Ramdas S/O Khelu Naik vs Krishnanand S/O Vishnu Naik

2. This appeal by special leave arises out of Judgment dated 22 nd

August, 2012 passed by the High Court of Karnataka, Circuit Bench

at Dharwad, in Criminal Appeal No. 832 of 2007 whereby the High

Court set aside the Judgment and Order of the J.M.F.C. (II-Court),

Karwar acquitting the appellant herein of the offence punishable

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under Section 138 of the Negotiable Instruments Act, 1881 (for short

‘the Act’).

3. The facts leading to this appeal, in a nutshell, are that a

Cheque for Rs.5,00,000/- issued by the appellant in favour of the

respondent was dishonoured by the Bank when it was presented for

realization by the respondent, as the appellant had instructed the

Bank to stop the payment. After receiving such information from the

Bank, the respondent served a legal notice calling upon the appellant

to pay the Cheque amount. Upon failure of the respondent to obey

the legal notice warranting him to pay the Cheque amount of

Rs.5,00,000/-, the respondent filed Complaint Case against the

appellant for the offence punishable under Section 138 of the Act.

The Judicial Magistrate (First Class), Karwar took cognizance of the

offence, recorded statement of the complainant under oath,

registered the case and summoned the accused-appellant. The

appellant pleaded not guilty and claimed trial.

4. Before the Trial Court, the complainant-respondent solely led

his own evidence as P.W. 1., whereas the appellant-accused in his

defence led evidence of six witnesses. The case of the complainant

was that he had given a hand loan of Rs.1,50,000/- to the accused-

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appellant and three and half years thereafter he had again given

Rs.25,000/- as hand loan, thus in all, the accused-appellant owed him

Rs. 1,75,000/- and to discharge this liability the cheque for

Rs.5,00,000/- was drawn, but the same stood dishonoured at the

instructions of the accused-appellant. Whereas, the case of the

appellant before the Trial Court was that he had entered into an

agreement with the complainant to purchase 3 acres of land

belonging to the complainant for a total consideration of

Rs.10,00,000/- and for that purpose, an advance of Rs.30,000/- in

cash was paid and the Cheque in question for Rs.5,00,000/- was

handed over to the complainant in presence of B.S. Pai (DW 2).

When the complainant failed to execute the sale agreement and not

even willing to return the advance amount of Rs.30,000/- and the

Cheque of Rs.5,00,000/-, he had to instruct the Bank to stop payment

against the said Cheque.

5. The Trial Court, taking note of financial condition of the

complainant who was working under the accused, observed that the

complainant has failed to lead any evidence to corroborate his

version that the Cheque issued by the appellant was to discharge the

liability towards the complainant. Keeping in mind the corroborative

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and unshaken defence version, the Trial Court found fault with the

complainant-respondent and observed that instead of executing an

agreement to sell and instead of repaying the advance money and

returning the Cheque, a false complaint was filed by the complainant-

respondent against the accused-appellant. The Trial Court, therefore,

dismissed the complaint and acquitted the accused-appellant of the

offence.

6. Against the judgment of the Trial Court dismissing the

Complaint and acquitting the accused, the complainant preferred

Criminal Appeal before the High Court. The High Court while allowing

the appeal, set aside the judgment of the Trial Court and sentenced

the appellant-accused to pay a fine of Rs.8,50,000/- within a period of

eight weeks, failing which, to suffer simple imprisonment for a period

of six months. Aggrieved by the reversal of his acquittal, the

appellant-accused filed the present appeal.

7. Learned counsel for the appellant-accused contended that the

Cheque in question was in fact issued as part payment of the agreed

sale/purchase of 3 acres of land belonging to the complainant for a

total consideration of Rs.10,00,000/-, out of which an initial amount of

Rs.30,000/- was also paid by the appellant in cash and the

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complainant was supposed to execute a written sale agreement. As

the complainant had not come forward for giving finality to the

commitment by execution of written Sale Agreement and even denied

to return the advance payment of Rs.30,000/- and the Cheque in

question, the appellant had no option but to request his banker to not

honour the Cheque. The complainant mischievously cooked up the

story of giving hand loan to the appellant which the Trial Court had

rightly disbelieved and dismissed the complaint. Although the

complainant-respondent miserably failed to establish the fabricated

story of giving hand loan to the appellant with any reliable evidence,

the High Court took an erroneous view and wrongly set aside the

judgment of the Trial Court and sentenced the appellant under

Section 138 of the Act. Learned counsel, therefore, submitted that the

impugned order is not justified and the same deserves to be set

aside.

