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Judgment
This is Accused appeal filed under Section 397 r/w 401 of the Criminal Procedure Code, 1973 (for short, Cr.P.C) assailing the impugned judgment and order of conviction dated 09.03.2023, passed by the Prl.Civil Judge and JMFC., Jamakhandi in CC No.989/2018 (for short, Trial court) and confirmed by the I Addl. District and Sessions Judge., Bagalkot (for short first Appellate Court) sitting at Jamakhandi in Crl.Appeal.No.5024/2023 dated: 22.06.2023 for the offences punishable under Section 138 of Negotiable Instrument Act (hereinafter, referred to as ‘NIAct’).
For convenience, the parties hereinafter are referred to as complainant and the accused.
The revision petitioner herein is accused.
Facts of the case in brief is that, The complainant Sri. Guru Kadasiddeshwar Souhard Credit Co-Operative Society Jamkhandi has filed the complaint against the accused U/s 200 of Cr.P.C. for taking cognizance of the offence punishable U/s 138 of N.I.Act.
By stating that, complainant is carrying banking business, the accused has approached the complainant for financial help and the said complainant has lent Rs.3,00,000/- to the accused and for that the accused had executed necessary documents in favour of the complainant since the accused failed to repay the loan amount periodically the complainant started reminding the accused to repay the loan amount, the accused in order to repay the same, issued cheque in a sum of Rs.2,50,666/- bearing cheque No.407479 dated: 30.05.2018 to drawn on Corporation Bank Ltd.,
When the complainant bank presented the same to its banker i.e, Axis Bank Jamakhandi Brach for enchasment on 01.06.2018 it was returned with an endorsement of insufficient funds. The complainant issued legal notice to the accused on 06.06.2018 which was duly served on him on 08.06.2018 the Accused replied to the said notice on 14.06.2018 by stating that, fixed deposit belonging to him is matured, but complainant bank is not returning the same. Said fact was intimated to the accused by the complainant through notice dated:07.03.2017, but the accused has refused the notice. Complainant bank has issued reply notice to accused on 30.06.2018 intimating all the facts and asked to settle the amount but the accused has not repaid the amount and hence complainant constrained to file the complaint.
The trial court after taking cognizance issued a summons to the accused, the accused appeared and plea of the accused is recorded and he pleaded not guilty and claimed for trial.
The complainant in order to prove its case, examined the Manager of complainant Bank as P.W.1 and got marked 10 documents as Ex.P.1 to 10.
After completion of the evidence of the complainant the accused was examined under Section 313 of Cr.P.C where he denied all incriminating evidence available against him and led his defence evidence, examined himself as DW1 and got marked 04 documents Ex.D.1 to Ex.D.4.
Learned magistrate after hearing both sides proceed to pass the impugned judgment, whereby the accused is found guilty and convicted for the said offence and sentenced to pay a fine of Rs.2,55,666/- and in default of payment of fine he shall undergo simple imprisonment for a period 6 months vide impugned judgment dated: 09.03.2023.
Being aggrieved by the said impunged judgment, the accused preferred the appeal before the First Appellate Court in Criminal Appeal No. 5024/2023, learned Sessions Judge after hearing the arguments on both sides dismissed the appeal vide impugned judgment dated: 22.06.2023. Being aggrieved by the impugned judgment the accused preferred the present revision petition on the following grounds;
Both the courts below have not properly appreciated the evidence on record and erroneously convicted the accused. Both the courts ought to have seen that, the accused has taken over draft on deposited amount made by him and his mother and the same was repaid periodically by way of installments and at the time of a availment of the loan the bank took the signature of the accused on blank cheques as a security which was not properly appreciated by both the courts.
Further, both the courts below have taken note that, the accused and his mother deposited sum of Rs.1,11,000/- on 30.05.2011 which was matured on 03.03.2017 and in the meanwhile the mother of accused expired leaving behind him and his two sisters at Ex.D.3 and submitted an application under Ex.D.2 to adjust the remaining balance of the loan amount towards the maturity amount but failed to adjust the same for the reasons best known to them and the same was not taken into consideration and passed the order which is erroneous and illegal.
That the courts below could have further seen that the date on which overdraft facility was provided is not stated in the complaint or in their evidence and even no extract of repayment made by the petitioner is not produced which are the vital documents to show that, as on the date of issuance of the cheque there was outstanding balance to be repaid to them and the respondent has misused the signed cheques which was given to them at the time of withdrawing the overdraft facility and therefore the finding recorded by the courts below on this aspect is perverse and capricious.
