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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF MARCH, 2018
BEFORE
THE HON’BLE MR.JUSTICE K.SOMASHEKAR
CRIMINAL APPEAL NO. 302 OF 2010
BETWEEN
K.N. RAJU,
S/O NANJAREDDY,
AGED ABOUT 51 YEARS,
RESIDING AT NO. 1462,
SOUTH END A CROSS,
JAYANAGAR 9TH BLOCK,
BENGALURU – 560 069.
... APPELLANT
(BY SRI. K.H. RAMESH, ADVOCATE (ABSENT))
AND
MANJUNATH T.V.,
S/O VEERANNA,
AGED ABOUT 51 YEARS,
NO. 48, BANGARAPPA LAYOUT,
SUBRAMANYAPURAM POST,
UTTARAHALLI HOBLI,
BENGALURU – 560 061.
... RESPONDENT
(BY SRI. K.G. SUDHAKAR, ADVOCATE)
THIS CRL.A. IS FILED UNDER SECTION 378(4)
CR.P.C PRAYING TO SET ASIDE THE JUDGMENT OF
ACQUITTAL DATED 17.12.2009 PASSED BY THE
LEARNED 16TH ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE BENGALURU IN C.C.NO. 23063/2008 –
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ACQUITTING THE RESPONDENT/ACCUSED FOR THE
OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.
ACT AND CONSEQUENTLY CONVICTING THE
RESPONDENT/ACCUSED.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 13.03.2018 COMING ON
FOR PRONOUNCEMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is directed against the judgment of
acquittal dated 17.12.2009 passed by the XVI Addl. Chief
Metropolitan Magistrate, Bangalore City in
C.C.No.23063/2008 acquitting the accused for the offence
punishable under Section 138 of the Negotiable
Instruments Act, 1881 (hereinafter referred to as ‘the NI
Act’, for brevity). The same is challenged in this appeal
urging various grounds.
2. Heard the arguments advanced by the learned
counsel for the respondent/accused in this appeal.
Learned counsel for the appellant has not advanced any
arguments and he was not present though the case was
called several times.
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3. The factual matrix of the appeal are as under:
The complainant is known to the accused as a family
friend. The accused is running a travel agency business in
Gandhinagar area and in the month of October 2004 the
accused has approached the complainant and requested
him to give hand loan of Rs.70,000/- to meet his domestic
problems and family commitments and also to invest some
amount in the business. The complainant on considering
the request of the accused, gave an amount of Rs.70,000/-
by way of cash to the accused on 29.10.2004. While
receiving the said loan amount, the accused has also
executed Loan agreement and he did give three cheques in
favour of the complainant. The accused also promised the
complainant that he would return the loan amount during
the month of April 2008. As per the request made by the
accused, the complainant presented the cheques for
encashment. But the cheques in question were
dishonoured with an endorsement Drawee signature
differs/incomplete and insufficient funds. Subsequently,
the complainant got issued a legal notice to the accused
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both under RPAD and under UCP. The notice sent to the
accused by RPAD returned with an postal acknowledgment
“No such person in the address”. But however, the notice
sent through UCP was served on the accused. Despite
receipt of legal notice, the accused neither replied nor paid
any amount towards the amount mentioned in the
aforesaid cheques in question. Hence, the complainant
filed the complaint before the court below alleging that the
accused has committed the offence punishable under
Section 138 of the NI Act and to prosecute the case against
the accused.
4. Upon initiation of proceedings, the Trial Court
took cognizance of the offence under Section 190 of Cr.P.C.
and summons was issued to the accused. On service of
summons the accused had put his appearance before the
Trial Court through his counsel and participated in the
proceedings. The copies of the prosecution papers were
furnished to the accused and plea was recorded. The
accusation was read over to the accused, to which he
pleaded not guilty and claimed to be tried.
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5. Subsequently, in order to substantiate his
contentions, the complainant examined himself as PW.1
and got marked 13 documents as per Ex.p1 to p13. Even
Ex.P2(a), p3(a) and p4(a) were marked. On the defense
part, the accused had examined himself as DW.1 and did
not produce any documentary evidence. The statement
under of the accused under Section 313 of Cr.P.C. was
recorded. Subsequently, the Trial Court, on hearing the
arguments advanced by the learned counsel for both the
parties, had framed the points that arose for its
consideration and answered point No.1 in the negative and
point No.2 as per the final order and thereby acquitted the
accused. It is this acquittal judgment which is called in
question in the present appeal.
6. Heard the learned counsel for the
respondent/accused.
7. Ex.P1 is the original complaint. Ex.P2 is the
cheque bearing No.644021 dated 28.5.2008 for a sum of
Rs.20,000/-. Ex.P3 is the cheque bearing No.644026
dated 28.5.2008 for a sum of Rs.20,000/-. Ex.P4 is
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cheque bearing No.644027 dated 28.5.2008 for a sum of
Rs.20,000/-. Ex.P2 to P4 are drawn on Sree
Subramanyeswara Co-operative Bank Ltd., Rajatha
Bhavana, Padmanabhanagar Branch, Bangalore.
