IN THE HIGH COURT OF KARNATAKA,
CIRCUIT BENCH AT GULBARGA
DATED THIS THE 11TH DAY OF FEBRUARY, 2013 BEFORE
THE HON'BLE MR.JUSTICE ANAND BYRAREDDY
CRIMINAL APPEAL NO.1671 OF 2007
W/o. Rajak Umarani,
Aged about 45 years,
Resident of Athani Galli, Sakaf Roza,
Taluk and District: Bijapur. ... APPELLANT. (By Shri R.S. Lagali, Advocate)
S/o. Rajaksab Shaikh,
Aged about 38 years,
Resident of Tippusultan Chowk,
Near State Bank Main Branch,
Taluk and District: Bijapur. ... RESPONDENT. (By Shri Ameet Kumar Deshpande, Advocate) 2
This Criminal Appeal is filed under Section 378(4) of the Crl.P.C. praying to call for records of the court below and set aside the judgment and order dated 6.10.2007 passed by the JMFC-II Court, Bijapur in C.C.No.222/2005 and convict the respondent.
This appeal coming on for hearing, this day, the Court delivered the following:
Heard the learned counsel for the appellant and the learned counsel for the respondent.
2. The appellant was the complainant before the Trial Court, who had alleged an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the NI Act' for brevity).
The complaint having been contested, was dismissed. Hence the present appeal is filed.
3. It is the case of the appellant that the appellant and the respondent were good friends. Since the respondent was in need of money, he had raised a hand loan of Rs.2,00,000/- from the appellant, which was lent under two installments dated 3
25.06.2003 and 26.10.2003. The same was to be repaid on or before 1.10.2004. The same not having been paid on or before that date, a demand was made and therefore, the respondent had executed an agreement, whereby he had furnished his house as security for repayment of the loan amount and had granted permission to the appellant to take action towards recovery of the hand loan, in case the accused failed to repay the sum. Since there was default in repayment and on a demand being made, the respondent is said to have issued a cheque bearing No.956504 for a sum of Rs.2,00,000/- drawn on Syndicate Bank, Bijapur. When the same was presented for payment on 8.12.2004, it was returned with an endorsement that the drawer's signature differed from his specimen filed with the Bank and further, that there was insufficient funds in the account of the respondent. It is in that background that a notice of dishonour was issued to the respondent, calling upon him to pay the amount within 30 days. As there was failure to comply with the demand, the complaint was lodged. Cognizance of the offence was taken and after 4
recording the sworn statement of the complainant, summons was issued to the respondent. The respondent appeared through counsel and contested the matter. The complainant having tendered evidence by way of an affidavit and having marked documents at Exhibits P1 to P6 and having recorded the statement of the respondent, the respondent having tendered evidence and also having examined another witness in his favour, had got marked Exhibit D1. The court below, after having heard both sides, framed the following points for consideration:
"1. Whether the complainant proves that, accused has issued a cheque under Ex.P.1?
2. Whether the complainant proves that,
accused had issued a cheque under Ex.P.1 towards discharge of his lawful liability in respect of hand loan availed by him from the complainant?
3. Whether the complainant proves that,
accused had issued a cheque at Ex.P.1 without 5
maintaining sufficient balance in his account and thereby committed the alleged offence?
4. What order?"
The trial court has held all the points in the negative and has dismissed the complaint. It is that which is under challenge in the present appeal.
4. The learned counsel for the appellant would submit that the court below has failed to appreciate the evidence of PW-1, though the respondent has admitted the cheque. It is only the claim that the signature on the cheque is not his and therefore, the court below having accepted that contention, would deny the case of the appellant. The learned counsel would submit that it is in the face of the admission that the cheque was issued in respect of the account held by the respondent. The presumption under Section 139 of the NI Act would be in favour of the appellant and the respondent not having rebutted the same, merely contending that since the Bank had endorsed that the 6
signature was not that of the respondent, it was for the appellant to establish that the signature was indeed that of the respondent and the court below also having accepted such an argument, leads to a misinterpretation of the law and to the disadvantage of the appellant. The court below also having carried out an exercise of comparing the signature on the cheque with the signature on the vakalatnama on the claim of the respondent and having held in favour of the respondent, overlooks the obvious ruse of the respondent in possibly affixing a signature which was in variance with his actual signature, and leading to the circumstance, which apparently was the intention of the respondent. The cheque itself not having been denied, it cannot be accepted that the same had been obtained by the appellant illegally and was sought to be misused against the respondent in the absence of any material evidence in this regard. This is the primary contention on which the appeal rests.