Both the courts have further seen that, the petitioner has deposited a sum of Rs.1,11,000/- and before initiation of the proceedings it was matured at Rs.2,22,000/- and cheques were misutilised and the amount was shown at Rs.2,50,666/- and inspite of the reply legal notice Ex.P.6 and Ex.D.2 the respondent has not adjusted the deposited amount towards their outstanding balance and therefore, no fault can be found with the petitioner and even the trial court as well as appellate court has not considered this aspect which has come to wrong conclusion and the same is unsustainable in law.
Both the courts below should have seen that lending rate of interest is higher than the payment of an FD amount and this was the reason the respondent purposely and intentionally could not adjust the deposited amount towards the outstanding amount and therefore the petitioner cannot be held to be defaulter for repayment of loan and therefore order could not have been passed, but failed to do so.
Both the courts below should have further considered that Ex.D.1 has matured on 03.03.2017 since then it is lying with them without any interest and previous rate of interest is taken in to account for the deposited amount now it becomes Rs.4,44,000/- and odd as on today and if the same is taken in to account the respondent is liable to return the amount after deducting their cheque amount but failed to consider this aspect hence courts below have committed illegally.
That the findings recorded by the courts below on points formulated for disposal of the case in hand is wrong and capricious so the order is illegal.
The appellate court has not assigned proper reasons for recording of finding on point No.1 and that too without considering Ex.D.2 to D6 and the one recorded is contrary to the documents and evidence on record.
On these grounds the accused prayed for allow this revision petition by setting aside the impugned judgments of convicting the accused. After filing this revision petition, a notice has sent to the respondent/complainant and he has appeared through his counsel and resisted the petition, recording on both the court summoned.
Heard learned counsel, appearing for the petitioner Sri.A.B.Nesargi and learned counsel for the respondent Sri.Prashant S.Kadadevar. Perused the records.
Following point would arise for consideration is:
Whether the impugned judgment passed by the appellate court suffers from illegality, perversity and calls for interference by this court?
The contention of the complainant-Co-operative Bank is that the accused availed an overdraft loan of Rs.3,00,000/- from the complainant-Bank and agreed to repay the said loan amount in installments. Despite repeated demands, the accused failed to repay the loan amount regularly. At the request of the complainant-Bank, the accused issued a cheque for a sum of Rs.2,50,666/-, which was due and payable as on the date of issuance of the cheque dated 30.05.2018. The said cheque was presented for encashment, but it was dishonoured for want of insufficient funds. Thereafter, the complainant issued a legal notice, to which the accused replied. The complainant, considering the reply to be unsatisfactory, filed the complaint. Both the Courts below, upon appreciation of the evidence on record, have held that the accused committed the offence.
In the present revision petition, the accused contends that both the Courts below have committed an error in convicting him. It is argued that, firstly, the accused availed an overdraft loan of Rs.3,00,000/- from the complainant-Bank, which fact is not in dispute. It is also not disputed that the accused issued the cheque bearing his signature. His contention is that he and his mother had deposited a fixed deposit with the complainant-Bank and that the said fixed deposit was subsisting with the Bank at the time of dishonour of the cheque. The accused also replied to the notice issued by the complainant-Bank. The reply notice is marked as Ex.P6 and is dated 14.06.2018. In the said reply, the accused stated that he had deposited a sum of Rs.1,11,000/- in his mother's name by way of a fixed deposit and that the said fixed deposit had matured on 03.03.2017, with an amount of Rs.2,20,000/- becoming due and payable. It was further stated that, despite the letter addressed to the Bank, the Bank had deliberately withheld the said amount with a mala fide intention to cause loss to the accused. It was also contended that the details of the overdraft account were not correctly mentioned in the notice and that the notice had been issued on false grounds. Hence, the accused contended that he was not liable to pay the amount claimed, as he had requested the Bank to adjust the fixed deposit amount towards the outstanding loan amount. Therefore, the accused/petitioner contends that, despite his having issued a reply to the legal notice, both the Courts below failed to properly appreciate the said aspect.
