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2024 Supreme(Online)(Kar) 39279
KARNATAKA HIGH COURT
V SRISHANANDA J
SRI. C. ASHOK – Appellant
Versus
SRI. N. SRINIVASA – Respondent
CRL.RP 647 / 2021
For the Appellants/Petitioners: SRI. DAYALU K N.
For the Respondents: SRI. B.S. PRASAD
The court upheld the conviction for dishonor of cheques under Section 138 of the Negotiable Instruments Act, affirming the presumption of validity and confirming the mortgage transaction as sufficient evidence.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Criminal Procedure Code, 1973 - Section 200 - Conviction for dishonor of cheques - Accused convicted for issuing five dishonored cheques totaling Rs.1,00,00,000/- and ordered to pay double the cheque amount as compensation - The trial court found sufficient evidence of a mortgage transaction supported by a registered mortgage deed - The accused's defense of lack of lending capacity was dismissed as unsubstantiated - The appellate court confirmed the conviction, emphasizing the presumption of validity under Section 139 of the Negotiable Instruments Act - The fine was reduced from Rs.2,00,10,000/- to Rs.1,80,00,000/- with a warning of increased imprisonment for non-payment. (Paras 2, 32, 50, 51)
(B) Presumption of validity - Under Section 139 of the Negotiable Instruments Act, a presumption exists in favor of the holder of a cheque regarding the consideration for which it was issued, which can only be rebutted by sufficient evidence. (Paras 39, 41)
Facts of the case:
The accused was convicted for issuing five cheques that were dishonored due to insufficient funds, related to a mortgage transaction evidenced by a registered mortgage deed. The complainant alleged that Rs.1,00,00,000/- was lent, with part of the amount paid in cash and part via cheque.
Findings of Court:
The trial magistrate upheld the conviction based on the mortgage deed and evidence presented, while the appellate court confirmed this decision and justified the fine imposed.
Issues: The primary issue was whether the accused had the capacity to lend the stated amount and whether the issuance of the cheques was valid.
Ratio Decidendi: The court found that the registered mortgage deed constituted sufficient evidence of the transaction, and the accused failed to provide adequate rebuttal to the presumption of validity of the cheques under Section 139 of the Negotiable Instruments Act.
Result: Criminal revision petition allowed in part; fine reduced to Rs.1,80,00,000/-.
| Table of Content |
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| 1. final order reducing fine and maintaining conviction. (Para 50 , 51) |
ORDER
Heard Sri.K.N.Dayalu learned counsel for the revision petitioner and Sri.B.S.Prasad, learned counsel for the respondent.
2. Accused who suffered an order of conviction in C.C.No.3265/2016, for the offence punishable under Section 138 of Negotiable Instruments Act and ordered to pay Rs.2,00,10,000/- (Rupees Two Crores Ten Thousand Only) as against the cheque amount of Rs.1,00,00,000/- (Rupees One Crore Only) and out of the fine amount, a sum of Rs.2,00,00,000/- was ordered to be paid as compensation and Rs.10,000/- towards defraying expenses of the State. The said order of conviction and sentence was confirmed in Criminal Appeal No.71/2019, aggrieved by the same, the revision petitioner has preferred the present revision petition.
3. Facts in brief for the disposal of the revision petition are as under:
4. A criminal prosecution was launched by the respondent-complainant against the accused for the offence punishable under Section-138 of the Negotiable Instruments Act by filing a complaint with the Jurisdictional Magistrate under Section 200 of Cr.P.C. Contents of the complaint would reveal that there was a mortgage transaction between the complainant and the accused and the said mortgage transaction was evidenced by a Registered Mortgage Deed dated 07.08.2015 (Exhibit-P16).
5. Under Exhibit-P16 a sum of Rs.1,00,00,000/- was lent as mortgage money by the complainant to the accused. The said documents also shows that a sum of Rs.25,00,000/- lakh was paid by Cheque belonging to the wife of the complainant, which was duly encashed by the accused and the balance amount is Rs.75,00,000/- was paid by way of cash in the presence of the witnesses.
6. Towards the repayment of the said amount, the accused issued five cheques dated 15.01.2016, 20.01.2016, 25.01.2016, 30.01.2016 and 05.02.2016 drawn on HDFC Bank, Old Madras Road Branch, Bangalore. Those cheques on presentation got dishonored with an endorsement ‘insufficient funds’. Legal notice was issued calling upon the payment of the amount covered under those cheques. The accused was not found during delivery time and as such, an intimation was delivered by the Postman and when there was no collection of the registered cover by the accused by visiting the post office, that the cover was returned with an endorsement ‘addressee refused - returned to the sender’. Since there was no compliance to the callings of the legal notice, action was initiated by the complainant against the accused, for the redressal of his grievances.
7. Learned Trial Magistrate took cognizance of the offence alleged against the accused and summoned the accused. Plea was recorded. Accused pleaded not guilty therefore trial was held.
8. In order to prove the case of the complainant, the complainant got himself examined as PW-1 and placed on record 42 documents which were exhibited and marked as Exhibits-P1 to P42 comprising of five dishonored cheques, bank endorsements, copy of the legal notice, postal receipts, RPAD covers, postal acknowledgment, mortgage deed, amount ledger extract, portion of the transaction, bank account statement, form No.16, tax paid receipts, tax paid receipts of the wife of the complainant and RTC extracts of the landed properties of the complainant.
9. Detailed cross-examination of PW-1 did not yield any positive result in disbelieving the version of the complainant. The Mortgage deed being a registered mortgage deed was also tried to be assailed by the accused by suggesting to PW-1 that the complainant had no financial capacity to lend a sum of Rs.75,00,000/- in cash and such a suggestion was not only denied by the complainant but also probablised as to how he got the money to lend the same to the accused.
10. Thereafter, the accused statement as is contemplated under Section 313 of Cr.P.C. was recorded by the Trial Magistrate. The accused has denied all the incriminating circumstances that were found
