The appellant is before this Court assailing the common order da in passed by the High Court of Karnataka. Through the said order the learned Single Judge has allowed ...
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS.849850 OF 2011
Triyambak S. Hegde .…Appellant(s)
Versus
Sripad ….Respondent(s)
J U D G M E N T
A.S. Bopanna,J.
1.The appellant is before this Court assailing the
common order dated 01.12.2009 in Criminal Revision
Petition No.1282/2006 connected with Criminal Revision
Petition No.1481/2006 passed by the High Court of
Karnataka. Through the said order the learned Single Judge
has allowed Criminal Revision Petition No.1282/2006 filed
by the respondent herein. The Criminal Revision Petition
No.1481/2006 filed by the appellant herein has been
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dismissed. Consequently, the conviction of the respondent,
ordered by the learned Judicial Magistrate and affirmed by
the learned Session Judge is set aside.
2.The case of the appellant is that the respondent who
was known to him for the past few years approached the
appellant and informed that due to his financial difficulty he
intends to sell the house situate in Sirsi town. The appellant
agreed to purchase the same for the negotiated total sale
consideration of Rs.4,00,000/ (Rupees four lakhs only). An
agreement dated 06.06.1996 was executed by the respondent
while receiving the advance amount of Rs.3,50,000/
(Rupees three lakhs fifty thousand only). Subsequently,
when the appellant made certain enquiries, he learnt that
the house stood in the name of the father of the respondent
and the respondent did not have the authority to sell the
same. In that view, the appellant demanded the return of Rs.
3,50,000/ (Rupees three lakhs fifty thousand only) which he
had paid as the advance amount. The respondent instead of
paying the entire amount, issued a cheque dated 17.05.1998
for the sum of Rs. 1,50,000/ (Rupees one lakh fifty
thousand only) being part of the amount. The appellant
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presented the cheque for realisation on 20.05.1998 when it
came to be dishonoured with the endorsement ‘insufficient
funds’.
3.The appellant therefore got issued a notice informing
the respondent about the cheque being dishonoured and also
demanding payment of the cheque amount. The respondent,
though received the notice, failed to respond to the same. In
that view, the appellant filed a complaint under Section 200
of the Criminal Procedure Code (for short ‘CrPC’) on
14.07.1998 in the Court of the Judicial Magistrate, First
Class (for short ‘JMFC’) at Sirsi which was registered as
Criminal Case No.790/2000. Through the said complaint the
appellant sought prosecution of the respondent under
Section 138 of the Negotiable Instruments Act, 1881 (for
short ‘N.I. Act’). The learned JMFC after providing
opportunity to both the parties convicted the respondent
through the judgment dated 09.06.2005 for the offence
punishable under Section 138 of the N.I. Act; sentenced the
respondent to undergo simple imprisonment for six months
and to pay the fine of Rs. 2,00,000/ (Rupees two lakhs
only). In default of payment of the fine amount, the accused
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was ordered to undergo simple imprisonment for a further
period of three months. Out of the fine amount, Rs.
1,95,000/ (Rupees one lakh ninetyfive thousand only) was
ordered to be paid to the appellant as compensation.
4.The respondent herein claiming to be aggrieved by the
said judgment dated 09.06.2005 passed by the JMFC, filed
an appeal before the District & Sessions Judge, Uttara
Kannada, Karwar in Criminal Appeal No.57/2005. The
appellant herein also filed an appeal in Criminal Appeal
No.65/2005 before the District and Sessions Judge seeking
that the sentence imposed on the respondent by the Learned
JMFC be enhanced, as the compensation of Rs. 1,95,000/
(Rupees one lakh ninetyfive thousand only) ordered to be
paid to the appellant is insufficient. The learned Sessions
Judge having reexamined the matter and on reassessing the
evidence dismissed both the appeals through separate
judgments both dated 22.04.2006. The respondent herein, in
that view, filed the Revision Petition in Criminal Revision
Petition No.1282/2006 and the appellant herein filed the
connected Revision Petition No.1481/2006 before the High
Court. The learned Single Judge, as noted has allowed the
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Revision Petition filed by the respondent herein and set aside
the conviction order passed by the learned JMFC, which had
been confirmed by the learned Sessions Judge. It is in that
background, these appeals have arisen for consideration.
5.We have heard Mr. Rajesh Inamdar, learned counsel
for the appellant, Mr. G.V. Chandrasekar, learned counsel
for the respondent and perused the appeal papers.
