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Karnataka High Court
S.PARAMESHWARAPPA - Appellant
Versus
S.CHOODAPPA - Respondent
Decided On : 10-16-06
Criminal Revision Petition No. 765 of 2003.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Legal Fictions -Resumption arising out of a dishonoured cheque - Resumption arising out of a dishonoured cheque - Presumption under - Check - Issuance of - Repercussions flowing out of, once dishonoured - Court has to presume that check had been issued for discharging a debt or liability - Rebuttal of - Said presumption can be rebutted by accused by proving to contrary and mere denial of same in reply notice is not suficient - Settled Principle(2000(8) SCC 458).
Legal Fictions -Resumption arising out of a dishonoured cheque - Resumption arising out of a dishonoured cheque - Presumption under - Check - Issuance of - Repercussions flowing out of, once dishonoured - Court has to resume that check had been issued for discharging a debt or liability - Rebuttal of - Said presumption can be rebutted by accused by proving to contrary and mere denial of same in reply notice is not suficient - Settled Principle(2000(8) SCC 458).
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Karnataka Money Lenders Act, 1961- Dishonour of cheque - Section 5 - Dishonour of cheque - Whether complainant should necessarily have licence under the Act - In respect of money lending as a matter of obligation on part of plaintiff in a suit for recovery of money, Court would insist, as a condition precedent, to have a money lending licence - Condition precedent applies to a suit for recovery of money - But where, complainant is exercising special powers provided under Negotiable Instruments Act, 1881 for non-honour of cheque which is more in a quasi civil and criminal in nature.
. Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Indian Contract Act, 1872- Time barred debt - Section 25 - Time barred debt - When such an agreement or terms are there despite amount said to be time barred, then debt becomes enforceable.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Indian Contract Act, 1872- Time barred debt - Section 25 - Time barred debt - When such an agreement or terms are there despite amount said to be time barred, then debt becomes enforceable.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Indian Contract Act, 1872- Time barred debt - Section 25 - Time barred debt - When such an agreement or terms are there despite amount said to be time barred, then debt becomes enforceable.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Presumption under - Section 118 - Presumption under - Check - Issuance of - Repercussions flowing out of, once dishonoured - Court has to resume that check had been issued for discharging a debt or liability - Rebuttal of - Said presumption can be rebutted by accused by proving to contrary and mere denial of same in reply notice is not suficient - Settled Principle(2000(8) SCC 458).
Negotiable Instruments Act, 1881- Presumption under - Section 118 - Presumption under - Check - Issuance of - Repercussions flowing out of, once dishonoured - Court has to resume that check had been issued for discharging a debt or liability - Rebuttal of - Said presumption can be rebutted by accused by proving to contrary and mere denial of same in reply notice is not suficient - Settled Principle(2000(8) SCC 458).
Negotiable Instruments Act, 1881- Presumption under - Section 118 - Presumption under - Check - Issuance of - Repercussions flowing out of, once dishonoured - Court has to presume that check had been issued for discharging a debt or liability - Rebuttal of - Said presumption can be rebutted by accused by proving the contrary and mere denial of same in reply notice is not suficient - Settled Principle (2000(8) SCC 458).