Per contra, the learned counsel for the complainant/respondent contends that, insofar as the fixed deposit amount is concerned, the same stood in the name of the mother of the accused. After her death, the accused was informed to produce the necessary documents relating to the legal heirs so that the amount could be adjusted towards the outstanding loan. However, he failed to produce the requisite documents. Therefore, his request could not be considered, and the complainant-Bank suitably replied to the letter addressed by the accused. Despite the same, the accused failed to repay the outstanding loan amount. Hence, the complaint came to be filed. It is further contended that the Courts below have rightly appreciated the evidence on record and arrived at the correct conclusion. Therefore, the learned counsel submits that the revision petition is devoid of merit and is liable to be dismissed.
On perusal of the trial Court records, it is seen that the learned Magistrate has held that the accused admitted the issuance of the cheque and also admitted having availed the loan from the complainant-Bank. Though the accused took the defence that he had repaid the entire loan amount, he did not produce any document to establish such repayment. Insofar as the further defence of the accused that he had requested the Bank to adjust the outstanding loan amount from the fixed deposit of Rs.2,20,000/-, which had matured, is concerned, the learned Magistrate has held that the mere fact that the accused requested the Bank to adjust the fixed deposit amount towards the outstanding loan would not absolve him of his liability. Taking into consideration the statutory presumptions available in favour of the complainant under Sections 118 and 139 of the Negotiable Instruments Act, 1881, the learned Magistrate held that, once the accused admitted the issuance of the cheque and availing of the loan, the presumption would operate in favour of the complainant that the cheque was issued towards discharge of a legally enforceable debt or liability. Therefore, the burden was upon the accused to rebut the said presumption by placing necessary evidence on record. In the present case, both the Courts below have held that the accused failed to rebut the statutory presumption and, accordingly, held him guilty of the offence.
On perusal of the trial Court records, it is seen that, in order to substantiate its case, the complainant-Bank examined its Manager as PW1. He deposed in consonance with the averments made in the complaint and was subjected to cross-examination by the learned counsel for the accused. In the course of his cross-examination, PW1 admitted that the accused had replied to the legal notice issued by the complainant. Prior to filing the complaint, the complainant had issued the legal notice as per Ex.P3 dated 06.06.2018, calling upon the accused to pay the cheque amount of Rs.2,50,666/-.
The accused replied to the said legal notice, and the reply notice is marked as Ex.P6. In the said reply, the accused stated that he had requested the complainant-Bank to adjust the amount lying in the fixed deposit towards the outstanding loan amount. However, according to the accused, the complainant-Bank did not adjust the fixed deposit amount and, therefore, he contended that he was not liable to pay the cheque amount.
It is the contention of the complainant that, after receipt of the reply notice at Ex.P6, the complainant issued a rejoinder dated 30.06.2018, which is marked as Ex.P7. In the said rejoinder, the complainant contended that the accused was called upon to visit the Bank within seven days from the date of receipt of the notice and to close both the loan account and the fixed deposit account. However, according to the complainant, the accused failed to comply with the said request.
It is the contention of the complainant that, despite the complainant having issued the notice dated 30.06.2018, the accused did not visit the Bank and take steps to close the loan account by adjusting the fixed deposit amount. Therefore, the complainant contended that the accused cannot now contend that he has not committed the offence.
As against the evidence of the complainant, the accused examined himself as DW1. He contended that he had requested the complainant-Bank to adjust the outstanding loan amount against the fixed deposit amount. However, according to him, instead of adjusting the fixed deposit amount, the complainant-Bank filed the false complaint. The accused produced the fixed deposit bond, which is marked as Ex.D1. The fact that the fixed deposit had been made by the mother of the accused with the complainant-Bank is not disputed by the complainant. Further, the accused produced a letter dated 22.03.2017, marked as Ex.D2, wherein he requested the Bank to adjust the outstanding overdraft loan amount against the fixed deposit amount and to close both the accounts.
Further, the accused produced the survival certificate at Ex.D3 and the consent letter at Ex.D4 executed by his two sisters, wherein they stated that they had no objection to the fixed deposit amount being paid to the accused. The accused was also examined under Section 313 of the Cr.P.C., during which he stated his defence, and subsequently examined himself as DW1. Insofar as Ex.D2 is concerned, it is the contention of the complainant that the accused had not handed over the said letter to the Bank.
