Devindrappa vs Shababulala Kumaji

Huluvadi G. Ramesh, J.—This case is arising out of the order passed by the Sessions Judge, Yadgir in Crl. Appeal No. 9/2010 on the complaint filed u/s 138 r/w. Sec. 143 of the Negotiable Instruments Act. The JMFC, Shahapur holding that there is dishonour of cheque, has directed the petitioner/accused to pay compensation of Rs. 2,00,000/- and in default of payment of fine, to undergo simple imprisonment for one year and also imposed fine of Rs. 3,000/-.

The allegation against the petitioner is that he had borrowed money from the complainant towards purchase of the tractor. The complainant is one of the partner of the firm by name M/s. Sha Babulal Khumaji and Partners. However, according to the petitioner/accused, he has borrowed loan from the bank and remitted the amount to the partnership firm. There is no due of the amount to the partnership firm. The partnership firm is a vendor of tractors and they in turn, misused the cheque and presented the same to the bank. The petitioner/accused was not due of any amount, debt was cleared and the cheque which was given as security, was misused without verifying the same.

According to the learned counsel for the petitioner, the trial Court as well as the appellate Court held that there is dishonour of cheque despite there is no enforceable debt and the cheque was only given as a security. Without examining the same and also when the petitioner has reimbursed all the amount having borrowed from Krishana Grameen Bank, the order passed is erroneous.

Heard the learned counsel for the respondent.

It appears that the petitioner/accused has purchased the tractor from the respondent/complainant. The petitioner/accused having applied for loan from the bank, remitted the amount to the respondent/ complainant who is the vendor of the tractor. According to the learned counsel for the petitioner, there is no hypothecation of the vehicle. Borrowing loan from the bank, the amount was also paid to the vendor of the tractor and so also the bank loan was cleared. In this regard, the bank had issued no due certificate and also has issued an endorsement to the Insurance Company. The main case of the petitioner is that there was no such enforceable debt. The complainant has misused the cheque which was given as security. Both the Courts below have ordered to pay compensation of Rs. 2,00,000/- without taking into consideration that the agreed payment has been made to the complainant. The impugned orders passed by both the Courts below are hereby set aside. The matter is remitted to the learned Magistrate i.e., JMFC, Shahapur to enable the petitioner/accused to produce the letter of ICICI Bank dated 04.11.2005 and also permit the petitioner to cross-examine the complainant to point out non-production of power of attorney and render decision in accordance with law.

Send back the records to the concerned Court. The amount in deposit before the lower Court be returned to the petitioner/accused.

Accordingly, petition is allowed in part.