6.Before the learned Magistrate, the appellant had
examined himself as PW1 and got marked the documents at
Exhibits P1 to P6. The deposition of the appellant as PW1
indicated that the appellant and the respondent were known
to each other for about 7 to 8 years prior to the transaction
in question. In that view, in the year 1996 the respondent
approached the appellant, explained his financial difficulties
and due to his financial need, offered to sell the property
situate in Sirsi. In that light, the price was finalised at Rs.
4,00,000/(Rupees four lakhs only) and on executing an
agreement dated 06.06.1996 (Exhibit P6), the advance
amount of Rs. 3,50,000/(Rupees three lakhs fifty thousand
only) was paid. The balance amount of Rs. 50,000/ (Rupees
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fifty thousand only) was to be paid at the time of registration
and the transaction was to be completed within six months.
It is alleged that the respondent kept on postponing the
registration on one pretext or the other. Therefore, on an
enquiry the appellant learnt that the property was in fact in
the name of the father of the respondent and the respondent
was not the absolute owner. Since the respondent was not
authorised to sell, the appellant proceeded to cancel the
agreement and demanded to pay back the advance amount.
In that view, the cheque dated 17.05.1998 (Exhibit P2) was
drawn by the respondent for the sum of Rs. 1,50,000/
(Rupees one lakh fifty thousand only) which was towards
part of the advance amount paid by him. The cheque on
being presented was however dishonoured. The memo issued
by the bank was marked as Exhibit P3. The notice issued by
the appellant and the postal receipt was marked as Exhibits
P4 and P5. The respondent did not choose to tender any
rebuttal evidence in the Court of JMFC, though he disputed
the incriminating circumstances which were put to him while
recording the statement under Section 313 of the CrPC.
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7.In that background, the learned JMFC on taking note
that the signature on the agreement dated Exhibit P6, more
particularly on the cheque at Exhibit P2 being admitted, it
raised presumption under Section 118 and 139 of the N.I.
Act, which had not been rebutted. Therefore, the learned
JMFC convicted the respondent. As noted, the learned
Sessions Judge on reappreciating the evidence had
confirmed the conviction and sentence. The respondent
however put forth the contention in the Revision Petition only
at the time of argument, that the appellant did not pay the
amount but his signature had been secured on the cheque
(Exhibit P2) and the agreement (P6) under peculiar
circumstances. It was contended on his behalf that he was a
party to a case in the Court of the Civil Judge, Sirsi wherein
he had engaged the services of an advocate by name Mr.
Rama Joshi. It was his further case that Mr. Vishwanath
Hegde who is the junior of Mr. Rama Joshi happens to be the
relative of the appellant herein. He, thus being in a dominant
position had obtained the signature.
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8.The learned Single Judge having accepted the said
contention which was raised in the Revision for the firsttime
during arguments proceeded to hold that the appellant had
not discharged the burden of proving that he had paid Rs.
3,50,000/ (Rupees three lakhs fifty thousand only) to the
respondent and that the cheque had been issued towards
payment of a part of the same. The learned Single Judge was
also of the opinion that the agreement at Exhibit P6 cannot
be believed, as well.
9.Mr. Rajesh Inamdar, the learned counsel appearing on
behalf of the appellant has contended that the signature on
the documents at Exhibit P6 and the cheque at Exhibit P2
is not disputed by the respondent. In that view, it is
contended that the learned JMFC was justified in raising a
presumption against the respondent and convicting him
since there was no rebuttal evidence or contrary material
whatsoever. It is contended that the document at Exhibit P6
was relied to indicate that there was a transaction entered
into between the parties towards which the payment was
made but the manner in which the High Court has adverted
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to the said document is beyond the scope of the requirement
in a proceeding under Section 138 of the N.I. Act. In that
circumstance, it is contended that the learned Single Judge
has proceeded at a tangent and has set aside the concurrent
judgments of the courts below, though limited scope was
available in a Revision Petition.
10.Mr. G.V. Chandrasekar, the learned counsel for the
respondent submitted that the trial court and the lower
appellate court has not examined the case in its correct
perspective. Instead, merely because the signature on the
cheque was admitted the courts jumped to the conclusion by
raising a presumption, though there was no evidence on
record to show that the appellant possessed the funds and
the same had been actually paid by him to the respondent to
constitute legally recoverable debt. It is contended that the
High Court was justified in examining and concluding with
regard to the circumstance under which the cheque had
been signed and, in that light, had set aside the conviction.
The order therefore does not call for interference is his
contention.
