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2009 Supreme(Kar) 958
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
K. Ramanna, J.
Shet and Co. rep. by its Proprietor G.R. Shet S/o. K.R.K. Shet —Appellant
Vs.
Corpopation Tiles Works, Ronald Roche S/o. A.J.P. Roche, Managing Partner, Corporation Tiles Works and Cracy Maria Roche, Partner, Corporation Tiles Works —Respondent
Criminal Appeal No. 208 of 2005
Decided on : 31-03-2009
Advocate Appeared:
Mr. Nithish Kumar Shetty, S. Vishwajith Shetty, for the Appellant
Mr. Pundikari Ishwar Bhat, for the Respondent
Presumption in favor of the holder of the cheque, burden of proof, and proper appreciation of evidence are crucial in determining the legal enforceability of a debt under Section 138 of N.I. Act.
Headnote:
Cheque Dishonour - Money Lending Business - Section 138 of N.I. Act - [Section 138 of N.I. Act] - The court discussed the issuance of the cheque, repayment of the borrowed amount, and the legal enforceability of the debt. The court highlighted the presumption in favor of the holder of the cheque and the burden of proof on the appellant to prove the case. The court also referenced the decision in Dinesh Harakchand Sankla Vs. Kurlon Ltd. and Others, (2006) CriLJ 261 and B.P. Venkatesulu Vs. K.P. Mani Nayar, (2001) CriLJ 745 to support its decision.
Fact of the Case:
The appellant, a money lender, filed a complaint against a partnership firm and its partners for dishonoring a cheque issued as repayment for a loan. The trial court convicted the respondents, but the appellate court acquitted them, leading to the appellant's appeal.
Finding of the Court:
The court found that the appellate court's decision to acquit the respondents was incorrect and illegal, as it did not properly appreciate the evidence. The court held that there was a legally recoverable debt under the cheque and set aside the acquittal, convicting the respondents under Section 138 of N.I. Act.
Issues: The main issue was whether the appellate court was justified in acquitting the respondents for an offence under Section 138 of N.I. Act.
Ratio Decidendi: The court emphasized the presumption in favor of the holder of the cheque, the burden of proof on the appellant, and the need for proper appreciation of evidence. It also highlighted the lack of evidence from the respondents to support their defense.
Final Decision: The appeal was allowed, the acquittal was set aside, and the respondents were convicted under Section 138 of N.I. Act.
K. Ramanna, J.— This appeal filed by the appellant-complainant under Section 378(4) of Cr.P.C., to set aside the judgment and order of acquittal passed by the 2nd Addl. Sessions Judge, Mangalore, in Crl. A. No. 132/04 dated 21.12.2004 and to confirm the judgment and order of conviction and sentence passed by the JMFC (IV) Court, Mangalore in C.C. No. 229/01 dated 8.4.2004.
2. The case of the appellant is that, he is carrying on the business of money lending by obtaining necessary money tending license from the concerned authorities. The Respondent No. 1 is a partnership firm and Respondents 2 and 3 are the partners. Respondents 2 and 3 are responsible for the affairs and conduct of the business of the R1-firm. For meeting the financial needs of the firm, i.e., Respondent No. 1, Respondents 2 and 3 along with one K. Prakash Basari had borrowed in all Rs. 4,10,000/- by executing on demand promissory note, dated 12.3.99 jointly agreeing and undertaking to repay the same together with interest at 23%. Towards part payment of the amount due to the appellant, Respondent-2 as a managing partner and representing the other respondents, issued cheque Ex.P2 bearing No. 79135 for 2,85,000/- dated 23.08.01 drawn on Syndicate Bank, Hampanakatta, Mangalore in favour of the appellant assuring that the said cheque will be honoured when presented for encashment, therefore he accepted the said cheque in good faith under bonafide belief. But when it was presented for encashment, through the appellant's banker, namely the Indian Overseas Bank, Hamapanakatta, Mangalore, it came to be dishonoured with endorsement Ex.P-3 dated 24.08.2001 as Insufficient funds'. Therefore the appellant herein got issued demand notice - Ex.P-4 through his Counsel on 27.08.2001 to all the respondents, though notice issued to R-2 & 3 was received by them on 30.08.2001, they neither repaid the amount nor send only reply. Notice sent to R1-Firm returned unserved with an endorsement 'intimation delivered - not claimed'. Therefore, a private complaint came to be filed before the JMPC (IV Court), Mangalore, under Section 200 Cr.P.C.
3. In order to prove the case, appellant herein examined its proprietor namely G.R. Sheth as PW-1 and one Sajjan Das as PW-2, 22 documents were got marked as Exs.P1 to P22. The respondent No. 2 examined himself as D.W.1 and examined one Ramachandra Ithale as DW-2. Two documents were got marked as Exs.D1 & D2.
4. After considering the arguments as well as the oral and documentary evidence placed on record by the rival parties, the trial Court convicted the respondents 1 to 3 for an offence punishable under Section 138 of the N.I. Act. and respondents 2 and 3 were sentenced to undergo S.I. for 3 months and to pay compensation of Rs. 3,20,000/- to the appellant within two months from the date of judgment Feeling aggrieved by the said judgment and order of conviction, the respondents 1 to 3 preferred an appeal Crl.A. 132/04 before the 2nd Addl. Sessions Judge, D.K., Mangalore, under Section 374(2) of Cr.P.C. On re-appreciation of the evidence, the learned Addl. Sessions Judge, reversed the judgment of order of conviction and sentence and complaint filed by the appellant was dismissed. Therefore, the appellant being the complainant has come up with this appeal.
5. Heard the arguments of the learned Counsel for the appellant as well as learned Counsel for the respondents.
6. It is argued by learned Counsel for appellant that, though the trial court rightly appreciated oral and documentary evidence placed on record by appellant and convicted respondents for the aforesaid offence, but the lower appellate court without properly appreciating the evidence placed on record come to the conclusion that the cheque - Bx.P2, issued by respondent No. 2 for and on behalf of R1 and R3, was not towards legally enforceable debt. It is argued that as per Ex.P-16, respondents repaid Rs. 1,25,000/-, out of Rs. 4,10,000/- borrowed from the appellant. It is further argue