In his cross-examination, DW1 admitted that Ex.D2 does not bear the seal of the Bank evidencing its receipt. He denied the suggestion that he had not intimated the Bank about the death of his mother. It was further elicited in the cross-examination that DW1 had not produced Ex.D4, namely, the consent letter executed by his two sisters, before the Bank. The complainant-Bank also suggested to DW1 that Ex.D2 to D4 had been created for the purpose of the case, which suggestion was denied by him.
On going through the documents produced by the accused, it is revealed that the fixed deposit amount had been kept by his mother with the complainant-Bank and that she subsequently died. The accused produced the survival certificate at Ex.D3. It is also not in dispute that the accused is the son of the deceased and that he has two sisters. Both the sisters executed the consent letter at Ex.D4, stating that they had no objection to the fixed deposit amount lying with the complainant-Bank being paid to the accused.
It is the contention of the complainant-Bank that the accused never intimated the Bank about the death of his mother. Further, it is contended that the accused neither submitted the letter at Ex.D2 to the complainant-Bank nor produced the documents at Exs.D3 and D4 before the Bank. However, the accused contends that he had produced all the documents at Exs.D2 to D4 and had intimated the Bank about the death of his mother, but the complainant-Bank failed to adjust the outstanding loan amount against the fixed deposit amount. According to the accused, the overdraft loan carried interest at the rate of 18% per annum, whereas the fixed deposit carried interest only at the rate of 4% per annum. Therefore, the accused contends that, with a view to earning higher interest on the overdraft loan, the complainant-Bank deliberately failed to adjust the fixed deposit amount towards the outstanding loan amount. It is further contended that, though the accused had produced Exs.D2 to D4 before the Bank, the Bank has now denied having received the said documents.
On re-appreciation of the oral and documentary evidence placed on record by the accused, though the complainant-Bank contends that it had not received the documents relied upon by the accused and that the accused produced Exs.D2 to D4 only during the course of his evidence, nevertheless, the fact remains that the existence of the fixed deposit and the request made by the accused for adjustment of the said amount towards the outstanding loan have been brought on record. The complainant-Bank could have considered the request of the accused and, if permissible, adjusted the fixed deposit amount towards the outstanding loan and recovered any remaining balance from the accused. The said circumstance assumes significance while considering whether the accused has rebutted the statutory presumption available in favour of the complainant.
Without properly considering the defence evidence adduced by the accused, both the Courts below have committed an error in recording a finding of guilt. On re-appreciation of the evidence of DW1 and the documents marked as Exs.D2 to D4, this Court is of the opinion that the accused has raised a probable defence and has rebutted the statutory presumptions available in favour of the complainant under Sections 118 and 139 of the Negotiable Instruments Act, 1881. Once the accused has rebutted the said presumption by raising a probable defence on the basis of the material placed on record, the burden shifts upon the complainant to establish the existence of a legally enforceable debt or liability.
Both the Courts below have committed an error in rejecting the evidence of DW1 and the documents produced by him without properly appreciating their evidentiary value. The accused, by placing the relevant oral and documentary evidence on record, has rebutted the statutory presumption available in favour of the complainant. Therefore, the findings recorded by both the Courts below are not sustainable on proper appreciation of the evidence. The impugned judgments suffer from perversity and illegality and consequently call for interference by this Court in exercise of its revisional jurisdiction.
In view of the foregoing discussion, the revision petition succeeds. The impugned judgments passed by both the Courts below are liable to be set aside. At this stage, it is relevant to note that, during the course of arguments, the learned counsel for the petitioner/accused submitted that the amount deposited by the accused pursuant to the direction of this Court/appellate Court may be released in favour of the complainant, so as to be adjusted towards the outstanding loan amount, along with the fixed deposit amount which had matured.
Accordingly, the point for consideration is answered in the affirmative and this Court proceeds to pass the following:
ORDER
Criminal Revision Petition is allowed.
The impugned judgment and order of conviction dated 09.03.2023, passed by the learned Principal Civil Judge and JMFC, Jamkhandi, in C.C. No.989/2018, and the judgment dated 22.06.2023, passed by the learned I Additional District and Sessions Judge, Bagalkot, sitting at Jamkhandi, in Crl. Appeal No.5024/2023, are hereby set aside.
Consequently, the petitioner/accused is acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
His bail bonds and surety bond stand discharged.
Whatever the conditional deposited amount i.e, Rs.68,916/- by the accused before this court or before the trial court are to be released in favour of the complainant bank on proper identification.