Complainant states that Ex.P2(a), P3(a) and P4(a) are the
signature of the accused. ExP2 to P4 supports the stand
taken by the complainant. Ex.P5 to P7 are the
endorsements issued by the banker showing that the
aforesaid three cheques were dishonoured on 29.8.2008
with an endorsement “Drawers signature
differs/incomplete and insufficient funds.
8. It is relevant to note that as per the provisions of
NI Act, the complainant was required to make a demand
for repayment of the loan amount within 30 days from the
date of receipt of cheque as unpaid. Ex.P8 to P10 show
that complainant has made a demand in writing, calling
upon the accused to make repayment of the said loan
amount by issuing notice dated 26.9.2008 which was
within 30 days from the date of receipt of cheque as
unpaid. Learned counsel for the respondent/accused
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vehemently contended that complainant had to file this
complaint on or after 15.10.2008 and on or before
15.11.2008. But the complaint was filed on 30.10.2008
and of course, the complaint was well within time.
9. Ex.P12 is loan agreement. It contains the
information that the accused and his wife and his son have
jointly borrowed Rs.70,000/- from the complainant and
inturn the accused and his family members issued the
above referred cheques in favour of the complainant. But
the amount mentioned in the aforesaid cheques, in all,
comes to Rs.60,000/-. Therefore, the cumulative effect of
these facts is that on the date of issuance of the cheques in
question there was legally recoverable debt, in fact, in
existence. Admittedly, Ex.P12 was executed on 29.10.2004
and the cheques in question bear the dates as 28.5.2008.
Learned counsel for the respondent/accused pointed out
that as on the date mentioned in the cheque the amount
alleged to have been borrowed by the accused under
Ex.P12 had already become time barred debt and hence, it
cannot be said that as on the date the cheque bear, there
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was a legally enforceable debt was in existence and hence,
the complaint filed by the complainant needs to be
dismissed.
10. On perusal of Ex.P12 it could be noticed that
Ex.P12 stipulates 11 months for recovery of loan amounts.
Considering the 11 months time as well as the assurance
given by the accused in May 2008, the transaction was
legal and there existed a recoverable debt. Therefore, the
contention of the accused that the claim of the
complainant is the time barred debt cannot be accepted.
Hence, the Trial court observed that in Ex.P12 it is recited
or stipulated that 11 months time has been given to the
accused to pay the said amount.
11. Article 21 of the Indian Limitation Act, the
period of limitation for recovery of loan amount starts from
the date on which the amount has been paid. Further, as
per Section 18 of the Limitation Act, a fresh period of
limitation shall be computed if any acknowledgement of
debt has been executed by the borrower within the
prescribed period of limitation i.e., within three years from
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the date of borrowing of the loan. Further Section 19 of
the Limitation Act makes it clear that a fresh period of
limitation shall be computed from the date of payment of
some money towards the loan in question. Therefore, it is
relevant to extract Sections 18 and 19 of the Limitation Act
for the purpose of deciding the issues under Section 138 of
N.I. Act.
Section 18
18. Effect of acknowledgment in writing.—
(1) Where, before the expiration of the prescribed
period for a suit of application in respect of any
property or right, an acknowledgment of liability in
respect of such property or right has been made in
writing signed by the party against whom such
property or right is claimed, or by any person
through whom he derives his title or liability, a fresh
period of limitation shall be computed from the time
when the acknowledgment was so signed.
(2) Where the writing containing the
acknowledgment is undated, oral evidence may be
given of the time when it was signed; but subject to
the provisions of the Indian Evidence Act, 1872 (1 of
1872), oral evidence of its contents shall not be
received.
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Explanation.—For the purposes of this section,—
(a) an acknowledgment may be sufficient though it
omits to specify the exact nature of the property or
right, or avers that the time for payment, delivery,
performance or enjoyment has not yet come or is
accompanied by a refusal to pay, deliver, perform or
permit to enjoy, or is coupled with a claim to set-off,
or is addressed to a person other than a person
entitled to the property or right;
(b) the word “signed” means signed either
personally or by an agent duly authorised in this
behalf; and
(c) an application for the execution of a decree or
order shall not be deemed to be an application in
respect of any property or right.
Section 19
19. Effect of payment on account of debt or of
interest on legacy.—Where payment on account of a
debt or of interest on a legacy is made before the
expiration of the prescribed period by the person
liable to pay the debt or legacy or by his agent duly
authorised in this behalf, a fresh period of limitation
shall be computed from the time when the payment
was made:
Provided that, save in the case of payment of
interest made before the 1st day of January, 1928,
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an acknowledgment of the payment appears in the
handwriting of, or in a writing signed by, the person
making the payment.