5. On the other hand, the learned counsel for the respondent would point out that it was the case of the respondent 7
that Exhibit P1, the cheque said to have been issued by the respondent, was a fabricated document and that he would further contend that as rightly held by the court below, the Bank had endorsed that the drawer's signature differs from the specimen found in its record, the burden was upon the complainant to prove that the accused had intentionally changed his signature while issuing the cheque. This initial burden not having been discharged by the appellant through scientific examination of the disputed signature, the complainant had miserably failed to establish his case and hence, the court below was justified in holding that the case was not proved by the complainant. The further case of the respondent was that, there was a partnership business between the appellant and the respondent. However, on account of difference, the partnership was dissolved. Upon such dissolution, the cheque book which the respondent possessed, was left behind and it is that cheque which is sought to be misused by the appellant, and the case of the appellant that the respondent had procured a hand loan and by ambiguously 8
stating that it was also for the purpose of business, the complainant is not certain that the money was borrowed for any particular purpose. It is also contended that as rightly held by the court below, the appellant had also failed to establish that there was existence of liability as on the date the cheque was issued. Hence, on more than one count, the appellant had failed to establish his case of an offence punishable under Section 138 of the NI Act, having been committed by the respondent, and the court below, on a close consideration of the facts and the case law on the point, having held against the appellant, cannot be said to be at fault, and seeks the dismissal of the appeal.
6. In the facts and circumstances, as rightly contended by the learned counsel for the appellant, the cheque having been drawn on the account of the respondent, is not in dispute. However, it is the defence set up that there was a business relationship between the appellant and the respondent, and it was possible for the appellant to have accessed a cheque leaf 9
belonging to the respondent, which is sought to be misused. In this regard, there is no positive evidence put forward by the respondent. In other words, in terms of Section 139, the presumption is in favour of the holder of the cheque of the same having been issued by the account holder in discharge of a legal liability. It is for the person issuing the cheque to prove otherwise. This, the Apex Court has held in the case of Rangappa vs. Mohan (AIR 2010 SC 1898). That, not only is it possible for the accused to establish this by leading positive evidence, he could also place reliance on the evidence tendered by the complainant himself to discharge that burden. Hence, if it was the contention of the respondent that there were cheque leaves misplaced by him and which were sought to be misused by the appellant, it was for the respondent to have tendered evidence of the approximate date when there was a dissolution of the partnership business between the appellant and the respondent, and the respondent having operated his Bank Account thereafter using other cheque leaves and that the cheque 10
leaves which were left behind upon such dissolution having fallen into disuse over a period of time, sought to be forged and fabricated at a later date by the appellant, was clearly on the respondent. There is no such evidence forthcoming except the self-serving evidence of the respondent. Further, in the event that any such cheque leaves were misused, a duty was cast on the respondent to inform his banker to stop payment, against such cheques which were lost or misplaced. There is no such evidence forthcoming. Nor is it the case of the respondent that the cheques being misplaced, he had reported to the nearest Police Station of such loss. There was no demand made on the appellant to return such cheque leaves left behind. Therefore, the evidence of the respondent was clearly self-serving and it was a burden cast on the respondent to establish the fact that there were cheque leaves which were left behind and it was possible for the appellant to misuse the same. If once it is apparent that the cheque had been issued on the account held by the respondent, the presumption under Section 139 is clearly in 11
favour of the appellant to establish that it was forged by the accused. The burden is clearly on the respondent and it not for the appellant to establish that the respondent had deliberately changed his signature in order that it would be dishonoured by his Bank. This may indeed have been the intention in changing his signature at the time of issuing of the cheque. As already stated, the burden to establish that it was lost and it has been misused by the appellant, was clearly on the respondent. The court below has also committed an error in holding that the liability in respect of which the cheque had been issued was required to be proved by the appellant. The proceedings were not in the nature of a suit for recovery of money, but for prosecution of an offence punishable under Section 138 of the NI Act. The limited scope of those proceedings is whether, there was dishonour of cheque issued by the accused. That aspect of the mater has been established on the face of it. Therefore, the court below has clearly committed an error in addressing the case of the complainant and in dismissing the 12
complaint. Consequently, the appeal is allowed. The complainant has established his case beyond all reasonable doubt. The respondent therefore is liable for punishment. Accordingly, he shall pay a fine of Rs.3,50,000/- in default of which, the respondent shall suffer simple imprisonment for a period of six months. The fine amount shall be paid forthwith, in any event, within a period of 15 days. Out of the fine amount, a sum of Rs.3,40,000/- shall be paid as compensation to the appellant.