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11.From the facts arising in this case and the nature of
the rival contentions, the record would disclose that the
signature on the documents at Exhibits P6 and P2 is not
disputed. Exhibit P2 is the dishonoured cheque based on
which the complaint was filed. From the evidence tendered
before the JMFC, it is clear that the respondent has not
disputed the signature on the cheque. If that be the position,
as noted by the courts below a presumption would arise
under Section 139 in favour of the appellant who was the
holder of the cheque. Section 139 of the N.I. Act reads as
hereunder:
“139. Presumption in favour of holder It shall be
presumed, unless the contrary is proved, that the holder
of a cheque received the cheque of the nature referred to
in section 138 for the discharge, in whole or in part, of
any debt or other liability.”
12.Insofar as the payment of the amount by the appellant
in the context of the cheque having been signed by the
respondent, the presumption for passing of the
consideration would arise as provided under Section 118(a)
of N.I. Act which reads as hereunder:
“118. Presumptions as to negotiable instruments –
Until the contrary is proved, the following presumptions
shall be made:
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(a)of consideration – that every negotiable
instrument was made or drawn for
consideration, and that every such
instrument, when it has been accepted,
indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or transferred
for consideration.”
13. The above noted provisions are explicit to the effect
that such presumption would remain, until the contrary is
proved. The learned counsel for the appellant in that regard
has relied on the decision of this court in K. Bhaskaran
vs. Sankaran Vaidhyan Balan & Anr. (1999) 7 SCC 510
wherein it is held as hereunder:
“9. As the signature in the cheque is admitted to be that
of the accused, the presumption envisaged in Section
118 of the Act can legally be inferred that the cheque was
made or drawn for consideration on the date which the
cheque bears. Section 139 of the Act enjoins on the Court
to presume that the holder of the cheque received it for
the discharge of any debt or liability. The burden was on
the accused to rebut the aforesaid presumption. The Trial
Court was not persuaded to rely on the interested
testimony of DW1 to rebut the presumption. The said
finding was upheld by the High Court. It is not now open
to the accused to contend differently on that aspect.”
14.The learned counsel for the respondent has however
referred to the decision of this Court in Basalingappa vs.
Mudibasappa (2019) 5 SCC 418 wherein it is held as
hereunder:
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“25. We having noticed the ratio laid down by this
Court in the above cases on Sections 118 (a) and
139, we now summarise the principles enumerated
by this Court in following manner:
25.1. Once the execution of cheque is
admitted Section 139 of the Act mandates a
presumption that the cheque was for the discharge
of any debt or other liability.
25.2. The presumption under Section 139 is a
rebuttable presumption and the onus is on the
accused to raise the probable defence. The
standard of proof for rebutting the presumption is
that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the
accused can also rely on the materials submitted
by the complainant in order to raise a probable
defence. Inference of preponderance of probabilities
can be drawn not only from the materials brought
on record by the parties but also by reference to the
circumstances upon which they rely.
25.4. That it is not necessary for the accused to
come in the witness box in support of his defence,
Section 139 imposed an evidentiary burden and not
a persuasive burden.
25.5. It is not necessary for the accused to come in
the witness box to support his defence.
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26. Applying the preposition of law as noted above,
in facts of the present case, it is clear that
signature on the cheque having been admitted, a
presumption shall be raised under Section 139 that
the cheque was issued in discharge of debt or
liability. The question to be looked into is as to
whether any probable defence was raised by the
accused. In crossexamination of PW1, when the
specific question was put that cheque was issued in
relation to loan of Rs.25,000 taken by the accused,
PW1 said that he does not remember. PW1 in his
evidence admitted that he retired in 1997 on which
date he received monetary benefit of Rs.8 lakhs,
which was encashed by the complainant. It was
also brought in the evidence in the evidence that in
the year 2010, the complainant entered into a sale
agreement for which he paid an amount of
Rs.4,50,000 to Balana Gouda towards sale
consideration. Payment of Rs.4,50,000 being
admitted in the year 2010 and further payment of
loan of Rs.50,000 with regard to which Complaint
No.119 of 2012 was filed by the complainant, copy
of which complaint was also filed as Ext. D2, there
was burden on the complainant to prove his
financial capacity. In the year 20102011, as per
own case of the complainant, he made payment of
Rs.18 lakhs. During his crossexamination, when
financial capacity to pay Rs. 6 lakhs to the accused
was questioned, there was no satisfactory reply
given by the complainant. The evidence on record,
thus, is a probable defence on behalf of the
accused, which shifted the burden on the
complainant to prove his financial capacity and
other facts.”
