Spoken To on 02.12.2011. On that day though the matter was disposed of learned counsel insisted for hearing, and the matter was heard for about one hour, again after one hour, the learned counsel for the respondent submitted that matter may be taken on Monday i.e., on 05.12.2011, that is how the matter is listed today.

This appeal is by the complainant against the judgment of acquittal for the offence punishable u/s 138 of N.I. Act. While disposing of the matter, this Court, considering the Promissory Note, agreement, notice issued, admission by the respondent and by detailed judgment had disposed off the matter. The colleague of A.V. Amarnathan, learned counsel was present and was heard and even a suggestion was made as to whether any possibility of settlement. He did not respond to it, accordingly this matter was disposed off on merit It is only after the disposal, the learned Advocate on record appeared and claimed that there was no fair bearing and insisted for hearing the matter again. Though the matter was again heard, but once this Court decides the criminal case, it cannot recall or alter the same. The judgment relied by the learned counsel in Md. Snkur Ali case has no application and once the matter is decided on merit by this Court in view of the provision u/s 362 of Cr.P.C, no power is vested in Court to recall and rehear the matter again. Despite the matter was reheard all the submissions made now have been already considered. Accordingly, I find no reasons to recall the order.