Negotiable Instruments Act, 1881- Offence by company - Section 141 - Offence by company - Persons responsible for affairs of company - Pleading has to. [Huluvadi G. Ramesh, J]: Of course it is the arguement of the counsel for the petitioners that 1st petitioner was only a nominal and honorary Chairman of the accused company and that he is in no way concerned with the conduct of business of the company and similarly, in respect of 2nd petitioner, she was only a Director and in no way responsible for the conducting of the business of the company. It is to be noted, looking into some of the documents produced viz., the proceedings are said to have signed the resolution passed by the company, as is rightly observed by the trial court and the appellate court, the same negates the contention of the petitioners that they were not responsible for the day affairs of the accused company. An overall reading of the complaint depicts there is a pleading to the effect of petitioners being responsible for the conduct of the business of the company.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Defence of accused - Section 141 - Defence of accused - Once cheque is issued accussed cannot contend that it is not in respect of legally enforceable debt or else proper procedure has not been followed according to provisions of Act - Only if cheque is presented after its validity period, then only such contentions would arise.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Defence of accused - Section 141 - Defence of accused - Once cheque is issued, accussed cannot contend that it is not in respect of legally enforceable debt or proper procedure has not been followed according to provisions of Act - Only if cheque is presented after its validity period, then such contentions would arise.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Defence of accused - Section 138 - Defence of accused - Once cheque is issued accussed cannot contend that it is not in respect of legally enforceable debt or else proper procedure has not been followed according to provisions of Act - Only if cheque is presented after its validity period, then only such contentions would arise.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Defence of accused - Section 138 - Defence of accused - Once cheque is issued accussed cannot contend that it is not in respect of legally enforceable debt or proper procedure has not been followed according to provisions of Act - Only if cheque is presented after its validity period, then only such contentions would arise.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Complaint for dishonour of cheque - Section 138 - Complaint for dishonour of cheque - Whether complainant should necessarily have licence under Act - In respect of money lending as a matter of obligation on part of plaintiff in a suit for recovery of money, would insist, as a condition precedent, to have a money lending licence - Condition precedent applies to a suit for recovery of money - But where, complainant is exercising special powers provided under Negotiable Instruments Act, 1881 for non-honour of cheque which is more in a quasi civil and criminal in nature.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Complaint for dishonour of cheque - Section 138 - Complaint for dishonour of cheque - Whether complainant should necessarily have licence under Money Lender s Act - In respect of money lending as a matter of obligation on part of plaintiff in a suit for recovery of money, Court would insist, as a condition precedent, to have a money lending licence - Condition precedent applies to a suit for recovery of money - But where, complainant is exercising special powers provided under Negotiable Instruments Act, 1881 for dishnour of cheque which is more in a quasi civil and criminal in nature.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Dishonour of Cheque- Issuance of cheque - Issuance of cheque - Presumption of arising out of when dishonoured. See, Negotiable Instruments Act, 1881- Section 138.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Dishonour of Cheque- Issuance of cheque - Issuance of cheque - Presumption arising out of when dishonoured. See, Negotiable Instruments Act, 1881- Section 138.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Presumption under - Section 118 - Presumption under - Cheque - Issuance of - Repercussions flowing out of, once dishonoured - Court has to presume that cheque had been issued for discharging a debt or liability - Rebuttal of - Said presumption can be rebutted by accused by proving the contrary and mere denial of same in reply notice is not suficient - Settled Principle(2000(8) SCC 458).
Negotiable Instruments Act, 1881- Offence by company - Section 141 - Offence by company - Persons responsible for affairs of company - Pleading as to. [Huluvadi G. Ramesh, J]: Of course it is the arguement of the counsel for the petitioners that 1st petitioner was only a nominal and honorary Chairman of the accused company and that he is in no way concerned with the conduct of business of the company and similarly, in respect of 2nd petitioner, she was only a Director and in no way responsible for the conducting of the business of the company. It is to be noted, looking into some of the documents produced viz., the proceedings are said to have signed the resolution passed by the company, as is rightly observed by the trial Court and the appellate Court, the same negates the contention of the petitioners that they were not responsible for the day affairs of the accused company. An overall reading of the complaint depicts there is a pleading to the effect of petitioners being responsible for the conduct of the business of the company.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Defence of accused - Section 141 - Defence of accused - Once cheque is issued, accussed cannot contend that it is not in respect of legally enforceable debt or proper procedure has not been followed according to provisions of Act - Only if cheque is presented after its validity period, then such contentions would arise.
Negotiable Instruments Act, 1881- Defence of accused - Section 138 - Defence of accused - Once cheque is issued accussed cannot contend that it is not in respect of legally enforceable debt or proper procedure has not been followed according to provisions of Act - Only if cheque is presented after its validity period, then only such contentions would arise.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Negotiable Instruments Act, 1881- Complaint for dishonour of cheque - Section 138 - Complaint for dishonour of cheque - Whether complainant should necessarily have licence under Money Lender s Act - In respect of money lending as a matter of obligation on part of plaintiff in a suit for recovery of money, Court would insist, as a condition precedent, to have a money lending licence - Condition precedent applies to a suit for recovery of money - But where, complainant is exercising special powers provided under Negotiable Instruments Act, 1881 for dishnour of cheque which is more in a quasi civil and criminal in nature.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Karnataka Money Lenders Act, 1961- Dishonour of cheque - Section 5 - Dishonour of cheque - Whether complainant should necessarily have licence under the Act - In respect of money lending as a matter of obligation on part of plaintiff in a suit for recovery of money, Court would insist, as a condition precedent, to have a money lending licence - Condition precedent applies to a suit for recovery of money - But where, complainant is exercising special powers provided under Negotiable Instruments Act, 1881 for non-honour of cheque which is more in a quasi civil and criminal in nature.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Dishonour of Cheque- Issuance of cheque - Issuance of cheque - Presumption arising out of when dishonoured. See, Negotiable Instruments Act, 1881- Section 138.
