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2022 Supreme(Telangana) 614

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
G. Radha Rani, J.
K. Suri Babu , Surendra Babu – Petitioner
Versus
U. Ramesh and Another – Respondents
Criminal Revision Case No.994 of 2019
Decided On : 13-12-2022

Advocates:
Advocate Appeared:
For the Petitioner: L Harish
For the Respondent: Sakinala Ravi Kumar

Headnote:

Negotiable Instruments Act, 1881 - Section 118(a), 139 - General Clauses Act, 1897 - Section 27 - Indian Evidence Act, 1872 - Section 114 – Cheque was dishonoured - Failed to repay loan - Appeal against conviction - Criminal Revision Case is filed by petitioner-accused aggrieved by judgment passed in Criminal Appeal - Held, There is business relationship between parties and both accused and complainant were in field of construction of houses and were selling same to prospective purchasers - Defence taken by accused does not inspire confidence or meet standard of preponderance of probability even in this case also - Trial court and lower appellate court rightly considered all aspects and came to conclusion about guilt of accused - Court does not find any merit in contentions of learned counsel for revision petitioner-accused that trial court and lower appellate court passed judgments on conjenctures and surmises and that accused discharged presumptions by preponderance of probability - Criminal Revision Case is dismissed.

Judgement Key Points

Based on the provided legal document, here are the key points:

  • The Criminal Revision Case was filed by the petitioner-accused, K. Suri Babu and Surendra Babu, aggrieved by the judgment dismissing their appeal and modifying the sentence in a case involving the dishonour of a cheque for Rs. 2,50,000/- (!) (!) .
  • The core dispute involves a loan of Rs. 2,50,000/- advanced by the complainant to the accused on 08.02.2012, which was to be repaid within six months (!) .
  • The accused issued a cheque (No. 597213) dated 28.01.2013 to repay the loan, but it was dishonoured twice: first due to insufficient funds and subsequently because the account was marked as inoperative/dormant (!) .
  • A legal notice was sent by the complainant on 19.02.2013, which was refused by the accused, leading to deemed service under Section 27 of the General Clauses Act and Section 114 of the Indian Evidence Act (!) (!) .
  • The accused's primary defence was that the actual loan amount was only Rs. 50,000/- and that the complainant lacked the financial capacity to lend the full amount or file the necessary income tax returns (!) (!) .
  • The trial court and lower appellate court held that the accused failed to rebut the presumptions under Section 118(a) and Section 139 of the Negotiable Instruments Act, as mere denial of the loan amount or lack of income tax returns is not sufficient evidence (!) (!) .
  • The High Court rejected the argument that the omission of the Advocate's signature on the legal notice rendered it invalid, citing various High Court precedents stating that such omission is not fatal if the notice reaches the accused and the facts are established (!) (!) (!) (!) (!) (!) .
  • Relying on the Hon'ble Apex Court's decision in Kalamani Tex and another v. P. Balasubramanian, the Court affirmed that once the signature on the cheque is admitted, the burden shifts to the accused to discharge the presumption with a defence meeting the "standard of preponderance of probability," not mere possibility (!) (!) .
  • The Court found the accused's defence regarding the loan amount and the complainant's financial status inconsequential and lacking the required standard of probability, especially given the existing business relationship between the parties in the construction field (!) .
  • Consequently, the Criminal Revision Case was dismissed, confirming the conviction under Section 138 of the Negotiable Instruments Act (!) .
  • As per the principles laid down in Kalamani Tex, the sentence of imprisonment was modified to a fine of Rs. 5,00,000/- (double the cheque amount) to be paid as compensation, with a stipulation of two years' simple imprisonment in case of default (!) (!) .

ORDER :

This Criminal Revision Case is filed by the petitioner-accused aggrieved by the judgment dated 31.07.2019 passed in Criminal Appeal No.794 of 2017 by the Additional Metropolitan Sessions Judge for trial of Jubilee Hills Car Bomb Blast Case cum Additional Family Court cum XXIII Additional Chief Judge cum IX Additional Metropolitan Sessions Judge, Hyderabad in dismissing the appeal by modifying the sentence of simple imprisonment from six months to three months while maintaining payment of compensation of Rs.2,50,000/- (cheque amount) in default, to undergo simple imprisonment for three months as imposed by the XII Special Magistrate, Hyderabad at Erramanzil vide judgment dated 11.07.2017 in CC.No.134 of 2016.

2. The parties are hereinafter referred as arrayed before the trial court.

3. The case of the complainant was that the accused had borrowed a sum of Rs.2,50,000/- from the complainant as hand-loan on 08.02.2012 and promised to repay the loan amount within six months but failed to repay the same within the stipulated time. On demand by the complainant, the accused issued a cheque bearing No.597213 dated 28.01.2013 for Rs.2,50.000/- drawn on State Bank of India, Vanasthalipuram Branch, Hyderabad, but the said cheque was dishonoured on presentation vide cheque return memo dated 29.01.2013. The complainant informed to the accused about the dishonor of the subject cheque, but the accused requested the complainant to present the said cheque after one week and that he would arrange sufficient funds in his account. Thereafter, once again, the complainant presented the subject cheque but again the cheque was returned with the endorsement that account was inoperative/dormant-refer to drawer vide cheque return memo dated 06.02.2013. Thereafter, the complainant issued statutory legal notice on 19.02.2013. But, however, the said notice was returned with postal endorsement that party refused on 25.02.2013. As such, the complainant preferred the complainant.

4. The case was tried by the XII Special Magistrate, Hyderabad. During the course of trial, the complainant examined PWs.1 and 2 and marked Exs.P1 to P6. No defence evidence was adduced by the accused.

5. The defence taken by the accused was that he obtained hand loan of Rs.50,000/- from the complainant and gave an empty cheque and pro-note to the complainant towards security. The complainant was not having financial capacity to advance Rs.2,50,000/- towards loan and the complainant failed to file his income tax returns in proof of his lending loan. The complainant managed the postal authorities to get the endorsement on the legal notice. No legal notice was served upon him.

6. The trial court, on considering the oral and documentary evidence on record and considering the presumptions under Section 118 (a) and Section 139 of the Negotiable Instruments Act (for short ‘NI Act’), held that the burden would lie upon the accused to rebut the presumptions existing in favour of the complainant, when he admitted his signatures on the cheque and the pro-note and also placed reliance upon Section 27 of the General Clauses act and Section 114 of the Indian Evidence Act and observed that a mere denial that the legal notice was not served upon him, was not sufficient to rebut the presumption of deemed service under the above provisions, when the accused was not denying his address appearing on the legal notice. It further observed that there was no law that mandates the lender to declare the amount of loan in his income tax returns and considering the provisions of Section 269 SS of the Income Tax Act held that the bar pertained to taking the loan and not for giving the loan and found the accused guilty for the offence under Section 138 of the NI Act and convicted him and sentenced to simple imprisonment for six months and to pay compensation of Rs.2,50,000/- to the complainant within one month and in default of payment of such compensation, to suffer simple imprisonment for t

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