" Explanation.—For the purposes of this
section,— "
(a) where mortgaged land is in the possession of the
mortgagee, the receipt of the rent or produce of such
land shall be deemed to be a payment;
(b) “debt” does not include money payable under a
decree or order of a court."
12. In the context of limitation point the Trial Court
observed in the impugned judgment that it is not the case
of the complainant that the accused has paid some
amount towards the repayment of the amount mentioned
in the cheques in question. In that view it was held that
the loan in question cannot be considered as a time barred
debt.
13. In so far as bouncing of cheques relating to
initiation of the proceedings as under Section 200 Cr.P.C.
punishable under Section 138 of NI Act that the limitation
point is to be taken into consideration and so also the
contention urged by the complainant. In the instant case,
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it should be noted that the complainant who examined
himself as PW.1 specifically and categorically has admitted
himself in his cross examination that the accused had
given the undated cheques, and the validity of the loan
agreement entered into between complainant and accused
had lapsed which was for a period of three years. The
complainant has categorically admitted that after the
expiry of the loan agreement, he had presented the
cheques mentioning the dates and upon bouncing of them
had initiated the proceedings against the accused under
Section 138 of NI Act. Therefore, on a careful reading of the
said admission of PW.1 it makes it clear that when the
cheques in question were issued by the accused the
cheques were undated. Further according to the complaint
himself the cheques in question have been issued to him
on the date of execution of the agreement as per Ex.P12.
Even this fact is mentioned in Ex.P12 which was executed
on 29.10.2004. Therefore, these facts make it clear that
the cheques in question have been presented for
encashment after three years ten months from the date of
issuance. Therefore, the question would be whether the
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facts and circumstances of this case fall within the ambit
of Section 138 of NI Act. The Trial Court in this regard
cited a decision reported in ILR 2007 Karnataka 1708
between Vishnudas Vs. Vijaya Mahantesh wherein this
Court has held as under:
“NI Act 1881 Section 138 – Offence under –
Acquittal – Appealed against the issue of cheque
without mentioning the date-Admission of Pw.1 in
the cross examination that there was no debt as on
the date of issue of cheque. On facts, held that on
the date of handing over the cheque, there was no
debt due to be paid by the respondent and wherefore
the cheque was not issued towards discharge of any
debt. The facts elicited in the cross examination of
Pw.1 that the cheque was undated on the date of its
issue and the same was presented for payment after
6 months from the date of issue. The order of
acquittal is justified.”
The ratio laid down in the said decision squarely
applies to the facts and circumstances of the present case
and so also the initiation of the proceedings for the offence
punishable under Section 138 of the NI Act against the
accused.
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14. Whereas in this appeal, though several
opportunities were provided to the appellant, he has not
come forward to address the arguments. Therefore having
regard to the facts and circumstances contained in this
appeal which is filed against the impugned judgment of
acquittal passed by the Trial Court in C.C.No.23063/2008
it is relevant to note the admission made by the Pw.1 in his
cross-examination who specifically and categorically
admits that when the cheques in question were issued by
the accused, the cheques were undated and he further
admits that the cheques in question have been issued to
him on the date of execution of the loan agreement as per
Ex.P12 i.e., on 29.10.2004. Further the cheques in
question have been presented for encashment on
29.8.2008. Therefore, these facts make it clear that
cheques in question have been presented for encashment
after three years ten months from the date of issuance of
the same. Therefore, the Trial Court has rightly held that
the materials made available on record are not sufficient to
conclude that the accused has committed the offence
punishable under Section 138 of the NI Act.
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15. The facts and circumstances of this case are
identical to the decision stated supra and it is squarely
applicable to the case on hand. In the aforesaid decision it
was held that when the cheque was undated on the date of
its issue and the same was presented for payment after 6
months from the date of issue then the Court had no other
option but to acquit the accused. Keeping in view that
position of law, the Trial Court rightly held that the
complainant himself had admitted that the cheques in
question were issued on 29.10.2004 and at the time of
issuance the cheques were undated and the complainant
had presented the said cheques for encashment in the year
2008. The said finding of the Trial court in the facts and
circumstances of this case is just and proper and there is
no need for this court to interfere with the said finding.
16. For the above reasons, I find that there is no
infirmity in the judgment of acquittal rendered by the Trial
Court. Hence, I am of the opinion that there is no
necessity to revisit the impugned judgment. As the appeal
is devoid of merits, the same is dismissed. As a
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consequence, the judgment of acquittal dated 17.12.2009
passed by the XVI Addl. Chief Metropolitan Magistrate,
Bangalore City in C.C.No.23063/2008 acquitting the
respondent/accused for the offence punishable under
Section 138 of N.I. Act, is hereby confirmed.
Sd/-
JUDGE
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