Page 13 of 23
15. In that light, it is contended that the very materials
produced by the appellant and the answers relating to lack
of knowledge of property details by PW1 in his cross
examination would indicate that the transaction is doubtful
and no evidence is tendered to indicate that the amount was
paid. In such event, it was not necessary for the respondent
to tender rebuttal evidence but the case put forth would be
sufficient to indicate that the respondent has successfully
rebutted the presumption.
16. On the position of law, the provisions referred to in
Section 118 and 139 of N.I. Act as also the enunciation of
law as made by this Court needs no reiteration as there is no
ambiguity whatsoever. In, Basalingappa vs. Mudibasappa
(supra) relied on by the learned counsel for the respondent,
though on facts the ultimate conclusion therein was against
raising presumption, the facts and circumstances are
entirely different as the transaction between the parties as
claimed in the said case is peculiar to the facts of that case
where the consideration claimed to have been paid did not
find favour with the Court keeping in view the various
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transactions and extent of amount involved. However, the
legal position relating to presumption arising under Section
118 and 139 of N.I. Act on signature being admitted has
been reiterated. Hence, whether there is rebuttal or not
would depend on the facts and circumstances of each case.
17. In the instant facts, as noted, the case put forth
was that there was a transaction between the parties where
the respondent had agreed to sell the house towards which
an advance amount of Rs.3,50,000/ (Rupees three lakhs
fifty thousand only) was paid. The cheque issued by the
respondent was towards part repayment of the advance
amount since the appellant realized that the respondent did
not have proper title to the property and the transaction
could not be carried forward. Since the signature on the
agreement (Exhibit P6) and more particularly the
dishonored cheque (Exhibit P2) was not disputed, the
presumption as provided in law had arisen. Such
presumption would remain till it is rebutted. The question
however is as to whether, either from the material available
on record or the nature of contentions put forth it could be
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gathered that the presumption had been rebutted by the
respondent. As noted by the High Court, the contention of
the respondent was that the relative of the appellant was the
junior in the office of his advocate, Mr. Rama Joshi, who
represented the respondent in a civil case. In that light, it
was further contended that due to such dominant position,
the respondent was made to sign on the agreement and the
cheque though the money had not been paid. The said story
was urged for the first time before the High Court. There is
no such suggestion or admission to that effect as contended
by the learned counsel for the respondent. In fact, the
suggestion made to PW1 in his crossexamination is to
contend that the cousin of the appellant was an advocate
and as to whether he had consulted him before entering into
the agreement, to which PW1 has answered that he did not
find the need to do so. The admission that his cousin is an
advocate does not lead to the conclusion that he had
admitted that he was in a dominant position.
18. The Learned Single Judge however while accepting the
said story has referred to certain discrepancies in the
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agreement (Exhibit P6) relating to the details of the property
and the appellant having admitted with regard to not having
visited the property or having knowledge of the location of
the property. Such consideration, in our opinion, was not
germane and was beyond the scope of the nature of
litigation. The validity of the agreement in the manner as has
been examined by the learned Single Judge may have arisen
if the same was raised as an issue and had arisen for
consideration in a suit for specific performance of the
agreement. The decision in K. Chinnaswamy Reddy vs.
State of Andhra Pradesh and Anr. AIR 1962 SC 1788
relied on by the learned counsel for the respondent would
not be of assistance in the present facts. Firstly, in the said
decision this Court has expressed the limited power
available to the High Court in Revision Petition. Even
otherwise, we have disapproved the manner in which the
learned Single Judge has proceeded to examine the matter
on contentions which were not raised as a foundation before
the Trial Court. In the instant case, the said agreement
(Exhibit P6) had been relied upon only to the limited extent
to indicate that there was a transaction between the parties
Page 17 of 23
due to which the amount to be repaid had been advanced.
To that extent the document had been proved in evidence
and such evidence had not been discredited in the cross
examination.
19. Further, though the respondent had put forth the
contention that a relative of the appellant was the junior of
his advocate and he has used his dominant position to
secure the signature on the cheque, there is absolutely no
explanation whatsoever to indicate the reason for which
such necessity arose for him to secure the signatures of the
respondent, if there was no transaction whatsoever between
the parties. That apart, the said story even to be examined
was put forth for the first time before the High Court. As is
evident from the records the notice issued by the appellant
intimating the dishonorment of the cheque and demanding
payment, though received by the respondent has not been
replied. In such situation, the first opportunity available to
put forth such contention if true was not availed. Even in
the proceedings before the learned JMFC, the respondent
has not put forth such explanation in the statement
Page 18 of 23
recorded under Section 313 of CrPC nor has the respondent
chosen to examine himself or any witness in this regard. The
said contention had not been raised even in the appeal filed
before the learned Sessions Judge.