Cases Referred : 2004 Crl.L.J 4436; 2004 Crl.L.J 4107; 2001 (1) KCCR 437; AIR 1999 SC 1008; 2000 (5) KLJ 166; Crl.A 950 & 951/2006; 2000 (8) SCC 458; 2001 (3) DCR 173; (1981) 3 SCC 71; 2004 (7) SCC 659; 2004 (1) DCR 91; 2005 (1) DCR 203; AIR 2001 SC 3897; AIR 2001 SC 2895; 2002 (1) Crimes 306.
Legal Fictions -Resumption arising out of a dishonoured cheque - Resumption arising out of a dishonoured cheque - Presumption under - Check - Issuance of - Repercussions flowing out of, once dishonoured - Court has to presume that check had been issued for discharging a debt or liability - Rebuttal of - Said presumption can be rebutted by accused by proving to contrary and mere denial of same in reply notice is not suficient - Settled Principle(2000(8) SCC 458).
This revision is against the order of dismissal of the criminal appeal filed by the petitioners in No. 65/03 by the IX Additional Sessions Judge, Bangalore City by order dated 28-6-2003.
2. A complaint was filed by the respondent before the XV Additional CMM, Bangalore under Section 138 of the Negotiable Instruments Act, 1881, which was registered in CC No. 20134 of 1999. These petitioners are arrayed as accused 2 and 7. Accused 1 is the company by name Saroj Mining Limited, Bangalore. The 1st petitioner is the Chairman and the 2nd petitioner is the Director and it is alleged that accused have borrowed loan from the complainant in a sum of Rs. 18.5 lakhs. There was also a resolution passed by the accused to clear the amount due to the complainant. The 3rd accused being the Managing Director of the accused-company, on the basis of the resolution, had issued a cheque for Rs. 20 lakhs in favour of the complainant. On presentation, the said cheque came to be dishonoured for 'insufficient funds'. After causing a legal notice demanding to pay the cheque amount, a complaint was filed for non-compliance. Thereafter, learned Magistrate who held the enquiry, convicted accused 1, 2 and 7 for the offence under Section 138 of the Negotiable Instruments Act and sentenced them to pay fine of Rs. 34,65,000/- and in default, it was ordered that accused 2 and 7 to undergo simple imprisonment for a period of three months. Out of the fine amount, an amount of Rs. 34,40,000/ was ordered to be paid as compensation to the complainant.
3. Being aggrieved by the said order, petitioners preferred appeal before the IX Additional Sessions Judge, Bangalore, who, in turn, while confirming the order of the Trial Court, dismissed the appeal. Hence, this revision by the accused petitioners.
4. Heard the Counsel for the respective parties.
5. It is the argument of the petitioners' Counsel that both the Courts below have committed an error in convicting the accused although there is no legal evidence and no legally enforceable debt is to be discharged. Further, it is submitted that these petitioners though were arrayed as Chairman and one of the Directors of the accused 1-company, they were not responsible for the day-to-day affairs and conduct of the business of the company: Even according to the complainant, the amount was paid to the 1st petitioner but, the complaint has been filed against the company which is contrary to the facts. The complainant failed to produce the statement of accounts to prove the amount due and also to prove that the complainant had sufficient funds and capacity to pay the said amount. The name of the complainant is not found in the creditors list of the company as such, the 1st accused or the petitioners are not responsible despite which both the Courts below have held the accused guilty and the said order requires interference.
6. It is argued further that no corroborating evidence is available to show that Rs. 18 lakhs was paid to the 2nd accused and since the two Directors were available at Bangalore, complainant filed a complaint against them and it was for the complainant to prove the payment of the legally enforceable debt. It is argued that if the circumstances are suspicious, the presumption under Sections 20 and 1180fthe Negotiable Instruments Act gets rebutted. Further, it is submitted that as per Section 5 of the Karnataka Money Lenders Act, 1961, unless there is a licence, it cannot become a legally recoverable debt as the complainant is a money lender and that a time barred debt cannot be recovered as the amount is advanced during 1994. The petitioner has not signed any of the documents though he was the Chairman and accordingly submitted that the petitioner is not responsible for any of the transactions and, referring to some of the admissions made by the complainant regarding collecting of interest on the amount that would be advanced, it was contended that it is a clear case of money lending and in the absence
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