8. On the other hand, learned counsel for the respondent-

complainant submitted that there was no error in the impugned

judgment and the High Court has rightly allowed the appeal of the

complainant. The complainant had raised a sum of Rs.1,50,000/- by

obtaining loan from Akshya Bank to extend hand loan to the accused-

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appellant and 3½ years thereafter, a further sum of Rs.25,000/- was

also given and the Cheque for Rs.5,00,000/- was meant for the total

repayment of the advanced amount of Rs.1,75,000/-. He further

submitted that there was no transaction of sale/purchase of land

between the parties and the accused wanted to avoid repayment of

the hand loan, in the process of which he instructed the banker not to

pass the Cheque. The High Court has, therefore, correctly dealt with

the matter and rightly sentenced the accused who, knowing fully the

eventuality of the offence, committed the same deliberately. Hence

the learned counsel prayed that the appeal lacks merit and the same

deserves to be dismissed.

9. We have heard rival contentions of the learned counsel at

length. We find from the record that admittedly, the accused appellant

deals with sale and purchase of landed properties and the

respondent-complainant works as a Lorry Driver under him with a

salary of Rs.2,500/- p.m. and Rs.20/- per day towards miscellaneous

expenses (bhatta). Admittedly, the Cheque in question was for

Rs.5,00,000/- and all the way the stand of the complainant was that

he had given a hand loan of Rs.1,75,000/- to the accused-appellant.

We find no material on record in support of the claim of the

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complainant giving hand loan to the accused-appellant. There was

also no calculation of account or stipulation of any interest on the

alleged loan amount to show as to how the amount of Rs.5,00,000/-

was figured, in return of a hand loan of Rs.1,75,000/-, if at all taken by

the appellant from the complainant. It is also not on record whether

there was sufficient balance amount or not in the bank account of the

accused when the Cheque was dishonoured by the Bank. The

complainant himself stated in the cross-examination that after the

Cheque was returned without payment, he has not made any enquiry

with the Bank as to whether sufficient funds were available or not in

the account of the accused. In the absence of any authenticated and

supporting evidence, we cannot believe that the complainant-

respondent who is employed under the appellant-accused, has raised

an amount of Rs.1,75,000/- that too by obtaining loan of

Rs.1,50,000/- from a Bank, only to give hand loan to his employer. As

the complainant himself admitted that his net savings in a year comes

to about Rs. 10,000/-, it is not trustworthy that he was in a position to

extend hand loan of such big amount to the appellant.

10. Whereas, the evidence of Mr. B.S. Pai (D.W. 2) fully

corroborates the version of the appellant. He deposed that the talks

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of sale/purchase of 3 acres of land were held between the parties in

his presence. The appellant agreed to purchase 3 acres of land

belonging to the complainant and the appellant had paid an amount

of Rs.30,000/- as advance and handed over a Cheque for

Rs.5,00,000/- . It is also noteworthy that the complainant has not

rebutted the evidence of D.W. 2 in the cross examination. Further, the

firm and unshaken evidence of Mr. D.R. Bhat, a member of the

Karwar Bar Association (D.W. 6) also corroborates the sale purchase

deal between the parties. It is evident from the record that DW 6 has

clearly and categorically deposed that the appellant stated to him

about four years back that he had entered into an agreement with the

complainant in presence of B.S. Pai (DW 2) to purchase 3 acres of

land belonging to the complainant and also paid Rs.30,000/- in cash

as advance money and issued a Cheque for Rs.5,00,000/-. Looking

at the corroborative evidence adduced by the defence witnesses and

more particularly, in the absence of any material evidence in support

of the claim of the respondent-complainant, we cannot uphold the

impugned judgment.

11. For all the aforesaid reasons, the appeal deserves to be

allowed and is accordingly allowed. The impugned judgment of the

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High Court is set aside and the judgment of the Trial Court is

restored. The appellant is at liberty to withdraw the amount of

Rs.1,75,000/- with accrued interest if any, deposited by him before

the Trial Court in accordance with this Court’s order dated 30 th

November, 2012.

….……………………………….J. (RANJANA PRAKASH DESAI)

.....………………………………J. (N.V. RAMANA) NEW DELHI JULY 23, 2014

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