20. Further, the story as put forth apart from being an
afterthought, ex facie appears to be contrary to the records
since the contention on behalf of the respondent is that the
dominant position of the junior advocate in the office of Mr.
Rama Joshi was used to secure the signature when the
respondent had engaged the said advocates in an earlier civil
case. From the cause title in the present case, in Criminal
Case No.790/2000 before the JMFC, it is seen that Mr.
Rama Joshi is the same learned advocate who had defended
the respondent in this litigation. If what was being stated
was the true fact, the respondent would have brought the
same to the notice of the said advocate and in such situation
would not have engaged the same advocate against whose
junior he had a grievance and engage him to represent the
case relating to dishonor cheque which was of the same
subject matter. Further, if the cheque was secured in such
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circumstance and was not voluntary, it is difficult to
comprehend as to why it would have been drawn for
Rs.1,50,000/(Rupees one lakh fifty thousand only) only
when it is the case of the appellant that the advance amount
paid was Rs.3,50,000/(Rupees three lakh fifty thousand
only) and had to get back the entire advance paid. The
natural conduct would have been to secure for the full
amount if that was the situation. Keeping all these aspects
in view, the case put forth by the respondent does not satisfy
the requirement of rebuttal even if tested on the touchstone
of preponderance of probability. Therefore, in the present
facts it cannot be held that the presumption which had
arisen in favour of the appellant had been successfully
rebutted by the respondent herein. The High Court therefore
was not justified in its conclusion.
21. Having arrived at the above conclusion, it would be
natural to restore the judgment of the Learned JMFC.
Though in that regard, we confirm the order of conviction,
we have given our thoughtful consideration relating to the
appropriate sentence that is required to be imposed at this
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stage, inasmuch as; whether it is necessary to imprison the
respondent at this point in time or limit the sentence to
imposition of fine. As noted, the transaction in question is
not an out and out commercial transaction. The very case of
the appellant before the Trial Court was that the respondent
was in financial distress and it is in such event, he had
offered to sell his house for which the advance payment was
made by the appellant. The subject cheque has been issued
towards repayment of a portion of the advance amount since
the sale transaction could not be taken forward. In that
background, what cannot also be lost sight of is that more
than two and half decades have passed from the date on
which the transaction had taken place. During this period
there would be a lot of social and economic change in the
status of the parties. Further, as observed by this Court in
Kaushalya Devi Massand vs. Roopkishore Khore (2011) 4
SCC 593, the gravity of complaint under N.I. Act cannot be
equated with an offence under the provisions of the Indian
Penal Code, 1860 or other criminal offences. In that view, in
our opinion, in the facts and circumstances of the instant
case, if an enhanced fine is imposed it would meet the ends
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of justice. Only in the event the respondentaccused not
taking the benefit of the same to pay the fine but committing
default instead, he would invite the penalty of imprisonment.
Hence, appropriate modification is made to the sentence in
the manner as indicated hereinbelow:
22. For all the aforestated reasons, the following order;
(i)The order dated 01.12.2009 passed by the
High Court in Criminal Revision Petition No.
1282/2006 and 1481/2006 are set aside.
(ii)The conviction ordered in C.C. No.790/2000
by the learned JMFC is restored.
(iii)The sentence to undergo simple
imprisonment for six months and fine of
Rs.2,00,000/ (Rupees two lakhs only) is
however modified. The Respondent/Accused
is instead sentenced to pay the fine of Rs.
2,50,000/ (Rupees two lakhs fifty thousand
only) within three months. In default of
payment of fine the Respondent/Accused
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shall undergo simple imprisonment for six
months.
(iv)From the fine amount, a sum of Rs.
2,40,000/ (Rupees two lakhs forty thousand
only) shall be paid to the
Appellant/Complainant as compensation.
(v)The Appeals No.849850/2011 are
accordingly allowed in part.
(vi)The pending applications, if any, stand
disposed of.
………….…………CJI
(N.V. RAMANA)
………….…………….J.
(SURYA KANT)
………….…………….J.
(A.S. BOPANNA)
New Delhi,
September 23, 2021
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